Making A Great Investment, Questions and Answers

Good Essays
1.Outline the reasons why investors purchase mutual funds.

There are varies reasons why investors purchase mutual funds. Professional management is one of the reasons investors purchase mutual funds. The second reason investors purchase mutual funds is for diversification purposes. Mutual funds are “investment companies that pools the money of many investors” (Hughes, 2009,P.513). “A mutual fund pools money from hundreds and thousands of investors to construct a portfolio of stocks, bonds, real estate, or other securities, according to its charter”(CNNMoney). Mutual funds may be go up and down. “And while some mutual funds consistently showed positive returns, many shareholders experienced a roller coaster ride, with prices for mutual fund shares increasing and decreasing over the first seven years of the century” (Hughes, 2009, p.514) Mutual funds closed-end-funds, open-ended funds, and exchange change funds. Investors should know the characteristics of their mutual funds. While closed-ended-funds are given by the investment company open-ended-funds are requested for the investor. For example, with closed-ended-fund the company deals with the funds. Furthermore, open-ended-funds allow the investor to deal with the funds and make request for them.
2.Go online to the site of The Motley Fool ( that deals with investing on the Internet. Analyze this Web site and write a brief report of your findings that are pertinent to the average investor. This website
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