1. Mutual Funds Aim: Why do people invest in mutual funds? Do Now: What are some of the major problems/risks that come with investing in the stock market?

2. Mutual Funds A mutual fund is a collection of securities chosen and managed by a group of professional fund managers. Shares in a mutual fund can be bought or sold much like shares of stock

3. Mutual Funds A person can invest in either stock or bond mutual funds They are very popular with Americans that lack the time or interest to research which stocks or bonds to buy on their own.

4. Mutual Funds Mutual funds/great for diversification Diversification means investing in a wide variety of financial assets By investing in a large group of stocks or bonds, you reduce the risk of what?

5. Mutual Funds – Types Stock or equity funds – Emphasize growth and income from rising stock prices and dividends Investing in common stock – You get paid a __

6. Mutual Funds - Types Bond funds – Offer income at a lower risk than stock funds Can invest in corporate, treasury, municipal bonds

7. Mutual Funds - Types Money market mutual funds – Perform much like bank savings accounts. Not backed by FDIC Fixed income securities – Short time to maturity and low risk

8. Mutual Funds How can you tell how it is performing? Hint: What can you measure it against