What is a mutual fund?
Put simply, a mutual fund is a pool of money provided by individual investors, companies,
and other organizations. A fund manager is hired to invest the cash the investors
have contributed. The goal of the manager depends on the type of fund; a fixed-income
fund manager, for example, would strive to provide the highest yield at the lowest
risk. A long-term growth manager, on the other hand, should attempt to beat the
Dow Jones Industrial Average or the S&P 500 in a fiscal year (very few funds actually
achieve this; to find out why, read Index Funds - The Dumb Money Almost Always Wins).
Mutual funds are divided along four lines: closed-end and open-ended funds; the
latter is subdivided into load and no load