Mutual funds 101

Welcome to the world of mutual funds! Let us give you a run-through on everything you need to know about mutual funds and how it differs from other investment portfolios.

What is A Mutual Fund?

A mutual fund is a pool of money invested by many investors into one or more investments. Mutual funds are managed and operated by a professional investment company (the fund manager). Investors can then invest small or large amounts of money into the mutual fund, which is then invested according to the fund’s prospectus.

Mutual funds may be managed passively, meaning that they simply track an index, or actively; meaning that they select stocks based on criteria such as growth potential or market capitalisation.

Investing in mutual funds doesn’t mean sacrificing profits or putting yourself at risk of losing money; it just means diversifying across multiple assets so that if one company or sector suffers, other assets will help offset those losses while providing additional opportunities for growth.

Why Invest in a Mutual Fund?

Unlike buying individual stocks, mutual funds allow you to invest in more than one company at once which creates room for a more diversified portfolio. This means that whatever happens with one stock or another, your money is safe. You can also make it easy on yourself by setting up automatic payments from your bank account into the fund—you won’t have to worry about selling or rebalancing on a regular basis because these things happen automatically!

They are easy to understand; they are easy to buy; they are easy to sell; they can be set up so that there is no need for you to ever touch them again after initial setup; and best of all? They require very little maintenance beyond this initial setup phase!

How Do I Invest in a Mutual Fund?

Mutual funds are as easy to invest in as single stocks.

To invest in a mutual fund, you can either go through a broker, robot advisor, invest through a retirement account (like an RSA), or directly from your bank account.

How Do I Choose a Mutual Fund to Invest In?

A good place to start is by understanding the fund’s investment objective. Some funds focus on growth, some focus on income generation and others try to maintain your capital over time—these are all different strategies with different risks and rewards. The best way to identify which approach is best suited for your needs is by taking a look at past performance; if the investments in question have performed well during similar economic conditions, then they’re probably worth considering further.

In conclusion, if you’re looking for a way to build your savings, then investing in mutual funds is the way to go. If you want more information on how to get started with investing, START HERE

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