What is a Mutual Fund?
A Mutual Fund is a collection of securities that include, but are not limited to, stocks and bonds. A Mutual Fund is a business entity that brings people and their money together for investing in securities. You can make money by
a) dividends paid from stocks, b) interest from bonds and, c)from capital gains (when securities increase in value and are sold.) Mutual funds are usually a less risky investment than individual stocks, especially for new investors coming into the market. A Mutual Fund has what is called a Fund Manager, or in some cases a group of fund managers, whose job is to manage the fund so that it is profitable. For a new investor, a mutual fund is a good way to get started, because it offers access to a professional fund manager without being required to pay large sums of money for their advice. 

A mutual fund can also offer you diversification.  For example, if you own individual stock and the price plummets for some reason, you will suffer a loss or deficit. However, if you own a mutual fund which owns that stock and shares of other stocks, you may not feel as much of the loss, because your investment is spread out over several stocks. Mutual funds also offer liquidity; which allows you to quickly convert your fund shares into cash.

Owning a mutual fund can be an excellent way to invest. With any investment there are risks, so make sure that you understand your risks before making an investment decision.

Happy Investing!