An investment that re-distributes your contribution of monetary funds into a variety of stocks, bonds, money market accounts, or other types of investments, allowing you to diversify your money and cut down on risk. If you do not want to spend a great deal of time learning how to invest, a mutual fund is a way for you to leave the investing to professional investment managers in exchange for fees.
Most mutual funds are open-ended in nature, meaning there is an unlimited amount of shares of that fund that can be sold to investors. An open-ended mutual fund's share price is calculated by determining its net asset value (NAV). Stock prices are determined in part based on the laws of supply and demand, but with an open-ended mutual fund there is no limit to the supply of shares that can be sold. Therefore, prices of open-ended mutual funds are not influenced by buyers and sellers.
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