What is the purpose of mutual funds?
Mutual Funds are a type of investment vehicle designed to provide diversified portfolios for investors. The main goal of Mutual Fund companies is to make money by investing in large pools of stocks, bonds or other securities and then earning returns on those investments through dividends paid out to shareholders (in the form of shares) as well as capital gains realized when stock prices rise above their purchase price. They operate similarly to Savings Accounts: you deposit your cash into them and they invest it over time; but instead of getting interest earned from savings account balances, they earn profit by taking risks/investing your hard-earned money!

The key difference between mutual fund managers and stock traders is that stock traders take actual ownership of assets while management teams hold shares representing ownership in the company itself. This means they can lose some or all of an asset's value even if they don't trade it themselves.