The Pros and Cons of Stock Mutual Funds
Stock Mutual Funds Stock mutual funds are like a middleman between you and stocks(also known as equity mutual funds): they pool shareholder money and invest it in a number of different companies. You can buy several stocks in a single transaction through a mutual fund instead of picking and choosing individual stocks yourself to build a portfolio. It makes mutual funds perfect for investors who don't want to spend much time studying and handling an individual stock portfolio — a mutual fund works for you. A simple portfolio of investments may include as few as two mutual funds. ➢ Need guidance? But the key to the argument of the mutual fund is that there are several types of mutual funds: active fund managed by a professional manager; index funds tracking a benchmark index such as the Standard and Poor's 500; and ETFs, which are a category of index funds — they typically track an index, but are traded as stocks throughout the day. ➢ How do fees impact returns? Were bi...