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Mutual Fund Managers

In a mutul fund, you put your money in, alongside all the other investors and the resulting large sum of money is used to buy securities and stocks which are likely to appreciate in value. Once the stocks and securities have appreciated, you have the option of selling your share back to the fund at its current market worth - which will net you a profit. The decision to put the money into the fund is yours, as is the decision to take money out again, but who makes the decisions as to what the money you have invested in the mutual fund is used to buy?

Mutual fund managers are, essentially, professional investors - they will take your money and put it towards the stocks and securities they think are most likely to increase in value. They move the stocks around, sometimes selling stock in one commodity and buying stocks in a different one. This ensures that your mutul fund has a constant flow of stock, as well as new investors coming on board and adding their money to the pot.

Can I Trust My Mutual Fund Manager?

It is possible that you will never even meet those responsible for managing your chosen investing mutual fund. Whether or not you trust them will most likely not come into it on a personal need to decide which mutual fund to invest in by comparing the performance and standard trends of value of several funds.

Ultimately, once you have signed your money over, you have to have faith that the small group of people in a boardroom responsible for managing your mutual fund know what they are doing.

It is obviously in the best interest of your mutual fund managers that the fund performs well, as this will ensure them a steady flow of investors and a steady influx of money into the fund - this is what they are paid for (and where the money to pay them comes from).

Even if an investing mutual fund one day collapses, the stock it owns becoming suddenly worthless, leaving the investors with nothing to show for the money they signed over, you would still read about the large payoffs which have been given to those who were formerly responsible for managing the fund.

What Does My Mutual Fund Manager do for Me?

Mutual fund managers specialize in managing portfolios which have been collected using the money invested by other people. The more people who have invested in the portfolio, the more money they will have to play with. They have to be on the ball all the time in order to ensure that the funds capital is always being used in the most sensible way possible and that the stock held by the fund is always the best stock in the current financial climate.

Essentially, your mutual fund manager spends their time making sure that your money is always invested as well as it can be.

Why Invest in a Mutual Fund?

If you decide to invest in a mutual fund, it can be a good way of tucking something away for a rainy day. If you find yourself with a need for some extra cash, you can contact your representative and request that your stock be sold - the fund will buy it back off you at the current market value. If the market has been going well, you will stand to make a profit, but if not then you could lose money. If you find yourself with some extra money and you are not sure what to do with it, then investing in a mutual fund may be a good solution, but in the current financial climate, any investment needs to be looked at with a certain 'some you win, some you lose' mentality.