Mutual Funds

Mutual Funds

Mutual Fund Information — Learn & Invest!

What is a mutual fund?

A mutual fund is an investment program funded by shareholders that trades in diversified holdings and is professionally managed.

The easiest way to understand economies of scale is by thinking about volume discounts; in many stores, the more of one product you buy, the cheaper that product becomes. This also occurs in the purchase and sale of securities. If you buy only one security at a time, the transaction fees will be relatively large.

Divisibility

Many investors do not have the exact sums of money to buy round lots of securities. One to two hundred dollars is usually not enough to buy a round lot of a stock, especially after deducting commissions. Investors can purchase mutual funds in smaller denominations.

Liquidity

Another advantage of mutual funds is the ability to get in and out with relative ease. In general, you are able to sell your mutual funds in a short period of time without there being much difference between the sale price and the most current market value.

Tips on considering mutual funds
– Know your risk
– Examine asset allocation
– Review types of mutual funds
– Build your portfolio
– Research mutual fund taxation
– Learn to diversify



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