A mutual fund is a pool of investment in which many people invest and gather the money together to earn profit and consider the risk of loss.
Safety of funds:
Safety is the first and foremost important factor for everyone. The mutual funds are not insured and fluctuation can decrease your money. But the brokerage accounts are mostly insured and backed by security. It makes it safe to some extent.
Why buy mutual funds:
Most do not want to waste their costly time in understanding the complexities of individual stocks. They just buy the funds and the manager is free to make the best decisions about the usage of the invested money. Best managers can be hired by mutual funds which are not possible in case of individual stocks. Find a manager who applies advanced Financial advisor software, such as can be found at a site like https://www.intelliflo.com/financial-adviser-software
Why funds are sold?
The companies sell the funds and charge fees and sometimes commission too. These companies want to make money, maybe not for profit in some cases. So, they sell the funds and in return, they get money for them.
Fees and their importance:
The mutual fund companies keep the minds of shareholders busy to avoid the questions about the money and its usage. Many people do not think where their money is used and how much they are charged. All this knowledge is available in the prospectus. Read the prospectus carefully and you will get all the required information about mutual funds you buy or will buy soon.