Definition
A stock fund pools money from many investors and invests it in a diversified portfolio of stocks. You buy units in the fund and get exposure to many companies at once — without having to choose individual stocks yourself.
Fund types
Index fund — follows an index automatically · Actively managed fund — manager selects stocks · ETF — exchange traded fund · Bond fund — invests in bonds
Advantage: Automatic diversification with one investment. Especially good for beginners and those who do not want to follow individual stocks.
"Strength in community applies to investing too. A fund pools many kroner into one strong voice in the market."— Florence Scovel Shinn