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Stocks are pieces of a company.
For many people, mutual funds are the best way to invest. The ultimate example of diversification, a mutual fund is a pool of investments that is owned by many people and managed by professional portfolio managers. Investors own part of these pools, also known as investment funds, by buying shares or units of the fund. The money from the purchase of units is invested by professional fund managers in a variety of assets with the expectation of increasing the value of the fund. At any point, the investor can redeem his or her units for their portion of the asset pool.