Different Types Of Mutual Funds

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Types of Mutual Funds
We have seen many evolutions in the stock market since its inception. Mutual funds have lasted through many of the changes we have seen over time and show no real sign of faltering. Below you will find a brief description of the various types of mutual funds currently on the market.
Equity Funds. These funds deal with equity shares of corporations. They carry not only high risks but also the opportunity for high rewards. Depending on the industry involved, these funds may be sector oriented (technology funds will invest in emerging technologies for example) or diversified meaning they consist of many funds from different sectors.
Debt Funds. As their name applies these funds deal primarily with debt-oriented mediums
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If you have a little bit of adventure but don't want to 'risk it all' then perhaps the balance fund is your best destination.
Price Determination
Once you have a basic understanding of the available options, the next step lies in understanding the price and how it is determined. The income of mutual funds is generally acquired in the form of interest, dividends, and trading. In debt securities however interest income is all but assured. This is not the case when dealing with equity stocks and the dividend in these situations depends on the profits earned by the company among other factors.
When investing in debt funds it may be that your best interest would not be a mutual fund. If you can afford the investment without the mutual fund you should determine which would be best for your situation. You want to choose the route that will offer you the higher reward. Keep in mind that market trends do not carry quite the weight when dealing with debt funds, as they will with equity funds.
Equity funds offer trading that is based on the perception of the fund manager as to what the market is preparing to do and the current risks vs. the potential reward. There are many things that will affect a stocks future from legislation to competition and millions of things in between that aren't limited to technological advances and scientific breakthroughs. Thus the higher risk nature of this particular type
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