How to invest mutual funds?

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15th Nov 2009 by Joseph Pousada

There are many factors to think about when investing in mutual funds and you should consult your financial advisor. The two main types of investment companies invested in are open-end mutual funds and closed end mutual funds. Open end mutual funds are investment companies where if you want to invest they will issue you new shares based on the next closing price per share. Typically you can purchase these shares through your brokerage account or many times directly with the investment company. If you are purchasing these shares in a brokerage account, these shares will not be eligible for margin until after 30 days as they are considered new issues of shares. Open end mutual funds usually price at least one time per day when the markets are open. (US brokerage accounts.) The price per share is based on the underlying assets in the investment company. If you wish to redeem, the transaction will also be made at the next closing price. You may also decide to purchase a closed end mutual fund with your advisor. These are investment companies who issued a fixed amount of shares and will trade independently in the secondary market. These shares can be bought or sold at a discount or premium to their underlying assets so it is important to have your advisor do detailed research.

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3rd Nov 2009 In Mutual Funds 1 Answers | 504 Views
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