When it comes to investing your money for retirement, mutual funds are, more times than not, the way to go. If you have read a number of personal finance articles, you might notice that writers continually talk about these funds. Still, they often fail to explain the basic premise behind mutual funds; so many investors have a limited idea of what they are.
Starting Steps
Before you can fully understand mutual funds, you have to have a basic knowledge of stocks, bonds, and other important terms. Though these are simplistic explanations of these important terms, they will suffice for the sake of understanding.
Stocks
Stocks are interesting because they give you the opportunity to hold shares in a companys ownership. Companies that offer stocks are often referred to as public companies because their ownership is comprised of many public entities. If you want some examples of these companies, you might look at Pepsi, Microsoft, or even IBM. Stocks are extremely popular as the most traded bit of ownership that is traded on the open market.
Bonds
With bonds, you arent directly investing your money into a public company. Instead, you are...
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