Mutual Funds and ETFs

Researching bonds and stocks can be fun if you’re confident about what you’re doing. But if you’re new to investing, making these choices can be intimidating. Mutual funds and exchange-traded funds (ETFs) make your task a lot easier.

Funds are pooled investments. They combine the money they raise from selling shares to investors to buy portfolios of stocks (if they’re stock funds), bonds (if they’re bond funds), or sometimes a combination of stocks and bonds. Professional managers choose the investments, decide when to buy, and when to sell.

Each fund has an investment objective, which may be something broad, like growth or income, or something specific, like tracking a particular index. With some research, you can find funds with objectives that fit your investment goals.

Index mutual funds and ETFs may be a particularly good choice because they aren’t expensive to buy, and you can get started with just a small minimum investment.

 

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