Mutual funds -combine safety and high return on investment
A mutual fund is a professionally managed pool of money formed by collecting money from many investors.
It combines safety with good return on investment. The pooled money is invested in various securities-either debt securities such as bonds and debentures or equities (stocks).
As the money is managed by experienced people the risk is greatly minimized. However this does not mean that any particular level of return on investment is guaranteed. The fund manager diversifies the pool so that loss in one security is compensated by profit in others. Because of this an investor has the advantage of investing in different securities with a relatively smaller amount of money which cannot be done with stock market investing .