A mutual fund is an investment company that pools money from many people and invests it in stocks, bonds, or other securities. Each investor owns shares; each share represents a tiny portion of each individual security held by the fund. An investment professional handles the purchase and sale of individual securities in the fund based either on an index or on his or her professional expertise. Investors may buy shares (or portions) directly from the fund or through brokers, banks, or financial planning or insurance professionals.
For more information regarding mutual funds, please read the following article on Mutual Funds.
Mutual funds are popular investments because they offer a cost-effective and efficient way to diversify your investments (or own a variety of securities — stocks, bonds, etc.) without having to make a large initial investment.
When you purchase shares of a mutual fund, you’re pooling your money with other investors and letting the mutual fund (which is simply a professional money management company) invest and manage the money to help meet the fund’s specified investment goal (e.g., growth, income, or a combination of the two).
Investing in Mutual Funds
Because they are professionally managed and offer diversification with generally a small initial investment, mutual funds can be suitable for most investors.
What is an Annuity?
An annuity is a contract between you (the purchaser or owner) and the issuer (usually an insurance company). In its simplest form, you pay money to the annuity issuer, the issuer invests the money for you, and then the issuer pays out the principal and earnings back to you or to a named beneficiary.
Your Financial Advisor has the tools to help you choose the right fund or basket of funds to meet your unique goals. Work closely with your Financial Advisor to develop a mutual fund portfolio that’s suitable for your specific situation.
You should carefully consider the investment objectives, risks, charges, and expenses of a mutual fund company before investing in one or more of its mutual funds.