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How to invest in a mutual fund on...?
I am 20, I really want to get into investing in the mutual fund world early to maximize my investment gains over time. Most mutual funds I have looked in to require $2,500 or $3,000 as an initial investment. That is a large lump sum for a college student who wants to invest maybe $100 per month. Is there a plan or something available where I don't have to pay this all at once but rather over time? Other than just saving up the money for several months to dump into a fund all at once, are there any options when it comes to starting out investing in a mutual fund?
- ?Lv 67 years agoFavorite Answer
Call these mutual funds and ask them your questions. They are some of Kiplinger's favorites. You know you can find their phone numbers online. They are "no-Load" funds. You pay no commissions. They invest in large companies. They are pretty safe safer than most. The right way to invest is "$X" per month, so you're on the right track. It gives you the benefit of Dollar Cost Averaging. I like Vanguard and Dodge & Cox.
Dodge & Cox Stock
Mairs & Power Growth
Vanguard Dividend Growth
- ?Lv 77 years ago
You can buy an ETF like the Spyders, ticker symbol SPY, and probably be more diversified with less cost than a mutual fund. It trades just like a stock in a standard account and you can buy one for $180 or as many as you want. It tracks the S&P 500 Index.
Most mutual funds can't beat the index they follow. They are always in the market, so you are traversing the ups and downs and volatility of the market at all times, just like the SPY. Why pay them to do something you can do yourself?
With just a little knowledge, you can limit your risk with the SPY by using stops and managing position size. You can even go short and bet on the downside, or get out when risk is high, like now. You can't do any of these things with a mutual fund.
How much money you make from a mutual fund depends on two factors:
The fund manager's ability to pick good investments
The various fees you pay when you buy or sell a fund
Are you going to research a good fund manager, in addition to performance ratings? Really? When everything will change next year? Or are you going to put that time into figuring out what the market is doing or which stock to buy and learning about finance, the markets, ways to manage risk, good trading strategy, etc.? Reading a few good books really can be rewarding.
Leaving your investments to chance, or the Hope in Buy & Hope, isn't really a plan. That requires you to be in charge of your investments.
Mutual Funds Vs. ETFs: A Comparison