Let's recap what we've learned in this mutual fund tutorial:
- A mutual fund brings together a large group of people and invests their aggregated money in stocks, bonds, and other securities.
- The advantages of mutual funds are professional management, diversification, economies of scale, and wide range of offerings.
- The disadvantages of mutuals are high costs, over-diversification, possible tax consequences, liquidity concerns, and the inability of management to guarantee a superior return.
- There are many, many types of mutual funds. You can classify funds based on asset class, investing strategy, region, etc.
- Mutual funds have expenses that can be broken down generally into ongoing fees (represented by the expense ratio) and transaction fees (loads).
- Some funds carry no broker fee, known as no-load mutual funds.
- One of the biggest problems with mutual funds are their costs and fees.
- Mutual funds are easy to buy and sell. You can either buy them directly from the fund company or through a third party.
- Comparing fund returns across a number of metrics is important, such as over time, compared to its benchmark, and compared to other funds in its peer group.
Financial AdvisorLearn how mutual funds work, why they are so popular and how younger investors can get started by putting mutual funds in their IRAs or 401(k)s.
InvestingLearn how to get diversification, liquidity and professional management at an affordable price.
InvestingMutual funds are a great way to build wealth but not all of them are the same. Investors have to be mindful of fees, turnover, redundancy and performance.
InvestingMutual funds are a good investment opportunity, but investors should know how they operate.
InvestingWe list some options other than mutual funds for your retirement plan.
InvestingThis investment is very popular, but that doesn't mean it comes without risk.
Financial AdvisorMore than 80 million people, or half of the households in America, invest in mutual funds. No matter what type of investor you are, there is bound to be a mutual fund that fits your style.
Financial AdvisorWhat to really look for when you're deciding on a mutual fund.