Mutual funds are popular investments because they offer a cost-effective and efficient way to diversify your investments (or own a variety of securities — stocks, bonds, etc.) without having to make a large initial investment, which can be ideal.

When you purchase shares of a mutual fund, you’re pooling your money with other investors and letting the mutual fund (which is simply a professional money management company) invest and manage the money to help meet the fund’s specified investment goal (e.g., growth, income, or a combination of the two). It’s worth carefully considering this approach.