IN THIS CHAPTER
Grasping the advantages of mutual funds and exchange-traded funds (ETFs)
Checking out the different types of funds
Choosing the best funds
Evaluating your fund’s performance
Monitoring and selling your funds
When you invest in a mutual fund or its close sibling, an exchange-traded fund (ETF) that trades on a stock exchange, an investment company pools your money with the money of many other like-minded individuals and invests it in stocks, bonds, and other securities. Think of it as a big investment club without the meetings! When you invest through a typical fund, several hundred million to billions of dollars are typically invested along with your money.
If you’re thinking of joining the club, read on to discover the benefits of investing in mutual funds and ETFs and the types of funds available (see Chapter 9 for a discussion of mutual-fund alternatives). In this chapter, I advise you on analyzing and choosing your funds, explain how ...