Contact Us for customer service. Today, more than half of American families own mutual funds, and their increasing popularity as an investment vehicle is not a fad, but a solid trend based on several important advantages. As you probably know, a mutual fund is a corporation that sells its shares to investors, and uses the proceeds of those sales not to manufacture a product or provide a service, but to invest.
Mutual funds can invest in almost anything.
The idea is to gain from the price appreciation of growth stocks while also receiving the relatively stable income from bonds. This total planet strategy reduces the risk of getting hurt by special economic problems abroad, compared with an international fund that invests entirely overseas. But it also cuts into the gain that would have been realized when foreign economies grow. There is also the risk that foreign currencies may lose ground, relative to the dollar, which can eat into your profits or add to your losses. Managers of these funds invest in the shares of companies that offer potential for price appreciation, as well as those likely to pay good dividends.