Mutual funds have been through many changes since inception. Their popularity is well known. Mutual funds can be a good investment vehicle no matter what your age or income.
It can become overwhelming for any investor to try to consider all the possible investment choices. Choices such as mutual funds, securities, stocks and bonds are just some of the vehicles to think about. One of the most popular choices is mutual funds, which is a very flexible one.
The first ever mutual fund, known as the Massachusetts Investors Trust was established in 1924, but the idea of a group of investors pooling their money together for one big investment goes back even farther. Evidence of this style of investing can be traced back to Europe in the mid-1800s. The staff and faculty at Harvard University were the first group to undertake this type of investing in the United States in 1893. It was this group investment that went on to become the very first mutual fund in U.S. history.
To say that this first mutual fund was successful would be an understatement. The fund, which started out with 200 investors and a beginning infusion of capital of $50,000 dollars, grew to a value of almost $400,000 in the matter of a single year. As of early 2008, the worldwide value of all mutual funds totals more than $26 trillion.
Mutual funds can invest in many kinds of securities. The most common are cash instruments, stock, and bonds.To compare those numbers to today, there are approximately 10,000 different mutual funds available right now, representing 83 million investors inside the United States, making mutual fund investing one of the most popular and widespread forms of investing in the U.S.
The rules of investing in mutual funds changed dramatically after the great stock market crash of 1929. The Securities & Exchange Commission (SEC) was born, and with the help of two key pieces of legislation, the Securities Act of 1933 as well as the Securities Exchange Act of 1934,the government would take a pivotal role in trying to protect potential investors from getting ripped off. The SEC requires that companies file their financial information with them, so that investors can see which companies are healthy and are ready to grow, and which companies to stay away from.
The creation of the SEC did wonders for consumer confidence in mutual funds, and by the 1960's the mutual fund market had exploded. There were an estimated 270 different mutual funds that anyone could invest in with a value of about $48 million dollars.
Mutual fund investing fluctuates with the market, and a well-run mutual fund may make you money. You should check what investments are in the fund's portfolio and determine if your return is what you are content with. But remember, there is no certainly to be had in the investment world. So be careful when investin***