Money Growth Can Be Substantial
Over the last twenty years, mutual funds have become quite popular with more than 80 million individuals investing in them. Investing in them gives everyone the opportunity to get their share of the market, and if they deliver, money growth can be substantial.
Mutual funds that focus on large, fast-growing companies that have high revenue growth earnings and do not pay dividends, but are making significant earnings are called 'growth funds'. Growth mutual fund managers will take risks and pay more for stocks in order to construct a portfolio of those companies that have above average earnings consistently and/or price appreciation. These funds can be and often times are more vulnerable to rises and falls than other mutual funds. When a market is on the downside, a manager must be aggressive to make up for the loss or a lot of money will go down the drain.