Mutual funds are groups of stocks and bonds that a company organizes and sells to multiple investors. The company enjoys an increased return rate, and its investors are given a relatively easy way to make money. When you purchase your mutual fund, the company who you bought it from will manage it for you. Investors choose a type of prospectus and will leave the research and selection up to an investment professional. Owning shares in a mutual fund allows investors to spread various amounts of risk through different stocks and bonds.
Professional investors oversee all of the bookkeeping and tax records.
Mutual funds can also be purchased with a fairly small amount of money, and all gains and dividends can be automatically reinvested. Any money that is accrued from a mutual fund, whether it is extracted or reinvested, is taxable. An aggressive portfolio will consist mostly of stocks that have potentially high yields, but are considered riskier investments. These are not suggested for people who can t afford to lose money. This portfolio provides investors with a mix of aggressive and conservative stocks and bonds.