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How to Invest in Mutual Funds by Gerry Wollert

Mutual Funds are probably the best way to invest in the stock market. For both the novice and experienced investor, Mutual Funds and Exchange Traded Funds (ETFs) are probably the best investment vehicles to invest in the stock market.

What are Mutual Funds?

A mutual fund is a company that pools money from many investors and invests the money in stocks, bonds, short-term money-market stocks, or some combination of these investments. The portfolio is the combined mutual fund holdings. Each share represents an investor's proportionate ownership of the fund's holdings and the income those holdings generate.

There are many reasons that make mutual funds investing so attractive:

Diversification: Mutual Funds and Exchange Traded Funds hold a portfolio of anywhere from 20 to 200 individual stocks. The multiplicity of holdings shields the entire portfolio from plummeting when bad news hits one particular stock.

Professional Management: Mutual Fund companies employ highly experienced professional managers to manage their individual mutual funds. These managers get to know all of the companies in their portfolio. They have tremendous computer and support resources at their disposal. Few individual investors have that level of sophistication.

Economies of Scale: Mutual funds are able to take advantage of their economies of scale to reduce the transaction costs associated with buying and selling. This translates to a savings for those investors involved in mutual funds investing.

Divisibility: Someone who only as $1,000 to $5,000 to invest cannot begin to purchase a sufficient number of individual stocks to get sufficient diversification. With No-Load Mutual Funds, there are no commissions to pay and an investor can get started investing with as little as $1,000.

How to get started: Investors can invest in a mutual fund directly with the Mutual Fund Family. However, it is far better to purchase mutual funds from a discount brokerage firm that handles many different families of mutual funds. (T.D. Ameritrade, Charles Schwab, and Scottrade, are three good alternatives.) This enables the investor to trade or upgrade their mutual fund holdings between various mutual fund families by placing the order with their discount broker. Mutual Fund or ETF Trading can be done online with a very user-friendly trading platform.

Rebound Mutual Fund Trader: This is a robust trading system that consistently outperforms the S&P 500. In fact, subscribers to this mutual fund trading system recently doubled their money in just 32 months. When fully invested, the Rebound Mutual Fund Trader holds 7 No-Load Mutual Funds or Exchange Traded Funds. The average holding time is currently running about 97 days. This system only trades about twice per month and takes less than 30 minutes per month to perform the mutual funds trading. This mutual fund trading system is currently generating an annualized rate of return nearly triple that of the broader market indices. To get started on your way to doubling your money in the next 3 years by investing in Mutual Funds.

To learn more about Investing in Mutual Funds visit:

Gerry Wollert is a graduate of Purdue University.