How to Buy Mutual Funds

Millions of Americans buy mutual funds by simply choosing them as an investment option in their 401k plan.  How do people go about investing in mutual funds outside of their retirement plan at work?

 

There are at least three popular ways average people buy mutual funds, each with its advantages and disadvantages.  Where to invest depends to a large extent on how involved you are willing to get in the process.  Some people want to learn how to invest, and others want to rely on someone else to handle their investments.

 

Let’s look at three popular ways to buy mutual funds, starting with how to invest if you want to rely on someone else.

 

If you want to buy mutual funds with a minimum of time and effort on your part, contact an investment professional.  Even though these folks usually call and solicit you, you can call them.  Look in the phone book under financial planners, stock brokers, or investment services.  Some life insurance agents sell mutual funds as well.  Perhaps your local bank or credit union has a representative on board who sells mutual funds.

 

The advantage of this approach is that someone helps you make financial decisions, and deals with the details, including the paper work.  The disadvantage is that you will pay sales charges (loads) and/or other fees that you can otherwise avoid.  Rather than choosing a professional at random, I suggest you ask investors you know who they deal with, and how they feel about them.  Needless to say, some professionals in the investing business are better than others at their job. 

 

A second popular way to buy mutual funds is the