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Mutual Funds

Mutual Funds. Aim: Why do people invest in mutual funds? Do Now: What are some of the major problems/risks that come with investing in the stock market?. Mutual Funds. A mutual fund is a collection of securities chosen and managed by a group of professional fund managers.

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Mutual Funds

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  1. Mutual Funds • Aim: Why do people invest in mutual funds? • Do Now: What are some of the major problems/risks that come with investing in the stock market?

  2. Mutual Funds • A mutual fund is a collection of securities chosen and managed by a group of professional fund managers. • Shares in a mutual fund can be bought or sold much like shares of stock

  3. Mutual Funds • A person can invest in either stock or bond mutual funds • They are very popular with Americans that lack the time or interest to research which stocks or bonds to buy on their own.

  4. Mutual Funds • Mutual funds/great for diversification • Diversification means investing in a wide variety of financial assets • By investing in a large group of stocks or bonds, you reduce the risk of what?

  5. Mutual Funds – Types • Stock or equity funds – Emphasize growth and income from rising stock prices and dividends • Investing in common stock – You get paid a __

  6. Mutual Funds - Types • Bond funds – Offer income at a lower risk than stock funds • Can invest in corporate, treasury, municipal bonds

  7. Mutual Funds - Types • Money market mutual funds – Perform much like bank savings accounts. Not backed by FDIC • Fixed income securities – Short time to maturity and low risk

  8. Mutual Funds • How can you tell how it is performing? • Hint: What can you measure it against

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