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1. Determine the amount of money you would like to invest in a mutual fund. Many online brokerage houses have a minimum deposit to open an account to purchase mutual funds. Have an idea of how much you would like to invest so you can narrow down the choices for which brokerage house you should use.
2. Determine your investment style. When purchasing mutual funds, you need to know if you want to build an aggressive investment portfolio or a conservative one. Understanding the type of investor you are can determine not only the brokerage house you will choose but also the mutual fund package you select. Your investment style is based on your age, investment goals and psychological outlook on money and investing. There are many online quizzes that can determine your investment style (see Resources).
3. Check with reputable online resources to determine which popular mutual funds are being offered and their return on investment. For example, Suzy Orman and other financial gurus suggest visiting Morningstar.com to access mutual fund reports. Based on the anticipated return on the investment, you can select time-tested mutual funds that are more likely to be successful.
4. Visit an online brokerage site to purchase your mutual fund. Scottrade, TD Waterhouse or ShareBuilder are popular choices. You can also use resources like Morningstar to determine other brokerage sites that are available. When looking for online brokerage companies, select one that has small commissions for each transaction you make for mutual funds.
5. Register and open your brokerage account by providing your name and other personal information. Due to the Patriot Act, you may also have to provide further proof to verify your identity. You can fund your account by doing a wire transfer or sending in a check or money order. Based on your research, you can locate the mutual fund you are interested in and make a purchase minus any commissions.