Glossary

A mutual fund is a type of investment vehicle that pools money from multiple investors to buy a diversified portfolio of stocks, bonds, or other securities. 🎯

Each investor in the fund owns shares, which represent a portion of the fund's holdings. Mutual funds are managed by professional portfolio managers, who aim to achieve the fund's investment objectives.

For example, an S&P 500 Index mutual fund would invest in the 500 largest US companies, aiming to match the performance of the S&P 500 Index.

Fun fact: Mutual funds have been around since the 18th century, but they didn't gain widespread popularity until the 20th century. 🕰️ Today, they're a common investment option for millions of people, offering an easy way to achieve diversification and professional management at a relatively low cost.