In this episode, I am going to explain what mutual funds, index funds and ETFs are, and which one is recommended and why! Even though I am mostly a real estate investor, I do want to diversify my investment portfolio. In summary:

1. Mutual Fund: A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt. 
2. Index fund: A type of mutual fund that seeks to track the returns of a market index, for example, the S&P 500 Index.
3. ETF: ETFs offer investors a way to pool their money in a fund that makes investments in stocks, bonds, or other assets, and can be traded like a stock.

The recommendation is Index funds due to its low fees and the fact that in the long run it usually outperforms the other types of mutual funds. 

References:

• Investor.gov
• New York Times article:

https://www.nytimes.com/2020/07/31/business/mutual-fund-winners-stocks-bonds.html

• The Balance article:

https://www.thebalance.com/how-and-why-john-bogle-started-vanguard-2466413