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What is a mutual fund and what is a share?are both one and the same?


can anybody tell the difference between the two?i dont understand the jargon of share market.please try to explain in simple language.

Thanks in advance.

A share is a single unit of stock. Owning one share is like owning one very small peice of a company. A mutual fund is a collections of many shares picked by a group of people who are basicly saying, we know what are the best shares to invest in. You give them your money and they give you a little of each share that they own. For example, if a mutual fund is made up of 10 diffrent company's shares, then by owning a part the fund you are owning a percentage of each one of the ten shares.

Shares are shares of a company (also known as stocks, as in buying stock in a company.)

Mutual funds are just ways to buy shares/stock without doing a ton of background investigation. Mutual fund managers spend all their time watching the stocks and we like to think they will know better than we will which stocks should be purchased.

Think of it like... crayons. Each company has a slightly different color crayon you can buy. And each color is worth a different amount; the prices vary not only day to day, but hour to hour. Do you know which crayon(s) to buy?

Then you might want to buy a mutual fund -- they'll put together a nice blend of them for you and the fund manager will keep watch over them.

A Mutual Fund Manager buys many stocks using Investors money. This is called a Mutual Fund because he is taking all the money that Investors sent him and he is buying many stocks. An Investor buys one or more shares to participate, or invest in this Fund. So even if you buy one share, you still own all the stocks in the Fund.

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