Hello Everyone,

Yesterday, we talked about the different ways you can invest/save money on the stock market, and we touched a little bit on mutual funds.As I said, saving using this method is the best for a newbie in the stock market, and also for experienced traders who don’t have the time to follow-up on a daily basis the going on in the stock market. A mutual fund is where people pool they resources together to fulfill a certain common or shared goal or interest, the resources could be used to buy bonds, shares or a mixture of the two. A fund that deals exclusively with bonds is for people who are saving on a short-term basis, maybe 1 to 3 years, they probably don’t want to take risk because the resources may be the only source of income, for example, like a pension income (they are more comfortable with a stable income). On the other hand, a fund dealing exclusively with the stocks or equity is basically for members who are thinking more on the incredible return on their portfolio, and can therefore afford to take the risk, they will probably be thinking on a long-term basis, their horizon is on the side of 6 years and beyond. The third type of fund is basically a mixture of the above two funds, and is for those investors who are risk neutral and they are more of medium term investors, maybe between 3 to 5 years. That is basically a brief introduction on mutual funds, tomorrow we’ll look at the advantages and disadvantages of mutual funds.