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Stocks Vs Mutual Funds
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[QUOTE="Catherine Acorda-Mapalo, post: 4345, member: 488"] When you buy a stock, you are owning a share of the corporation. You make money in two ways. Stocks that offer dividends will pay you something every quarter or year. That provides an annual stream of taxable income. You also make money from stocks when you sell them. Your profit is the difference between the selling price and your purchase price, minus fees. Stocks trade continuously, and the prices change throughout the day. If the market crashes, you can get out anytime during the trading session. Mutual funds pool a lot of stocks in a stock fund or bonds in a bond fund. You own a share of the mutual fund. The price of each mutual fund share is called its net asset value. That's the total value of all the securities it owns divided by the number of the mutual fund's shares. Mutual fund shares are traded continuously, but their prices adjust at the end of each business day. That's not good if the market is crashing. [/QUOTE]
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