A mutual fund pools money from many investors to buy a diversified portfolio of stocks, bonds, or other securities, managed by a professional.
In Depth
When you invest in a mutual fund, you're buying shares of a larger portfolio that a fund manager selects and oversees. This allows you to own a small piece of many different investments, providing diversification even with a small amount of money. Mutual funds can have various investment goals, such as growth, income, or a mix of both. They are a popular way for individuals to invest in the stock market without having to pick individual stocks themselves.
Example
Instead of buying shares of Apple and Microsoft separately, I invested in a technology mutual fund that holds both, along with many other tech companies.