Additionally, mutual fund companies, and other so-called asset management firms, form funds, which consist of a variety of securities. The asset management company buys and sells the securities in a fund, seeking to maximize its value, and it sells shares in these funds to investors directly and through securities brokers. The mutual fund company charges a fee for picking the securities in a fund. In turn, the shareholder is shielded from the risk of investing in individual securities. Principally because the way your parents invested is not how most people do it these days.
More people invest in securities today than ever before, and they have more choices.
There is an unimaginably large amount of money chasing investments these days, which is part of the reason that the stock market has risen so steeply during the '90s. Of course, some of that money is invested in enterprises that will not succeed, but most of it is funding what many observers believe is a new, post-industrial world economy, in which manufacturing is performed everywhere, not just in the western countries, and businesses depend on information as much as on energy. Though we divide the industry up into brokerages and mutual funds, within the two segments there are significant differences among the players. You'll want to make sure you not only know which segment you're interested in, but also how the particular company with which you're interviewing is distinguished from the competition. Brokerage A broker acts as the intermediary between the buyer and seller in a securities transaction.