Mutual Funds

The idea that there is strength in numbers is the heart of a mutual fund. In fact, a single fund can include shares of hundreds of different stocks, bonds or cash equivalent investments.

A mutual fund is a pool of money invested for you by an investment firm. Each mutual fund is different in its make-up and philosophy. As an investor, you should look for funds with objectives and risk levels that match yours.

Define your goals, work back

What type of fund you choose; higher risk with the potential for higher returns or a more conservative path that's designed to help you keep up with inflation, depends on your goals.

Once you make your investment, a professional money manager is responsible for making sure the fund stays true to its objective, however a fund’s objective may change over time, with no guarantee that the objectives will be achieved.

Remember, most mutual funds require a minimum initial investment and you will be charged fees.

Explore fund specifics

Always start by reading the fund’s prospectus. That’s a document with crucial information about the fund like:

• Investment objectives or goals
• Strategies
• Risks
• Fees
• Expenses
• The fund’s performance history.

You can also get third-party information about the mutual fund through an independent fund rating service. Check online or at your local library. Request a prospectus from your investment professional and read it carefully before you invest.

Have more questions about mutual funds? Contact an investment professional today.

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