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Definition of 'Fund'

A fund is a pool of money that is invested in a variety of assets, such as stocks, bonds, and cash. Funds can be used to save for retirement, pay for college, or invest for other goals.

There are many different types of funds, each with its own set of risks and rewards. Some of the most common types of funds include:

* **Stock funds** invest in stocks, which are shares of ownership in a company. Stock funds can be either actively managed or passively managed. Actively managed funds have a manager who makes decisions about which stocks to buy and sell. Passively managed funds track an index, such as the S&P 500.
* **Bond funds** invest in bonds, which are loans that are issued by governments or corporations. Bond funds can be either short-term or long-term. Short-term bond funds invest in bonds that mature in less than one year. Long-term bond funds invest in bonds that mature in more than one year.
* **Cash funds** invest in cash, such as money market funds and certificates of deposit. Cash funds are the least risky type of fund, but they also offer the lowest returns.

When choosing a fund, it is important to consider your investment goals, risk tolerance, and time horizon. If you are not sure which fund is right for you, it is a good idea to consult with a financial advisor.

Funds can be a great way to save for your goals, but it is important to understand the risks involved before you invest. Talk to a financial advisor to learn more about funds and how they can help you reach your financial goals.

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