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As the individual investor may not have the expertise to invest in individual bonds and stocks, mutual funds provide an easy way to tap into the markets with diversified portfolios. A mutual fund is typically structured as a basket of different investments, categorized according to a particular investment strategy or desired target. Imagine that you believe that the rate of people entering the retirement age in America will require large hospital and healthcare resources to attend to all these individuals. You decide to invest in the hospital and healthcare industry, but not sure what particular company's stock to purchase. In that situation, you can easily invest your money in one of many heath & hospital mutual funds or exchange traded funds (ETFs) that add your investments to a diversified basket of investments in that particular industry that you want to target.

Mutual funds provide accessibility, liquidity, diversification and investment options for the average investor, mostly at very little cost (however, you must do your due diligence on the cost structure) and the assigned readings provides an overview of mutual funds basics that everyone must understand. Many employer sponsored retirement accounts (401K more popularly) offer mutual funds selections for their employees, which currently or in the future may provide you with an easy entry into the world of mutual funds and stocks and bonds investing.