Basics
What is a mutual fund?
Pooled money from many investors used to buy stocks, bonds, or other investments.
What are money market funds?
Invests in short-term debt like treasury bills and corporate paper, low risk
What is a bond?
Giving money to a coorporation, company, governemnt etc with the goal of gaining your money back + interest.
Who is the fund manager?
: Professionally manages the fund’s portfolio and decides where to invest.
What are balanced funds?
Mix of stocks and bonds designed to balance risk and reward
What are capital gains or income?
Profit from selling fund units for more than you paid, also includes dividends and interest.
What is diversification?
Spreading your investment across multiple assets to reduce risk.
What are index funds?
Invests in one market index and cheaper to manage.
What is a concentration risk?
If the fund puts too much money into one type of investment and it does really bad, your fund can lose more money than expected