When you invest in mutual funds, you hire professional managers
to manage your money. Of course, these money managers charge a fee
for their services.
The advantage of investing in mutual funds is
diversification, which means that you don't put all of your eggs
into one basket. For example, with a small amount of money, you can
buy shares of stocks in only one company. If you invest in mutual
funds, you will own shares of hundreds of stocks or bonds in many
companies because mutual funds pool money from lots of investors
and purchase many different types of investments.
You will learn to compute share prices and the return on mutual
funds. Later on you can apply this knowledge to invest wisely in
mutual funds and to save for college education expenses using the
college fund calculator.
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