Mutual Fund Basics Tutorial
AAA
  1. Mutual Funds: Introduction
  2. Mutual Funds: What Are They?
  3. Mutual Funds: Different Types Of Funds
  4. Mutual Funds: The Costs
  5. Mutual Funds: Picking A Mutual Fund
  6. Mutual Funds: How To Read A Mutual Fund Table
  7. Mutual Funds: Evaluating Performance
  8. Mutual Funds: Conclusion

Mutual Funds: Introduction

As you probably know, mutual funds have become extremely popular over the last 20 years. What was once just another obscure financial instrument is now a part of our daily lives. More than 80 million people, or one half of the households in America, invest in mutual funds. That means that, in the United States alone, trillions of dollars are invested in mutual funds. (For more reading, see A Brief History Of The Mutual Fund.)

In fact, to many people, investing means buying mutual funds. After all, it's common knowledge that investing in mutual funds is (or at least should be) better than simply letting your cash waste away in a savings account, but, for most people, that's where the understanding of funds ends. It doesn't help that mutual fund salespeople speak a strange language that is interspersed with jargon that many investors don't understand.

Originally, mutual funds were heralded as a way for the little guy to get a piece of the market. Instead of spending all your free time buried in the financial pages of the Wall Street Journal, all you had to do was buy a mutual fund and you'd be set on your way to financial freedom. As you might have guessed, it's not that easy. Mutual funds are an excellent idea in theory, but, in reality, they haven't always delivered. Not all mutual funds are created equal, and investing in mutuals isn't as easy as throwing your money at the first salesperson who solicits your business. (Learn about the pros and cons in Mutual Funds Are Awesome - Except When They're Not.)

In this tutorial, we'll explain the basics of mutual funds and hopefully clear up some of the myths around them. You can then decide whether or not they are right for you.

Mutual Funds: What Are They?

  1. Mutual Funds: Introduction
  2. Mutual Funds: What Are They?
  3. Mutual Funds: Different Types Of Funds
  4. Mutual Funds: The Costs
  5. Mutual Funds: Picking A Mutual Fund
  6. Mutual Funds: How To Read A Mutual Fund Table
  7. Mutual Funds: Evaluating Performance
  8. Mutual Funds: Conclusion
RELATED TERMS
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  3. Series 6

    A securities license entitling the holder to register as a limited ...
  4. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth ...
  5. Return On Investment - ROI

    A performance measure used to evaluate the efficiency of an investment ...
  6. Systematic Manager

    A manager who adjusts a portfolio’s long and short-term positions ...
RELATED FAQS
  1. How are a mutual fund's C shares different from A and B shares?

    Class C shares are a type of mutual fund shares. Mutual fund shares are divided up into three classes: class A shares, class ... Read Full Answer >>
  2. Which mutual funds are most popular for getting exposure to the chemicals sector?

    Investors gravitate to the chemicals sector for many reasons. It is a longstanding sector in which companies bring to market ... Read Full Answer >>
  3. What is the difference between a no-load mutual fund and a fund that has no front ...

    Mutual fund companies provide investors a number of methods to acquire shares, including paying a front-end sales load, investing ... Read Full Answer >>
  4. What are some of the most common mutual funds that give exposure to the Internet ...

    Internet stocks are part of the broader technology sector. Because there is such a wide variety of Internet companies available ... Read Full Answer >>
  5. Can warrants be written on any security?

    Conceptually, warrants can be written on any type of security issue. The structure of a warrant only changes the timing of ... Read Full Answer >>
  6. How do you transfer common stock from one broker to another?

    Common stock shares are most commonly transferred from one broker to another by a system known as the Automated Customer ... Read Full Answer >>

You May Also Like

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!