Mutual Funds Part 2
A lot of times, investments in a mutual fund are part of a retirement account and are becoming increasingly popular today for that reason. The net asset value is the price of your share at any given time. This is calculated by taking the current market value of the securities in the portfolio, minus the liabilities, divided by the number of shares outstanding.
An advantage of purchasing a mutual fund is that you also get a full-time professional who works in the business of finance to monitor your investment for you. You have to do virtually nothing but give them your money.
There are four characteristics of funds when it comes to mutual funds. A closed-end fund issues shares only when the fund is organized. An open-end fund issues shares at the request of the investors. A load fund requires investors to pay a commission each time they purchase shares. This commission can be as high as 8.5%. A no-load fund does not require the investor to pay any sales charge. Mutual funds are classified into stock funds, bond funds, and other funds.
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