Investing

Do-It-Yourself Mutual Fund Investing

One of the advantages of mutual funds is that they make it easy for you to buy and sell shares on your own.

How to buy shares

Most mutual fund shares can be purchased directly from the mutual fund company. Buying mutual fund shares is easy to do. You simply contact the fund, which will send you an application form to fill out and return with your money. Each time you buy more shares, you will receive another investment form.

Although you can buy shares yourself, many investors prefer to have a broker or advisor do it for them. Brokers and other financial advisors offer investment advice about funds, in return for which they may receive commissions or fees.

Buying shares automatically

You can also set up an automatic investment plan when you complete your fund application. With an automatic investment plan, you can have a set amount of money withdrawn from your bank or credit union account each month and sent to the fund. Funds that require a minimum initial investment may waive this amount if you agree to an automatic investment plan.

Selling shares

Shares may also be sold back to the fund. You can redeem shares by contacting the fund company and requesting to redeem shares. Many funds allow you to redeem shares over the telephone, but some require written requests. The fund’s prospectus, a document that describes the fund’s investments and performance, also explains your options for redeeming shares.

Most mutual fund shares can be purchased directly from the fund, though some investors prefer to buy through brokers.
You sell shares directly back to the fund.
Both the public offering price and net asset value are quoted in the financial pages.

About mutual fund prices

Current mutual fund public offering price (POP) and net asset value (NAV) are quoted daily in the financial pages. To calculate NAV, fund managers add the total value of the fund’s assets, subtract all liabilities, and then divide by the total number of shares that the public owns (called outstanding shares). The POP is the NAV plus the sales charge, if any.

Disclosures