Stock question.?

Question

I know what a mutual fund is, but I'm not quite sure how it works. So how does it work? Thanks!

Answer 1

you can find it

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Answer 2

Simple. A bank/broker averages the performance of several stocks that are in the same category and turns it into its own stock. That is what you call a mutual fund.

Answer 3

A mutual fund is an entity that is registered with the Securities & Exchange Commission whose purpose is invest and trade securities for a group of people who will share in the dividends or income earned from interest and who, after management fees, will distribute all trading profits/losses and/or investment gains/losses to the company's holder.

So it's a company that pools investors’ monies for the purposes of buying and selling securities to make trading profits and/or collect dividends and interest in which the investors will share in.

For this service, the fund company will charge a fee and this fee will be deducted before they will distribute any monies to the holders

You can go to MSN Money, http://moneycentral.msn.com/home.asp  they have an entire section about mutual funds.  While you're there you should also familiarize yourself with ETF (exchange traded funds)

You could also check out http://www.brokerage101.com/ for general information and then visit Morningstar which is a firm that rates mutual funds http://www.morningstar.com/

I hope I've been of some help or at least have given you proper direction.   Study well and invest even better

Answer 4

it's a pool of cash that is used to buy various assets.

Answer 5

Basically, by investing your money to a mutual fund, your letting a fund manager manage your money hoping that your money will grow in the future. Mutual funds have risks and fees associated with them and not to mention, you can still loose your money even with the help of a professional fund manager. There are many different types of funds out there. Funds differ with the underlying asset they have and the way they manage their investments.

Answer 6

Lots of people all give their money to one mutual fund manager at the bank, he does all the research and is allegedly an expert (although mutual funds rarely outperform the market index).

He then takes this money from all his customers and invests them in the stocks that he thinks will do best, and manages them buying/selling as he sees fit, usually charging a fee for his services.

You're better off buying index funds over mutual funds if you have even the slightest idea about investing. Mutual funds are just for stupid/lazy people who can't manage it themselves.

Answer 7

It is kind of like a stock family. It is a bunch of stocks put together. You can find some mutal funds for as little as 1,000 but some cost 2,500 I know I am explaning what it is but I have more to say. There are more 5,000 to chose from!

This how a mutual fund works.

one or two people pick out a group of stocks or bonds to go into a mutual fund that has a specific investment goal. the goal of the fund might be to make a lot of money quickly, or it might be to invest money for a steady return--that means that you can be pretty sure that you can get your money back with interest. the group of stocks or bonds that go into the fund is called a portfolio. the 1 or 2 people who pick what stocks to buy and sell are called portfolio managers.

here are some mutual fund families that you can open an account with as little as $1,000, and dont charge commission.

dreyfus founders

evergreen

oakmark

schwab

there are other large mutual fund families that do not charge a commision, like american centry, janus, and vanguard, but you need $2,500 for these.

                             Hope that helped!!!