Mutual Fund Basics?

What exactly is a Mutual fund? I know that you invest in them like stocks. What are some good Mutual Funds that i could invest in???

I would do some research before investing in mutual funds. People like to automatically tell you to invest in them like they are the best option.

About 75% of them under perform the stock market. All of them have management fees, usually between 1% and 2%, and some have sales loads.

Vanguard U.S. Growth.

A mutual fund is where people pool their money together and it is ran by a fund "manager". It is used to create instant diversification or centered on a specific industry for people without enough cash to diversify themselves.

dodge & cox stock fund

Investors invest their money into a fund called a mutual fund. The fund manager (who is much smarter than you and I) picks the investments according to the funds objectives. It is usually invested stocks, bonds, and cash. There are management fees associated with it but that is what you pay for professional management. Don't just look at 1 fund. Diversify into a few funds that have different objectives. That way you have some US companies, some international companies, some big companies, some mid sized companies, some small companies, some companies that pay dividends, some that don't, etc. See a financial planner who can help you allocate your investments appropriately. My favorite mutual fund companies are American Funds and Hartford. There a alot of fine mutual fund companies out there. These just happen to be the 2 I use. Go see a professional.

A Mutual Fund is a managed collection of investment paths (i.e. Stocks, Bonds, etc) which you invest in (usually long-term).

If you are interested in investing in companies which are "socially responsible" (i.e. environmentally friendly), then I would suggest investing in a "Socially Responsible Investment Fund" (i.e. Winslow Green Growth Fund, Neuberger & Berman Socially Responsible Fund). If you are not concerned with what your investments are supporting, then any fund is fine. I have had good experience with Vanguard.

When browsing through various fund options, I would suggest finding:

1) Best consistent % yield (1 yr, 2 yr, 5 yr, 10 yr...)

2) Highest Morningstar Ratings (5 star rating)

3) Lowest "expense ratio" (around 0.5% or less is great, 1.0% or less is OK)

4) Funds without loads ("no load funds")

5) Where the price is now in the overall picture. Buy when the share price for a particular fund is relatively low.

Good luck!!!