Fans of radio and CNN Headline News (HLN) consumer advocate Clark Howard know that he often recommends Vanguard Investment Group for mutual funds, exchange traded funds (ETFs), and retirement plans. The company's sound business practices and unique business model make Vanguard an excellent, low-cost option for the individual investor.

What is the Vanguard Investment Company?

Vanguard is essentially a mutual fund company. Mutual fund managers use capital from numerous individual investors to buy a variety of stocks and other securities. Each investor owns a small portion of all the fund’s investments.

Mutual funds allow individual investors to create a diversified portfolio quickly, without a large initial investment, and without the risks associated with individual stocks. The fund can easily shed poorly performing securities and replace them with other investments. Mutual funds also serve as the bedrock underlying many of Vanguard’s retirement and savings plans.