InvestNative Project | More stock market basics 1 of 6

Does investing sound complicated? Too much effort? Very risky? Have no fear, you’re not alone!

We know stocks can be very profitable if we purchase the right ones, and bonds are important too so that we balance our risk. But what if we don’t have the time or expertise to pick our own stocks, or enough funds to go out and buy bonds? There’s a great alternative specifically designed for people who want to invest in stocks and bonds without the hassles and commitment of making purchases themselves. It’s called a mutual fund.

A mutual fund is nothing more than a collection of stocks and/or bonds. When you buy shares of a mutual fund, you buy a percentage ownership in a portfolio of a fairly large number of these securities. You can think of a mutual fund as a company that brings together a group of people and invests their money in stocks, bonds, and other securities. Each investor owns shares in the mutual fund, which represent a portion of the holdings of the fund. That mutual fund is managed by professionals whose entire job is to make sure that the fund performs well.