Mutual funds: Think of them as professionally managed investment baskets, similar to ETFs but often actively managed (fund manager picks stocks/bonds). Mutual funds pool money from many investors to buy a diversified portfolio of assets – instant diversification and professional management in one fund.
Mutual funds are bought and sold directly through fund companies or brokerage accounts (unlike ETFs, not traded throughout the day). Different types of mutual funds – stock funds, bond funds, balanced funds, target-date funds (designed for retirement). Expense ratios (fees) are important – look for low-cost funds.
Mutual funds offer diversification and professional management, beginner-friendly for long-term investing. Mutual funds: Diversification, professional management, beginner-brilliant!