Stock Trading

How is investing in Mutual Funds different from investing in stock?

Buying stock is you basically buying a share in one company. A mutual fund is a group of people pooling money together to buy a range of stocks and a manager administers the money. As an example, if you have $10,000 you may choose to put all $10,000 into one stock as you feel you do not have enough money to buy several kinds of stocks. In a mutual fund there may be a 100 people with $10,000. This gives the fund buying power of $1million. The manager has enough money to buy stocks in different companies and spread the risk.

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