Question: Fund FAQs: What is a Mutual Fund
Mutual funds are not the easiest subject to understand. A common question I encounter is: "What is a Mutual Fund?"
Answer: A mutual fund is simply a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective. Europeans started pooling money together in the 1800s, but it wasn't until 1924 that the first mutual fund was born (see "The History of Mutual Funds").
Much like kids might pool their money together to buy the latest video game, investors essentially use mutual funds as a way to obtain access to a large portfolio of stocks, without the millions of dollars and countless hours it might take to buy the hundreds or thousands stocks individually.
If you are interesting in learning more about what a mutual fund is, I suggest reading the full-length article titled "What is a Mutual Fund?" and signing up for the free mutual funds 101 email course.
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