What is mutual fund actually?

I am very new in investing. Some says its good to invest in mutual fund. I need to know what is it? How does it work. How i get my invested money and the profit also from the mutual fund?

If you are from India, check out the link below.

Basically, they are a pooling of investors that would rather have someone else do their investing for them. They give their money to a mutual fund manager and the manager does the investing. For a fee, of course. There are all types of mutual funds. Ones that invest in growth stocks, ones that invest in bonds, ones that invest in undervalued stocks, ones that invest in foreign stocks, and relatively new, ones that invest in a market average. The last came about because mutual funds in general--70%--could not get a better return than the market in general.

That does not mean that all mutual funds are bad. But is does mean that you have to do your home work before buying one. You can get your money back by just giving them a phone call or sending a request over the internet. Some mutual funds are sold by stock brokers and the funds are held by the broker and you sell them by calling the broker. Every year at year end the mutual fund distributes the money that they realized on their investments. That has pluses and minuses. The plus is that you get the money. The minus is that you have to pay taxes on it. The index funds do not distribute so much because they do not sell their investments so often. So they are an advantage in that respect.

Initial minimum investment usually, $1,000.00 US dollars. It's like a stock portfolio. You can choose high, (could loose money here, or make some quicker), medium (could loose, could gain) and low (longer term investment, like retirement). I'm opening one up this next tax return. You can get them at a bank or an investment firm.

A mutual fund is a form of collective investment that pools money from many investors and invests the money in stocks, bonds, short-term money market instruments, and/or other securities. [1] In a mutual fund, the fund manager trades the fund's underlying securities, realizing capital gains or loss, and collects the dividend or interest income. The investment proceeds are then passed along to the individual investors. The value of a share of the mutual fund, known as the net asset value (NAV), is calculated daily based on the total value of the fund divided by the number of shares purchased by investors.

Legally known as an "open-end company", a mutual fund is one of three basic types of investment companies available in the United States. [2] Outside of the U.S., mutual fund is a generic term for various types of collective investment. In the UK and western Europe (including offshore jurisdictions) other forms of collective investment are prevalent including unit trusts, Open-Ended Investment Companies (OEICs), SICAVs and unitized insurance funds.

A huge portfolio of securities (stocks, bonds, options, etc) that is owned by a lot of people. The price is figured daily as the total value of the portfolio divided by the number Of shares outstanding. It is good for people, such as yourself who lack experience. One of the expenses deducted from the mutual fund is to pay a manager to make the buy and sell decisions for everyone. Speaking of expenses, Vanguard goes overboard in advertising that their funds are better because they keep the expenses extremely low. Look at what the returns on all funds have been. Vanguard's are mostly very low, just like their expenses. Try to find a no-load fund so you don't get robbed by stockbroker commissions. E-mail me personally for further advice. Been in the business of investing for 24 years.

A basket of various stocks or bonds

mutual funds are professionally managed where people's money is invested and investment decisions are taken by knowledgeble professionals.