Finance is Fun: September 11, 2012

Updated 12 months ago

Individuals are responsible for most of our own savings. Through 401ks and the like we have to manage the world of investing and that can be very difficult when you don’t have much time to teach yourself finance.  What is a mutual fund?A mutual fund is an professionally-managed investment that pools the money of many investors. The money is invested according to the plan noted in an accompanying prospectus and can be invested broadly or in a narrow sector.For instance, some mutual funds hold stocks of large companies, perhaps those in the U.S.as well as government bonds from perhaps the U.S and maybe other nations. These types of funds may be called equity and income funds or balanced funds. If the mutual fund invests internationally in companies in certain continents or throughout the world, including the U.S., and also invest in bonds of several countries it may be called a global fund.Mutual funds may also be much more narrow in their scope. The investments may be entirely in technology companies, manufacturers of computers, software, equipment, networking.  The mutual fund may be only and entirely in bonds, debt instruments. A fund may be all corporate bonds, from large or small companies borrowing money for expansion. The fund might be invested in municipal or government bonds. It may be invested in only one state’s bonds, such as California or New York. The mutual fund may also be a mix of bonds, corporate for instance, with varying degrees of risk, as higher risk may pay a higher rate of interest for the investors. Imagine lending money  young Bill Gates, college drop-out, money as he tinkered in his garage? You should examine the prospectus to study where the managers will invest the money. It will read like this: The fund will invest no more than 35% in U.S. companies specializing in something. And will also invest in government bonds in wherever.A mutual fund is a pool of investments. Your $100 buys a little bit of everything in the pool. You may own shares 30 or 500 companies. You can find out more buy reading the perspectus.Disclosure:Only securities and advisory services offered through Wall Street Financial Group, Inc. Registered Investment Advisor. Member FINRA/SIPC. Wall Street Financial Group, Inc. and Norumbega Financial are separate entities, independently owned and operated. CR8485


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