Mutual Fund

    The topic of today might not sound familiar for someone or even never heard of it: "Mutual Fund". Investment is not only buying the particular asset directly (e.g. stock), but also investing through the mutual fund.......The question is what is the different between invest by yourself and invest via mutual fund?.....The answer is that the mutual fund will have its own "strategy" or "specific investment policy". The advantage of mutual fund is it can invest in everything from bond to derivative depending on the investment policy. The mutual fund is a good idea for the people who have not had their own strategy to invest yet. For example, if you want to invest in financial stock, you don't need to look for all bank stocks and scrutinize each of them. You simply invest in the mutual fund that has invest only in financial stocks. The mutual fund's manager will analyze stocks and lay out the strategy for you. Moreover, a mutual fund is not necessarily specific to one asset. It can be mixed fund such as bond/stock fund. So, a mutual fund is very broad in terms of types, because it can invest in everything.

     Next, we will learn some features of mutual fund. The term "Mutual" means not only your money is in the fund, but many investors also pool their money into the fund. Sometimes, one mutual fund could have the value of the fund around several billion dollars, such as Total Return bond fund of PIMCO which is the largest bond fund.

Mutual Fund Investment Process

     Another purpose of mutual fund is "diversification". Normally, mutual fund would not invest in only one product. For instance, mutual fund that has policy investing in finance stock would not invest only in JP Morgan or Bank of America, but it would invest in certain amount of financial stocks.

     In sum, a mutual fund is one of the popular investment tools nowadays. Some people, might not know that their lives involve with mutual fund more or less. 401K, insurance, provident, pension funds-- all these names are related to mutual funds. Therefore, knowing about a mutual fund does more good than harm.

Knowledge corner:
 " When you buy mutual fund, it calls "unit" like 1 unit not 1 stock. "