Mutual funds are very popular. In fact, they are the one of the most popular investments on the market today. What does that mean in numbers? There are over 10,000 different funds with over $17 trillion in investments!!
Total U.S. retirement assets were $17.0 trillion as of September 30, 2011, down 7.5 percent from the record high of $18.4 trillion in assets recorded as of June 30, 2011. The decline in retirement assets was driven in part by the drop in corporate equity values—for example, the S&P 500 index fell by 13.9 percent in the third quarter.
Account balances fell by less than stock indexes because of asset diversification and ongoing net inflows from retirement plan contributions. Retirement savings accounted for 36 percent of all household financial assets in the United States at the end of the third quarter of 2011.
Why are they so popular? For some, it is because of their great returns. Others like funds because they are easy to buy and sell. Still others like them because they are diversified and less risky.
A mutual fund raises money from investors to invest in stocks, bonds, and other securities. It is a package made up of several individual investments. When those investments gain or lose value, you gain or lose as well.
When they pay dividends, you get a share of them. Mutual funds also offer professional management and diversification. They do much of your investing work for you.
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