There are different types of investments e.g.
Security-specific e.g. you may invest in shares of Apple, or bonds of General Motors, etc.
Pooled funds e.g. mutual funds. In this case, you invest in units of a mutual fund which has a specific mandate. E.g. the fund may be an agricultural-oriented mutual fund so what the fund managers do is that they identify the highest-potential investments for growth and returns (note there are 2 forms of returns - capital growth and dividends) in the agricultural sector specifically, and invest accordingly. They don't go outside the mandated sector.
Then there are index funds. If you watch CNBC, CNN, etc. there is often mention of how "the S&P500 closed up 4 points today", or "the FTSE50 closed down 4 points today", etc, along with an index number.
How this index number is constructed is that each index constructed from a selection of stocks. In the case of the S&P500, it is constructed from 500 stocks selected by the S&P Index Committee. More details in attached link.
http://www.investopedia.com/terms/s/sp500.aspBecause indexes cover a wide swathe of an economy (i.e. agriculture to finance, consumer to industrials, oil & gas to properties), indexes won't have the same level of volatility like pooled funds or specific securities. They are effectively diversified.
http://www.investopedia.com/terms/d/diversification.aspBecause these indexes are transparently set, some mutual fund managers construct index investments -
you effectively are investing your money across all the components of the index. There is no fund manager doing stock selection - it is lower cost than investing into (for example) a hedge fund - however, do not expect hedge fund returns since you are effectively paying for their skills. There are no skills required in constructing an index investment, the fund managers are just replicating the index.
The leading index fund manager in the world is Vanguard. Check it out too in the link below.
https://investor.vanguard.com/home/And after all that, if you are still interested in Keza, check it out
http://themerkle.com/bitcoin-investment-startup-keza-unveils-ios-beta-app/https://www.producthunt.com/tech/kezahttp://getkeza.com/ (It's free to apply for a Keza account)
