Mutual Fund
A mutual fund pools money from many investors and invests it according to a stated strategy.
Why this matters
Mutual funds can offer instant diversification, but costs and strategy quality vary.
Simple example
A global equity mutual fund may hold hundreds of stocks across countries.
Common mistakes
- Choosing based only on recent performance.
- Ignoring MER/expense ratio and other fund costs.
- Not checking whether the fund matches your risk level.