You have three main choices from where to buy a mutual fund. You can go to a mutual fund company, such as Vanguard or T. Rowe Price and pick five mutual fund styles such as: Large-Cap Growth, Large-Cap Value, Small or Mid-Cap, International and Bonds. Or, you can go to a mutual fund supermarket such as Fidelity or Schwab. There is a lot to pick from here, which can also be overwhelming. Lastly, you can go through a broker. The broker usually suggests which mutual fund to buy. Just be careful because this is the most expensive route and the broker might be “pushing” a certain fund based on the commission he or she gets paid.
If you don’t have the minimum needed for a mutual fund (which is usually $2,500), some of these mutual fund companies will let you invest $50 a month as long as you make it automatic and link it to your checking account. For a list of mutual funds that offer low minimums, visit Mutual Fund Education Alliance.
(Copyright Down-to-Earth Finance LLC 2006)
