How to Get Started In Mutual Funds

If you have never invested before, you may not know how to get started in mutual funds. Mutual funds are a relatively safe, low-risk way to get started in investing. You simply invest at least the minimum amount the mutual fund requires (usually between $100-$3,000). The mutual fund manager invests your money, along with that of the other members, into stocks, bonds, real estate, gold and other investments you might not be able to invest in on your own. With a mutual fund you can own small pieces of big pies.

Difficulty: Easy

Instructions

Things You'll Need:

• A good understanding of how much or little risk you are willing to take: your risk tolerance
• Money to invest
• A financial advisor or planner
• Investment plan

Getting Started with Mutual Funds

1. Determine how much money you want to invest, for how long and in what kinds of investments.

2. Figure out how much risk you can handle and stay below that amount.

3. Call your bank to see what kinds of mutual funds they offer.

4. Research mutual funds online using a search engine, money or investment sites or investor's forums.

5. Once you've found a mutual fund you can afford (both money and risk), examine its prospectus to ensure there are no hidden fees, front-end or back-end loads or 12B-1 fees, so your investment is worth as much as possible.

6. Ensure your fund is well diversified so you have the best chance of maximizing your investment.

Tips & Warnings

• Before you jump into buying mutual funds, you should have a good idea of why you want to invest, how long you plan to invest, what kinds of returns you hope to get and how much risk you can handle.
• A solid financial planner or mutual fund manager can make all the difference in whether your investment experience is great or horrible, so look into the background of the person who is going to help you.
• Mutual funds are not good investments if you have a lot of debt, no retirement plan and no back-up emergency savings. The risk that you might lose your money means you could be worse off than if you hadn't invested at all.

[Moneybee]

on 12/14/2007 Nice article. However, I found some more information on mutual funds, which I would like to share with mutual fund investors:
http://www.appuonline.com/mf/knowledge/concept.html

[Moneybee]

on 12/14/2007 Nice article. However, I found some more information on mutual funds, which I would like to share with mutual fund investors:
http://www.appuonline.com/mf/knowledge/concept.html