Mutual Funds

Financial intermediary that pools the savings of investors for collective investment in a diversified portfolio of securities. A fund is "mutual" as all of its returns,minus its expenses, are shared by the fund's investors.

"The Mutual Fund Industry Has Been Built, In A Sense, On Witchcraft."

Fund managers build a diversified portfolio to offer reasonable returns at lower risk than the stock market. Since fund managers create and manage the portfolio, they charge a fee in the name of an expense ratio where buying, selling, or holding various securities is within their power.