Mutual funds according to dictionary.com is an “investment program funded by shareholders that trades in diversified holdings and is professionally managed”.
What does this mean in English? Glad you asked! Basically means that rather than buying shares of 1 stock like Apple, you instead buy one share of Apple, 1 share of Samsung, 1 share of yada yada. It makes it so if one stock does poorly, the others can help balance it out and have minimal to 0 loss.
Pretty cool eh?
Also it is fully amanged by someone, so say goodbye to watching our shares constantly during work!
Mutual funds are a product of an investment manager company. It is the investment manager who regulates the portion of placements in the money market, stocks or debt securities. They also determine the composition of the shares purchased.
Like instant noodles, this investment company is the producer. Well, mutual funds are instant noodles. Instant noodles have various flavors and types. Some are boiled, some are fried. There are soto flavors, chicken flavors, and other flavors. Some are made from wheat flour, some are made from rice flour.
Likewise mutual funds. One investment manager does not only mix one type of mutual fund, there are many concoctions, with different compositions. Investors then choose which product to buy. Well, various types of mutual fund variants are sold through banks, insurance companies, to online sites.
Unlike instant noodles, which can differ in prices from one store to another, mutual funds are sold at the same price at different sales agents. So, it's not a matter of buying mutual funds anywhere, in any bank, or on any site. What must be the concern of Endang is what product and investment manager mix should he choose.