Mutual Fund

A mutual fund collects money from thousands of investors and hands it to a manager, who buys a spread of investments according to the fund's goal. You own a slice of the whole pot. It is a simple way to get diversification without picking dozens of stocks yourself.

Unlike an ETF, a traditional mutual fund is usually bought and sold once a day at its end-of-day value, not throughout the session. Watch the fees: a small yearly percentage, quietly skimmed for decades, adds up.