Mutual Funds : What is this all about?

MF Lesson1: Mutual Funds : What is this all about?
As you probably know, mutual funds have become extremely popular in other country such a the US. What was once just another difficult to understand financial instrument is now a part of our daily lives. Less than 1 million people in Philippines, invest in mutual funds. But in the United States alone, trillions of dollars are invested in mutual funds by 80 Million investors.


In fact, to most people, investing means buying mutual funds. After all, it's common knowledge that investing in mutual funds is (or at least should be) better than simply letting your cash waste away in a savings account, but, for most people, that's where the understanding of funds ends. It doesn't help that mutual fund salespeople speak a strange language that is interspersed with jargon that many investors don't understand.

Originally, mutual funds were heralded as a way for the little guy to get a piece of the market. Instead of spending all your free time buried in the financial pages of the Philippine Stock Market Street Journal, all you had to do was buy a mutual fund and you'd be set on your way to financial freedom. As you might have guessed, it's not that easy. Mutual funds are an excellent idea in theory, but, in reality, they haven't always delivered. Not all mutual funds are created equal, and investing in mutuals isn't as easy as throwing your money at the first salesperson who solicits your business.

In this tutorial, we'll explain the basics of mutual funds and hopefully clear up some of the myths around them. You can then decide whether or not they are right for you.