Investment Categories

How Many Investment Categories Do You Know?

by Richard Jenkins on Apr 21, 2009

Mutual funds have some advantages over individual securities, including easier diversification, lower transaction costs and access to professional money management. A mutual fund publishes its investment objective in its prospectus . The Securities and Exchange Commission requires every mutual fund that sells its shares to the public to publish a prospectus. You should always read the prospectus before investing in a fund. A fund's investment objective explains how it intends to achieve its desired results. The investment objective identifies the types of investments the fund can and cannot buy. For example, a growth fund seeks to invest in growth stocks , while a government bond fund seeks to invest in Treasury bonds and other government-issued securities. Here are some of the major mutual fund investment categories, beginning with stock funds: Value. Value stock funds invest in value stocks . These are stocks that are considered cheap relative to other stocks...Read More >>