Denver Business Daily

How does bond work and also how does mutual funds work?

Lets say I have $500 dollars and I want to buy a bond, how would it work? Also, how exactly do mutual funds work?

Public Comments

1. A bond is a loan to a borrower with a promise to repay principal plus interest to the lender. A mutual fund is an investment that pools money of investors together, then gives it to a money manager than invests in a number of securities, such as stocks, bonds, money markets, real estate, precious metals, etc. For now, I'd put that money in a savings account.