<prompt> Human: I see a lot of posts about Vanguard Admiral Shares or mutual funds and Im unclear on what their purpose would be in a portfolio? As an example, I have a Roth IRA, 401k, and high interest online only savings account. Im planning to buy a house in 3-4 years and my down payment money is in my savings account that is only getting 0.8 interest or something like that. A friend of mine invests his down payment money in the stock market and mutual funds and keeps telling me I should do the same or I will never get there. Is he right or wrong?  <response>: Is he right or wrong?He is neither right nor wrong. He is simply taking on more risk in the hopes of higher returns. I see a lot of posts about Vanguard Admiral Shares or mutual funds and Im unclear on what their purpose would be in a portfolio?To gain broad exposure to thousands of securities. Diversification is pretty much the only free lunch out there. 