WHAT IS A MUTUAL FUND?

Today, most 401(k) plans and other defined contribution plans have participant-directed investments from a menu of mutual funds. For some, this is an opportunity to exercise control over their retirement investments. For others, this is a daunting task with lots of uncertainty.

A mutual fund is a publicly traded investment vehicle that owns a group of individual stocks or bonds. In some cases, a fund will own both. Mutual funds may also hold cash or cash equivalents. Investors purchase shares in a fund that represent ownership in the fund's holdings. You pool your money together with other investors, and then the fund takes that money and invests it for you.