Mutual Fund
Investment companies pool the money of many investors and use it to invest in stocks, bonds or both. Professional money managers are hired to manage the mutual funds. This manager will buy and sell the stocks and/or bonds necessary to achieve the fund's objective.
A mutual fund is like a big pizza cut into slices. Each slice is called a share. The share price is called the Net Asset Value (NAV). Unlike a stock price that will fluctuate all day long, the mutual fund price changes only once a day, at the close of the stock market.
Mutual funds offer investors professional management, flexibility and variety. You can diversify by buying into the various mutual fund types without having the anxiety of picking the individual stocks.