How Do Mutual Funds Work?

Series Summary

Personal finance is the application of financial principles to the monetary decisions of an individual or family unit. It addresses the ways in which individuals or families obtain, budget, save and spend monetary resources over time, while taking various financial risks and future life events into account. Components of personal finance might include checking and savings accounts, credit cards and consumer loans, investments in the stock market, retirement plans, social security benefits, insurance policies and income tax management. In this free video series, a registered financial consultant provides information for people interested in basic investment advice. Find out how mutual funds work, how to invest money in the bank and how to manage a high yield investment account. Learn about swing trading, buying cheap stocks and organizing an investment account. Gain a better understanding of investments and the stock market with information in these free videos.

Video Transcript

"This is financial adviser, Patrick Munro, talking about How Do Mutual Funds Work? Mutual funds are a type of investing that an individual can go to a fund or fund family, deposit dollars, and receive, really, a share or ownership position in the value of that mutual fund. Many mutual funds have a strategy to invest in a certain part of the market place. Maybe a gold mutual fund. Maybe an energy or oil-based mutual fund. The always available, that mutual funds do charge for the management of the money. And, so, a mutual fund always has to have a fee. Be aware that those fees are coming right out of the return, so you have to look at the track record of these mutual funds, and the best place to do that is online at morningstar.com. Morning Star is one of the preeminent benchmarks to find out how mutual funds have been performing against their averages over a longer period of time. This is Patrick Munro talking about how mutual funds work."