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Come To Know The Difference Between Shares & Mutual Funds
By KhmengWat.com
“shares” refers to a the ownership certificates of a particular company. This is a unit of account for various financial instruments including stocks, mutual funds and limited partnerships. A share is a unit of ownership of a company that is issued by the company to raise finance to enable it to extend its scope or fund
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other growth related initiatives. If you buy a share, you are a co-owner of a company. A shareholder is a part owner of the company who can influence decisions related to new business venture and the like and also receives a share of the profits generated known as dividends. If the company gets more valuable, your share will usually get more valuable. If the company makes profits, like any owner, you should get share of that profit, called a dividend.
A mutual fund is made of of many investors who buy shares of the fund.
Mutual funds are a long term investment for retirement, 401k plan, etc. They give you diversification which means less risk but in the long term also means less reward.
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