How To Guide For: Understanding Mutual Funds -- How Do They Work

A Mutual Fund is a collection of investments, such as stocks, bonds and other funds owned by a group of investors and managed by a professional money manager. The investment objective of the mutual fund determines what types of securities it buys. A Mutual Fund can focus on specific types of investments. People who buy shares of a mutual fund are its owners or shareholders. Their investments provide the money for a Mutual Fund to buy securities such as stocks and bonds. You can make money on a Mutual Fund if you sell your mutual fund for more than you paid for it then you will have a capital gain or if you sell your Mutual Fund for less than you paid for it then you will have a capital loss. To get more in depth information on Mutual Funds and how they work -- click the pictures below to read the articles.