Mutual Fund - a mutual fund is an investment vehicle in which equities (stocks), fixed income (bonds), and cash equivalents (money market funds, etc.) are pooled together to hopefully generate growth. Individual securities may be difficult to obtain so mutual fund managers pool them with like-minded investors in order to bridge this gap. Furthermore, mutual funds are invested into based on a strategy. Strategies might include Growth, Value, US, International, Global, Bond, Small-Cap, etc. These strategies help better allocate one's assets as opposed to purchasing individual securities.

Index Fund - an index fund operates extremely similar to how a mutual fund would, however, its objective is to follow or reflect a particular stock index that it is associated to. Indices may be one of several thousand, but the majority associated are:

Standard and Poor's 500 (S&P500), Dow Jones Industrial Average (Dow), Nasdaq Composite, Nasdaq 100, Russell Small-Cap 2000, Financial Times Stock Exchange 100 (FTSE100), or the Morgan Stanley Capital International Europe, Australasia, and Far East (MSCI EAFE).

Bond Fund - bond funds operate very much like a mutual or index fund would, but are solely invested into fixed income notes, bills, and other debt obligations. Bond funds are very complex and detailed. A simple way to understand a bond fund is that it may often pay out some level of a dividend each year due to interest accrual. Since a bond is inherently fixed income, it may grow at a much slower rate than an aggressive growth mutual fund traditionally may.