Do you purchase them and add money to them every month. Is there a fixed amount you have to add in a month or years times.
2007-02-01 03:29:36 · 5 answers · asked by aland411 1 in Business & Finance ➔ Investing
Mutual funds operate as follows: they buy huge quantities of stocks, bonds, or whatever type of investment that they are chartered to buy. Then, individuals such as yourself can buy into these funds and own a slice of the big mutual fund pie. Most funds have a minimum dollar amount to open the account, and after that, most have a minimum dollar amount to deposit (not huge-usually like $100 deposit or something). You can invest money any time you like-monthly, once a year, or never again after you open the account-whatever works for you financially.
The method I would recommend to you is to find a good index fund, then deposit the same amount every month. The fund company can set up an automatic withdrawal from your checking account to accomplish that. The advantage of this is that you truly are "buying low" all of the time: you buy more shares when the share price is down, and less shares when the market is pricey.
Congrats on wanting to start investing! Wish there were more people like you out there!
2007-02-01 03:36:26 · answer #1 · answered by SuzeY 5 · 0⤊ 0⤋
A mutual fund is a portfolio, or collection, of individual securities (some combination of stocks, bonds, or money market instruments) managed according to a specific objective spelled out in the fund's prospectus. A mutual fund allows investors to pool their money, then the fund invests it on their behalf.
Unlike individual stocks, whose value fluctuates minute by minute, mutual funds are priced at the end of each day the market is open, based on what the securities in the portfolio are worth. The price per share, or net asset value (NAV), of a mutual fund is the current market value of the fund's net assets divided by the number of shares outstanding. Investors buy and sell shares in the fund based on its NAV as of the next market close.
2007-02-03 00:05:27 · answer #2 · answered by sathish 1 · 0⤊ 0⤋
mutual funds are funds that are a combination of stocks and bonds depending on the type of the fund. there's a minimum amount to purchase and the amount varies depending on who you buy it from. Vanguard or Fidelity are good to buy from.
you don't have to keep adding money or fix amount to add after the initial purchase if yo don't want to. however, you can set up recurring purchases for every week, month or year if you want to.
2007-02-01 11:37:57 · answer #3 · answered by jean 4 · 0⤊ 0⤋
Different fund have different structures, but one thing is the same. They all have minimal risk, but low returns because of poor performing stocks that drag it down. Better option is to invest in individual stocks, doing reserach, or using a site like this one
www.economicinvest.com
it identifies value investments, and gives some advice in its newsletter. Take a look!
2007-02-01 12:16:10 · answer #4 · answered by redfearn_jc 2 · 0⤊ 0⤋
mutual fund companies are run by sound financial managers..
they buy and sell shares...
but with other peoples money...ie..your mutual fund money..
and give you units for the same....
there r open ended and closed ended funds....
the one u've mentioned....adding money every month..
is SIP....systematic investment plan...
the amount you can fix..
2007-02-02 08:20:33 · answer #5 · answered by antoants 1 · 0⤊ 0⤋