How to Learn about Mutual Funds
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How to Learn about Mutual Funds
I'm interested in recommendations/advice regarding mutual funds. I don't
know anything about how they work, where to get them, how much to invest,
etc. Any info. would be much appreciated. Thanks. Dylyn
When I was in your position, I asked the same question of Herb Greenberg,
formerly a writer in the Chronicle Business Section. He recommended
"How to Buy Stocks", by Louis Engel and Henry Hecht. It's a great beginner
guide to the stock market. They strongly endorse the view that first-time
investors start with a mutual fund before investing in the stock of
The book is ISBN: 0316353809 and is in stock at http://www.fatbrain.com
(boycotting Amazon because of their silly patent). The only downside to
the book is that it was last updated (eighth edition) in 1994. Personally,
I still highly recommend it.
I've read a large number of investing books and still think one of the
first ones I ever read
is the best. The title is 'The Only Investment Guide You'll Ever Need' by
The back cover describes the book as "a truly understandable, concise, and
look at the best uses for your money, no matter how much or how little you
accurate description. The author is also very humorous which makes for an
(I definitely can't say that about many of the other investment books I've read
Get more info than you can ever possibly handle online...
many many sites to choose from... you might start at www.morningstar.com...
when you are ready to invest then open an account at www.schwab.com
or www.etrade.com... invest as much as you can as soon as you can and keep
saving...join your 401.k or 403.b at work if you have one and make the
maximum contribution you can (best tax shelter around besides mortgage
deduction for home-owners)... if you have left-over money after your
401.k/403.b contribution, then put $2,000 per year into a Roth IRA...
In terms of choice of funds, it depends largely on your age. If you
are young be aggressive (get into some riskier funds, such as those
with Internet stocks). Added risk but chance for big returns. As you
age you should become increasingly conservative in your choice
of funds/stocks.... try 'socially responsible funds' if you are so inclined...
or just go for maximum returns and then tithe... good luck
Regarding the mutual funds question: Mutual funds can be very user friendly
and they are much less risky that individual stocks. A great way to learn
about mutual funds is to go to any well-lighted bookstore and sit down in
front of the financial planning section. A good start might be "Investing
for Dummies" (I think that's the actual name!). Another way is to read the
business section of the New York Times -- especially on Sunday. Also, I've
always found Kiplinger's (monthly financial magazine) to provide relevant,
reasonable, and objective info on mutual funds (including the how to's).
Most mutual fund companies have informative web sites (Vanguard.com;
Fidelity.com; Janus.com; among others).
One last thought: I would recommend starting with "no load" mutual funds. A
no load fund (e.g. Vanguard, and many others) does not charge a fee to buy
or sell shares in the mutual fund. As a result, if you change your mind
about the investment or want a different fund, you can get out (sell) at no
extra fee. Good luck!
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