Mutual Funds

Although today's mutual funds can sound complicated with technical jargon such as "no-load" and "open-end," mutual funds are simply a group of individuals putting their money together in order to have a greater amount to invest in various stocks or bonds (typically) or other investment instruments. Each investor owns shares in the fund; the fund, in turn, holds shares in individual stocks, or purchases bonds, or holds mortgages, or operates in whatever investment vehicles the owners decide on. Most mutual funds today are so large that they are managed by professional fund managers, and individual

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in price was due to the institutional investor and the mutual fund. Investors began to seek out funds based on their previous performance and emphasize those funds which used "modern" management techniques in order to spot companies and industries which would offer significant growth. Income and capital preservation funds became less popular and performance funds commanded the majority of new investors in the market. By 1965, more than 6.7 million shareholders participated in the mutual fund industry, and assets reached more than $35 billion. During the 1970s, mutual funds experienced stagnation. Sales were steady at approximately $3 billion, a significant decline from the $7 billion reached in 1969. In addition, withdrawals far exceeded sales in some of those years (seven) as consumers turned to new money market funds. Such funds passed traditional equity and bond funds in 1979, and were three times the size of these funds by 1981. By 1982, the stock market began to feel the effects of the Fed's policies. Under Paul Volcker, the stock market rebounded and sales in stocks and bond funds reached $16 billion by the end of 1982. By the end of 1984, sales totaled more than $46 billion. Interest rates and inflation continu
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Approximate Word count = 3170
Approximate Pages = 13 (250 words per page)

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