Funds: The Feeling’s Mutual

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The best way to define a mutual fund is explaining what it does. Here’s the short version.

A mutual fund

  • Combines money you invest by buying shares with money from other investors
  • Invests that pool of cash in a portfolio of stocks, bonds, cash, or a combination, based on the type of fund it is
  • Distributes income and capital gains from the investments it owns, minus expenses, back to you and the other investors
  • Lets you automatically reinvest your distributions to buy more shares at the current market price