| Do it yourself with no-load mutual funds and save | | | | the end of the trading day on Tuesday the fund's |
| thousands. Here's how it works. | | | | net assets (the net value of the fund's |
| To make things real simple, think of joining an | | | | investment assets) were $1 billion, and there were |
| investment club where professionals make the | | | | 100 million shares held by investors. That makes |
| investment decisions for you and deal with all of | | | | each share worth $10. |
| the hassles and other details of running the fund. | | | | When investors add money net assets go up, and |
| There is a minimum investment requirement of | | | | so do the number of shares. When the |
| maybe $2000 or so, but after that you pretty | | | | investments in the portfolio go up in value or pay |
| much invest what you want and when you want. | | | | interest or dividends the value of the fund and |
| Each fund has its own minimum investment | | | | NAV increase. When investors pull money out the |
| requirements. | | | | assets under management decrease and so do |
| When you want some or all of your money back | | | | the number of shares. If the fund's investments |
| ... no problem, no charge. | | | | go down in value the NAV or share price falls. |
| Here's the traditional way to get started. Call the | | | | Over time your mutual fund is likely to pay |
| fund company toll-free and tell them you would | | | | dividends and/or capital gains. Since most |
| like to get started as a mutual fund investor. For | | | | investors want to keep their money working for |
| example, you might tell them that you are | | | | them, they simply tell the fund (in the application) |
| thinking about opening an IRA and perhaps a joint | | | | to reinvest this income. In other words, buy more |
| account with your spouse. | | | | shares with it. They then handle the details |
| They will send you general info about their funds | | | | automatically as long as you own shares. There is |
| and the appropriate applications to fill out. If you | | | | no charge for this service. |
| have a special interest in stock funds, for | | | | Every mutual fund charges investors for yearly |
| example, let them know. If you have any | | | | expenses, including no-load funds. Depending on |
| problems with the paperwork, call them back and | | | | the fund, these expenses can cost you more |
| they will walk you through it. | | | | than 2% a year, or less than one-half of 1%. |
| Check out their web site and do some homework | | | | The truth is you won't even know it as you pay |
| before you make any decisions, and start small if | | | | these expenses. The fund company simply takes |
| that makes you more comfortable. Now, here's | | | | this money from the fund's assets to pay for |
| how it works. You send them the required | | | | expenses and to earn a profit. So, a $5000 |
| paperwork with a check. Within a few days you | | | | investment will cost you about $50 a year to own |
| have an account open and are a member of the | | | | if the fund charges 1% a year for expenses. If |
| club. | | | | this $5000 grows to $10,000, it will cost you |
| Let's say that you are investing in a stock fund, | | | | about $100 a year and so on. |
| and they process your application on a Tuesday. | | | | With no-load funds from a major fund family it's |
| You sent them $5000 and at the market close on | | | | that simple ... and that cheap to invest. |
| Tuesday the fund closed at $10 per share. In | | | | There are also mutual funds that you buy through |
| mutual fund language, the net asset value (NAV) | | | | licensed representatives. These funds will have a |
| was $10 a share. You now own 500 shares of a | | | | LOAD (sales charge). Some of these are not so |
| stock mutual fund. | | | | cheap to buy, nor are some of them cheap to |
| How do they figure the NAV? Let's say that at | | | | own. |