How To Invest In Mutual Funds

A mutual fund is a very popular type of investment that pools investors' money to make multiple types of investments including stocks, bonds, money market instruments and other securities.

Trading mutual funds can be done through placing orders with a broker or contacting the fund companies directly. Investors can purchase the funds from a discount brokerage firm that handles different families of mutual funds, such as Scottrade, T.D. Ameritrade, Charles Schwab, to name a few. Trading can also be done online with user-friendly technology and trading platform.

There are many different types of mutual funds you can choose from, such as the follows:
(i) Equity funds: They invest exclusively in stocks of various types of companies with the main objective of providing capital gains for investors through price appreciation of the stocks.
(ii) Money market funds: They invest in high-quality, short-term debt instruments from companies that are highly liquid and low risk.
(iii) Dividend funds: They seek to invest in high dividend-paying stocks (including preferred shares and common shares).
(iv) Balanced funds: They seek to invest in common stocks, preferred stocks, bonds and fixed income securities.
(v) Bond funds: They invest in corporate bonds and government securities to provide income through dividend payments.
(vi) Global and international funds: They invest in equities and debt securities issued by a wide range of companies or governments throughout the world.
(vii) Specialty funds: They invest in specific sectors of the market such as the manufacturing or financial sectors.

* Next: Open-End Fund Vs Closed-End Fund
0 comments: