Investing is making a conscious decision to be proactive about what you are doing with your money, and how you are going to use it to make more money and make it work for you. Investing is not the same thing as saving however. Saving is simply putting money away, where it might earn some interest if it is in a banking institution, but it is not actively earning more money. When a person chooses to save their money, it is usually done so not with the desire to make more, but to put aside and protect the amount they started out with. When investing, the primary goal is to see a return on your money.
     When one buys into the stock, or invests, in a particular company, they are now in part ownership of that company. This part ownership gives you accessibility to certain rights. One of these rights is the right to be able to vote on certain important matters that come up before the company, and you are also given the right to be a part of the profits if that company has distributed dividends. One major difference here between saving and investing is that when just saving you have no ownership in the bank in which your money is being held, as opposed to buying stock in that bank, you become a part owner in their profits. When investing, you must face the fact that there will always be the risk of losing part or all of your monies invested. Even when making a very calculated investment decision, you must also weigh in the possibility that you could lose some or all of your investment.
     Mutual funds are simply a collection of stocks and/or bonds. Each particular investor owns a share of these stocks or bonds, and represents their portion of these holdings. Money can be made from mutual funds in three ways; firstly, if the fund’s holdings increase in price but are not sold, then the fund’s shares will increase in price at a benefit to the stock holder. Secondly, income will be earned from the dividends on stocks, and the interest on bonds. Most funds pay out nearly all the income it receives over the course of a year in the form of a distribution. Thirdly, if the fund has sold securities that increased in price, the fund has a capital gain. These gains are then passed on to the investors in a distribution. Some of the downsides to mutual funds are poor professional management, too much diversification which results in dilution of the fund and a very low return on the investment, and capital gains taxes which result in more money being taken away from the investor, and again a low return to the investor.
     The stock market is a public market in which ant person can buy, sell and trade whatever stocks they desire. The stocks are listed and traded on stock exchanges, which are headed by companies that specialize in bringing buyers and sellers together.  The stock market can be navigated with some help from professional stock traders, and can be a good option for those looking to learn how to invest and trade.