Monday 8 June 2015

What is a Mutual Fund?

It is a type of investment wherein you join other investors and corporations to form a massive fund which will be handled by an expert/professional who is called fund manager for diversified portfolios of stocks, bonds, securities, money markets and other mutual funds.

Things are mutual just like a budding love and relationship. Are you familiar with MU (a.k.a. Mutual Understanding?) After you get to know each other and fell in love with MF, you still need to get to know MF and trust MF. Since you have a mutual bond, when the fund incurred loss, you incur loss too and when it incurred profit, you incur profit. Either way, you still invest.

Mutual Fund is like riding a bike with your lover. He/She drives and you just hug him/her as you journey along… You are going somewhere and obviously you just let him/her drive till you both reached the destination. Like a Mutual Fund, you let the Fund Manager drive his way and execute strategies to make your fund grow and maximize earning potential until you reap profit on your target period.

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