A mutual fund is a group of investments (like stocks and bonds) that a financial institution combines into a package. When you put money into a mutual fund, you buy a portion of these combined investments. You also pay for the services of the financial professionals that manage the investments in the fund. 

• They are easy to maintain. Once you invest in a mutual fund, the financial institution in charge of the fund manages your investment.
• Mutual funds often involve less risk than other types of investing because they tend to spread your money between many different investments (this is known as “diversification”). The point of this strategy is to avoid major loss, because even if one investment (like a particular stock) does badly, the other investments in the fund could still do well.
• Mutual funds can very easily be converted to cash. You usually can get your money out without paying penalty fees.
• Mutual funds may earn more money over a long period of time than other investment or savings accounts.

• Mutual funds involve risk. Some mutual funds are safer than others, but all involve some level of risk. There is no guarantee that you will not lose money.
• You have to pay for the services of those that manage the fund, even if the fund is losing money.
• Mutual funds can make your taxes more complicated. Learn more.
• You must do your homework. There are many different types of mutual funds, and each fund has its benefits and its disadvantages.
• You don’t have control over specific investment decisions. The financial institution that manages the fund makes all decisions about where and how to invest your money once you decide to put your money into the fund.