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Are you new to investing? Watch these videos to learn about some common investing terms to help you better manage investments and save for the future.

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What’s a mutual fund, and is it really like sushi? In this video for investing novices, you’ll find out how similar the two products really are.

Find more articles about investing and personal finance at https://fidelity.com/mymoney

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A mutual fund is like eating sushi. Okay, it’s like eating a certain kind of sushi.

Imagine that you just walked into a sushi restaurant. First of all, the chefs and servers yell at you, “Irra-shai-mase!”

But you don’t find that the least bit confusing or frightening, because you’ve been around and you know it just means, “Welcome to our restaurant.”

So you belly up to the sushi bar, and you order the omakase, and you sit back and wait for the deliciousness to begin. “Omakase” means “entrust,” which in your new favorite sushi bar loosely translates to “chef’s choice.” You’re entrusting the sushi chef to create a special multi-course menu for you with samples of a large array of foods, and usually the best and freshest fish in the house that night.

Now, when lots of regulars at your favorite sushi bar order this way, the chef can buy lots of different ingredients and give the customers much more variety than they would get if they just ordered piecemeal off the menu.

That’s sort of how mutual funds work. When you have a modest amount of money to invest, you might only be able to afford a few shares of individual stocks. With a mutual fund, lots of people put a modest amount of money in, creating a large amount of money that can invest in many things. Then each investor gets to enjoy the benefit potential of participating in a large colorful platter of diversified investments.

The portfolio manager is the sushi chef. The mutual fund: the omakase. The portfolio manager selects the mix of investments and uses the money through all the investors that bought into this fund to buy the various diverse investments he chooses. The investors can then potentially make money if they sell the shares of their mutual fund for more than they paid for them.

Oh, and just like each sushi chef has their own style and approach to cuisine, each portfolio manager has their own style and approach to investing. So, you’ll want to research the fund and the manager before you pick the mutual fund, to make sure that you choose one that’s in line with your investing palette. After all, omakase of octopus and sea urchin probably isn’t for everyone.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

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Meet Jeff Peterson, Account Executive for High Net Worth Investors in Fidelity’s Premium Group.

Over the past 7 years he’s been helping Fidelity clients become more confident in their investment strategy, their retirement planning, and the overall protection of their assets.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

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Learn the details behind general obligation municipal bonds – what they are, why they are created, and how they work – with this illustrated video by Fidelity.

To learn more about municipal bonds, please visit https://www.fidelity.com/fixedincome-....

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Many people purchase municipal bonds as part of their overall investing strategy, but there’s quite a story behind how they are created, how they work, who’s involved. The municipal bond process can be a complicated one, so we’ll try to simplify it for you.

Our story begins by paying a visit to Anytown, USA. Anytown is a great place to live. There’s a thriving cultural scene, good schools, and a strong business environment. It’s no wonder that many families have moved here. But, with lots of families now living in Anytown, the schools are bursting at the seams. The mayor, town council, and school district leaders all agree that a brand new school is needed, in addition to expansions to some of the existing school buildings. But, at an estimated cost of $30,000,000, how will the town pay for it?

The town leaders come up with a plan to raise these funds by issuing bonds. This means that Anytown will borrow money from investors with the expectation of paying them back, with interest, over time. The people who will actually use the school building in the future will also be the folks paying for it. Anytown will use property tax revenues to repay the investors, backed by the full faith and taxing authority of the town. This is called a “general obligation municipal bond.”

But, things can’t move forward just yet. Voter approval of the proposal is required. So, a bond proposal is developed and put on the ballot, as part of an election. The votes are tallied and the proposal is passed.

At this point in our story, some new characters enter the scene: the underwriter, the bond counsel, and in most cases, the financial advisor. The financial advisor helps Anytown make decisions regarding the bond issue and works with the underwriter to determine pricing and distribution to investors. The underwriter acts as a liaison between the town and potential investors when bringing the bond issue to market.

An underwriter can be chosen in two ways: via competitive sale or negotiated sale. The leaders of Anytown decide to go the competitive route, and put the bond issue out to bid. This is where the bond counsel, Smith & Jones Law Firm, enters the picture. Smith & Jones prepares the bond documents, including the Official Statement, and since Anytown has chosen the competitive route, a Notice of Sale. The Official Statement contains all the information a prospective investor needs in order to invest in Anytown’s bond issue. The underwriter will review the Official Statement and decide whether to bid on the bond. The bond counsel also writes the legal opinion, which provides justification and law for the tax exempt status of the issue and ensures that the bonds are valid and binding obligations for Anytown. The firm does not comment on the investment merit of the bond issue.

Now that the legal opinion is in place, the Notice of Sale can be completed and posted. ABC Investment Bank sees the ad and is interested in underwriting it, with the ultimate goal of buying the muni bond issue from Anytown, and reselling it to investors. Before submitting a bid, however, they would like to invite other investment banks to participate with them, so they decide to form a syndicate and act as the syndicate manager. Forming a syndicate will allow the bank to share the marketing and distribution duties, as well as some of the financial risk of underwriting the bond issue.

Two banks, JKL and XYZ, agree to join ABC Syndicate and they submit a bid.

Back at Anytown town hall, the bid is reviewed, along with several others up for consideration. After much deliberation, the bond issue is awarded to the syndicate formed by ABC Investment Bank because they turned in the lowest borrowing cost. The syndicate goes to work as the underwriter, reaching out to individual and institutional investors to determine their interest in purchasing the bonds [...]

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

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