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What are Mutual Funds?

A mutual fund is an investment vehicle

A mutual fund is an investment vehicle. What does this mean? It means when you invest in one, your money is pooled together with people that have similar investment objectives (such as, growing income). It is then invested by professional portfolio managers into securities such as stocks, bonds, etc.

This is great because by investing in them you save the time and energy required to build a diversified investment portfolio. And a diversified portfolio is what most aim for. Because it helps you avoid the risk of concentrating all your money in one type of investment.

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