Where can I Buy Mutual Funds?
Unfortunately, investing is not as simple as going to the store and placing an order. Luckily, it is much easier these days than it has been in the past. For most mutual funds, you can go online and choose the right mutual fund for you.
Find a Brokerage Firm
As a beginner investor, you want to look for the most cost effective investments. On the internet, there are several investment companies that will allow you to trade stock and invest in mutual funds. Look around to find one that is trusted with excellent reviews and has features that will greatly benefit you.
Year ago, you would have had to set up an account with a brokerage firm in person. Now, investing in mutual funds or stocks is so much easier because you can do it online. Online stock trading has many benefits over a brick and mortar firm, mainly its simplicity and ease, but it can also be cheaper.
Here I have listed some of the online banks and brokerage firms that I use and that I have had success and no trouble with at all. I have been involved with both for over 2 years and have never had a problem with either. Trading stocks online is as simple and safe as it gets!
ING Direct is a trusted online bank that has had available a savings account with a high rate of return for a while now. They have recently acquired ShareBuilder an online brokerage firm. Together, they now offer mutual funds that you can invest in.
What’s great about Sharebuilder is that you don’t need to have a lot of money to start investing. One benefit of mutual funds is that you can invest a small amount and still stay diversified. Sharebuilder offers one of the lowest minimums for investing in mutual funds at $1,000. If you don’t have that much money yet, you can set up an automatic investment plan for as little as $100 until you reach the minimum.
Choose the Type of Mutual Fund
Not all mutual funds are created equally. The fund you choose will depend on how old you are and how much you are willing to risk. Sharebuilder offers several mutual funds in the following classes:
Money Market Funds
Asset Allocation Funds
Fixed Income Funds
Domestic Equity Funds
Enhanced Index Funds
Global Funds
International Funds
Specialty/Sector Funds
You can choose a conservative fund if you are closer to retirement and want to take less risk, or you can choose the growth fund if you are younger and are looking for a potentially higher return. There are also funds for large, mid, and small cap companies, a real estate fund, international funds, and more to choose from.
All you have to do is sign up with ShareBuilder. Once you sign up, you can either buy stocks, invest in mutual funds, or both. Get started now, the sooner the better!
Filed Under brokerage firm, mutual funds, stocks | Leave a Comment
What is a Money Market Mutual Fund?
A money market mutual fund is not like a normal mutual fund. You don’t buy shares like you would an index fund or something similar. It is more like a savings account. Instead of buying shares, you just put whatever amount of money you want to put into it. If you have $100 you want to save, throw it in a money market fund, just like you would a savings account.
What are money market mutual funds made up of?
They contain short term debt instruments. Short term usually means six months or less. This type of fund contains short term debt instruments such as short term bonds that are constantly maturing. This is why you will not see a money market fund with a certain rate.
Money market funds report 7 day returns. For example, you might see a fund with a 7 day return of 3.53%. This is not how much you will earn in 7 days. For example, if you have $1,000 in a mutual fund earning 3.53%, you will not earn $35 in seven days. The rate is for over 1 year, so you would earn 3.53% divided by 365 times 7 which equals $0.0138. That is small, but over a year it would equal $35.
Why isn’t it the same rate all year?
The rate constantly changes because the fund in constantly earning different amounts. The investments are short term, therefore they are constantly maturing and new debt investments are being added at different interest rates.
By determining a 7 day return, investors can see how much they are earning and have a more accurate number than a year average.
Should you invest in a money market mutual fund?
A money market fund should not be used as a long term investment. It does not give a very high return for retirement or other investment goals. It is a good place to keep your cash. Often brokerage firms will keep your cash not invested in a money market account. You don’t exactly need investment software to put your money in a money market mutual fund.
Filed Under money market, mutual funds | Leave a Comment
« go back — keep looking »