How Do I Buy Shares of a Mutual Fund?

How Do I Buy Shares of a Mutual Fund explained by professional Forex trading experts the “ForexSQ” FX trading team. 

How Do I Buy Shares of a Mutual Fund?

Unless you are fortunate enough to have a net worth sufficiently high to give you access to an individually managed account run by an asset management company, the odds are good that you are going to do most of your investing through a pooled structure such as a mutual fund.  We’ve already covered quite a bit of ground about mutual funds but in case you need a quick refresher, here are some useful topic-specific overviews of what mutual funds are, how mutual funds work, and other important concepts:

  • The Basics of Mutual Funds
  • How a Mutual Fund is Structured
  • What is a Mutual Fund Sales Load?
  • Investing in Index Funds for Beginners
  • What is an Equity Fund?
  • Investing in Bonds vs. Investing in Bond Funds

For now, in this article, I want to focus on the actual how.  Specifically, how you would go about buying shares of a mutual fund once you had made the decision that you wanted to own a particular fund.  By doing so, I hope to give you a broader understanding of the mechanics involved.

You Can Buy Shares of a Mutual Fund Through Your Broker

If you have a brokerage account, Roth IRA, Traditional IRA, or other account at a stock broker such as Charles Schwab or Merrill Lynch, you can buy most mutual funds just like you would a share of stock. You simply go to the broker’s website, walk into the nearest branch office, or call your broker on the telephone and tell them the ticker symbol of the mutual fund you want to purchase and the total amount of money you want to invest.

(The ticker symbol is a short code assigned by the stock exchange to represent an investment. If you were buying shares of Coca-Cola, for example, the ticker symbol is KO.  Mutual funds, like stocks, have their own assigned ticker symbols.)

Most brokers are going to charge you a commission or other fees to buy shares of a mutual fund.

  Often, if the mutual fund is structured as an exchange traded fund, or ETF, they will apply the same commission that they usually do for stocks.  In other cases, they will assess a flat fee, usually $49.95 or something comparable, which you can have deducted from the principal investment you intend to make or have it added so that the full principal investment gets invested.  In cases of load mutual funds, commissions can run as high as 5.75% per annum with additional expenses.  However, in cases of load mutual funds, it is possible the load is o

How Do I Buy Shares of a Mutual Fund Conclusion

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