What Is a Mutual Fund?

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If you're new to investing, don’t be too surprised if more experienced investors advise you to stick to mutual funds until you get a solid idea of how the stock market works. They’re onto something — mutual funds can be great for beginning investors who don’t want to risk it all on a single stock or spend hours each day researching and selecting companies.

That’s reassuring, of course. But before you dive into this type of investment, it’s important to learn all the basics, including what mutual funds are, how they work and how to know if they’re right for you based on your investment goals. We'll delve into each of these topics to help give you an idea of whether mutual fund investment is a strategy you want to pursue.