HOW TO BUY AND SELL MUTUAL FUNDS?

Thinking about investing but not sure how to buy mutual funds? The selection process is actually easier than you think. Learn how and where to buy mutual funds

Now that we’ve covered both the advantages and disadvantages of mutual funds – let’s talk about how to buy and sell them.

Where to Buy Mutual Funds

There are a number of options to choose from when deciding where to buy mutual funds:

• Your employer-sponsored plan
• The fund company directly (Vanguard, T. Rowe Price, etc.)
• A “supermarket”, where funds from many different providers are offered
• A human broker/financial planner (watch out for extra fees!)

Tips for How to Buy Mutual funds

1. Identify goals and risk tolerance before. An investor should identify his or her goals before acquiring shares in any fund. Risk tolerance and time horizon should also be assessed – the investment should not be keeping the investor up at night.
2. Consider style and fund type. This will largely depend on the investor’s goals and time horizon. If he or she is comfortable with volatility and is in it for the long haul, he or she would be suited for a long-term appreciation fund. These typically hold a high percentage in common stocks, giving them both a higher risk and a larger reward. If the investor’s looking for current income, they’d surely go with an income fund – whereby government and corporate debt are the most common holdings.
3. Be aware of charges/fees. Mutual funds make their money by charging fees to the investor. Some will charge a load fee, which is a sales fee that will either be charged upon the initial investment or upon the sale of the investment. The load will either be a front-end load, where the fee is paid out of the initial investment made by the investor, or it’ll be a back-end load, where the fee is charged when an investor sells his or her investment. Both will typically charge 3% to 6% of the total amount invested, but they can actually charge as high as 8.5%.
4. Evaluate managers and past results. With that being said, do keep in mind that past performance is by no means a guarantee of future results.

How to Sell Mutual Funds

It’s important to know when and how to sell a mutual fund. Here are the proper steps to doing so:

1. Contact financial advisor (or mutual fund company)
2. Inquire about fees/charges
3. Figure out how many shares you wish to sell
4. Provide instructions on what to do with the money

Now that you know the steps to take to sell them, the big question becomes when to sell them!

When to Sell Mutual Funds

Cashing in and investing your money elsewhere can be tempting when your mutual fund is yielding a lower return than anticipated. There are both pros and cons to the redemption of your mutual fund shares.

Important Reminder!

The Motley Fool Stock Advisor ranks as our #1 Best Investment Newsletter for the third year in a row.

Their stock recommendations continue to beat all of the other newsletters that we follow and they maintain a very high accuracy of their picks. Their 24 stock picks from 2018 have outperformed the market by an average of 44% as of October 12, 2019. Read that again. I didn’t say their stock picks are up an average of 44%, I said they have BEAT THE MARKET by 44%.

No other newsletter comes close to that. You may have seen the Motley Fool’ advertisements that their picks are up 367% compared to the market’s 80%. Is The Motley Fool’s Stock Advisor really as good as they claim?

Our results, at least since January 2016, suggest YES. You can now get their next stock picks in real-time for ONLY $19. You will also receive their list of the TOP 10 Stocks to Buy Right Now.  This special pricing is for NEW customers only and you must click on this link to get the special price..

Get the Motley Fool's Next Stock Picks for $19

P.S. this offer is still backed by their 30-day money back guarantee