Comments on: What is a Mutual Fund?

By: kitty

kitty — Fri, 19 Jun 2009 03:38:35 +0000

Since the article mentions bond index fund as well as stock funds, it’s important to point out an important difference between bond funds and individual bonds: individual bonds are fixed-income investments. A bond fund is not.

By: david

david — Thu, 18 Jun 2009 08:26:31 +0000

#1 is correct that each individual shareholder does not have voting rights. HOWEVER, the mutual fund has the voting rights.

The mutual fund has many more shares than you or I would own and thus MIGHT have an influence on how the company is run.

By: jonathan rose

jonathan rose — Wed, 17 Jun 2009 21:35:03 +0000

An alternative to mutual funds is buying income producing bonds. Diversifying out of the dollar will get a double return as you get whatever the investment produces and the devaluation of the dollar. Anyone with more than the FDIC maximum in cash really needs to find an alternative place to store money…..

By: Nickel

Nickel — Wed, 17 Jun 2009 17:51:55 +0000

Alissa: Aaargh! I hit publish too quick this morning. Thanks for the catch. I fixed it.

By: Alissa

Alissa — Wed, 17 Jun 2009 16:31:35 +0000

Not sure you’re aware, but your second paragraph is incomplete, as in it ends in the middle of a sentence.

By: LOL

LOL — Wed, 17 Jun 2009 14:07:27 +0000

Another big difference between an equity mutual fund and out-right stock ownership, is that you have no voting rights as a shareholder of companies when you own shares indirectly inside a mutual fund. No voting rights, means no (or little) accountability for the people who run the companies: board of directors, CEO, etc.

So it is a great question: what exactly is it that you own when you buy a mutual fund.