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How to Make Money in Stocks: A Winning System in Good Times and Bad, Fourth Edition, 4th Edition by William O'Neil

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CHAPTER 18How You Could Make Your Million Owning Mutual Funds

What Are Mutual Funds?

A mutual fund is a diversified portfolio of stocks managed by a professional investment company, usually for a small management fee. Investors purchase shares in the fund itself and make or lose money based on the combined profits and losses of the stocks within the fund.

When you purchase a mutual fund, what you’re buying is long-term professional management to make decisions for you in the stock market. You should probably handle a mutual fund differently from the way you handle individual stocks.

A stock may decline and never come back in price. That’s why you must always have a loss-cutting policy. In contrast, a well-selected, diversified domestic growth-stock ...

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