With a mutual fund do you realize gains only when you choose to sell? For example, if i invest $100 and in a month it gains 1 percent, would the next month mean I would earn interest on $101? If the portfolio manager sells a certain stock from the portfolio would you then realize the gains on that particular investment?
Responses (3)
Get a financial planner.
When you play the stock market thinking you are going to earn money you are going to get a sad surprise.
"Money-market funds are a particular type of mutual fund that is required by law to invest in low-risk, short term securities. Money-market shares can be bought or sold at any time. ... However, money market funds are not guaranteed by any agency."
Given the S&P 500 has performed at roughly an 11% annual return since inception, I don't think it's a stretch to assume 8% gains. Mutual funds, at their worst, or even a good index fund should stay on par with the S&P 500. My question was about realization of gains. Not whether or not you can make money in the stock market. I already know the answer to that question.