When your investments in your portfolio are properly diversified, you improve your chances for achieving long-term growth. A mutual fund is an investment that pools your money with the money of many other people who have similar investment goals. Professional money managers use the pool of money to buy securities, that, in the team's judgment, will help achieve specified financial objectives. Mutual funds may be an appropriate retirement investment choice because they offer professional management and diversification. Mutual funds are not FDIC insured and the value of your mutual fund may fluctuate with market conditions.
Mutual funds represent a quick, efficient, and cost-effective means of managing money.
They provide professional management, ongoing supervision of your holdings, and automatic diversification, all important elements of a well-rounded investment program. Because shares can be redeemed on any business day, mutual funds provide liquidity, and because shares of a mutual fund are priced daily, you always know what your investment is worth. Investment return and principal value will vary with market conditions and an investor's shares, when redeemed, may be worth more or less than their original purchase price. If you have not already started your investment program, the sooner you start, the better. This is surely among the most frequently asked question about mutual funds, especially by novice investors.