FirstStepsInvesting

Decoder · Kinds of investments

Mutual fund

A pool of money from many people, run by a company, that buys a collection of stocks, bonds, or both. You buy in at the day's closing price. Some mutual funds copy an index; others pay managers to choose. The yearly cost and the list it follows are printed facts you can read before you put a dollar in.

For your first $100: When your first $100 lands in a retirement account, a mutual fund is often the form it takes. Read two printed facts first: what it holds, and its expense ratio.

Stock, in plain wordsShare, in plain wordsBond, in plain words

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See this word inside your order