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Debt Consolidation Count the defaults and you will think the lending company is currently earning out of your original mortgage volume. The basic idea of how mutual funds work, what I call Mutual Funds 101. is simple. You are already aware that mutual funds are a type of investment or savings vehicle. But what are they? Are they like stocks or bonds? How do mutual funds work? A good way to understand mutual funds is to consider them a basket of investments. The reason is that one mutual fund often invests in dozens or hundreds of other investment securities, called holdings, such as stocks or bonds. Therefore, when you buy a mutual fund, you are not buying a particular stock or bond; you are buying a basket of stocks or bonds (or sometimes a combination of both).
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