After learning about stocks, now you need to know about mutual funds and how to invest in them. A mutual fund is built based on the contribution of hundreds or even thousands of investors. All this pool of money is then invested in a portfolio of stocks, bonds, real estate and other type of securities.

When you invest in a mutual fund, you are entitled to receive profits proportionally with the amount you allocated. Here are several reasons why investing in them is a great way to save and grow your money:

• they are diversified investments. An individual investor usually puts a great amount of money in one kind of stock or instrument, which can be risky if things turn out bad for that company. So a fund lowers that risk, and give you exposure to a diversified portfolio;
• they are easy to be managed for you, as the professional manager takes care of your purchases. The managers know how to handle and care for the funds;
• they are easier to deal with, as you have only one portfolio to deal with instead of hundreds of stocks.
• they are liquid. This means you can pull your money out of the fund whenever you want. Depending on the fund regulation, the money can take up to 3 days until they arrive in your bank account.
• You can buy them with lower amounts. Typically a brokerage account to buy stocks requires certain minimum amounts like USD 5,000 or USD 10,000, but mutual funds you can buy also for much lower amounts, like a couple of hundreds dollars.
• they are less risky than stocks, because of the diversification effect. This way, you might have access to the performance of tens or hundreds of companies that are included in the funds portfolio.

So you can start your investments with some mutual funds, as you don't have to spend a lot to get started.