Description

Mutual funds are the investment equivalent of a frozen dinner. Rather than go through the hassle of walking the supermarket aisles, picking out individual ingredients, packing them all home and then cooking a meal, you can buy a frozen dinner and get everything you want in one convenient package. Mutual funds are vehicles for individuals to invest their money in the stock or bond market. They are ideal for the individual investor with limited funds, as they can gain access to diversification benefits even though they may have a modest amount to invest. Just how it is expensive and inconvenient to buy all the ingredients separately for a full meal, convenience and cost savings are why both frozen dinners and mutual funds exist. Investors don’t have to make decisions about which individual stock to buy, they simply decide what portfolio suits them best.