Mutual Fund - This is an investment that you can put money into if you want an easy way to diversify your investment. Basically, if you have say $1000 to invest, it might be hard for you to diversify that investment... it'd be difficult to buy shares in 100 different companies with your one grand. Mutual funds do this for you. They take your one thousand dollars and pool it with many other investors, then with that larger pool of cash, they invest into a diversified portfolio.
There are many types of mutual funds, from aggressive to conservative, from cheap index funds (which are only supposed to mirror the performance of a certain index, like the S&P 500) to actively managed funds (which, for a fee, employ supposedly smart people to make active trades in the fund in an effort to provide performance that is better than an index).
There are thousands of mutual funds out there: funds for each type of scenario, from aggressive to conservative. Which fund is for you is a matter of preference and depends upon things like your age, how much risk you want, how sensitive you are to volatility and fees, etc.
Main thing is that if you decide to invest into a mutual fund (assuming you've figured out your asset allocation plan), then make sure the funds you plan to use are good, relative to their peers. This is easy to figure out. Go onto yahooFinance or some other website and look up the morningstar rankings of the fund you're looking at. You want to make sure that the fund you plan to use did well on its 3 and 5 year rankings. You don't need the absolute best (stars rise and fall), but choos
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