Mutual funds make sense for many investors, because they’re managed by professional portfolio managers. That means you don’t need to worry about watching the market or monitoring a stock portfolio.

Mutual funds work like a basket of stocks or bonds, and when you buy shares of a mutual fund, you get the benefit of the variety of assets held within the fund.

You can choose from a wide variety of funds with different risk profiles. Some hold large-company stocks; some blend large- and small-company stocks; some hold bonds; some hold gold and other precious metals; some hold shares in foreign corporations; and just about any other asset type that comes to mind. While mutual funds don’t completely take away risk, you can use them to hedge against risk from other investments.