How do I start investing in mutual funds?

[Tiffany V]

i am 22 and in college freshman have two children friends tell me that this is the best way to save and gain interest at high level i can afford to put away an average of 400 to 500 every month i already have a bank just tell me how do i start and what questions may be good to ask when talking to someone about mutual funds or tell me what other methods i can use to save money for family future (college,house,better car, ect.)

[Tim J]

Great idea! No matter how much or how little you invest at good to start while you are young. The compounding effect of your investment income will provide a good growth over the years.Try any of the web sites of the larger mutual funds (www.fidelity.com as an example but there are others)Good luck

[SMEAC]

Mutual Funds carry a substantial amount of risk.Their track record has been good because the market has gone up for several years in a row.Remember the law of gravity applies to the stock market, and when it does mutual fund holders weep the loudest because they were told that it was a safe investment.The markets are a gambling casino,never risk more money than you can afford to loose.

[vegas_iwish]

1st - forget interest. That is for losers sitting in a bank where you lose guranteed vs taxes and inflation. No interest in stock mutual funds - high or otherwise. You are young and need growth. No need for questions or delay - need to act. Open acct @ schwab.com where you can get some MFs but also better things like etfs & closed end funds. ADX PEO EWA Diversify. Don't start an acct with 1 fund company (schwab handles many) or buy just 1 fund. Key is to start now. Feel free to contact via answers for more info.

[Sang Suci]

You have a bank. That's good. Ask them. Usually mutual funds sell the products through banks as well. Tell them what you want (speculation, regular income, mixed, etc) and they should be able to provide you with tens of choices. Ask them the commission they get. Make sure what they offer you matches your expectations and not theirs.

[fixingupcredit]

Open a brokerage account at Zecco and invest in the Vice Fund (NASDAQ:VICEX)

[husseycr]

Hi. You should consider establishing three different accounts. First, a short term "emergency" fund that you can access for (guess what?) emergencies. This is for true emergencies (lost job, illness, etc.) not foreseeable expenses like car maintenance, insurance, etc., which you should budget for separately. Most advisers recommend 3-6 month's income saved in this first account. For now, most would recommend 25% of your available monthly should go to this account until you reach that 3-6 month saved amount, then roll this 25% of your monthly to the next category. This money should go to a short term type "investment" like a money market account; you can find several that pay about 5%.Second, concurrently set up a longer term account to save for purchases you know you'll be making in the 3-10 year time frame (car/grad school, vacations, etc.) You want to consider lower "risk" mutual funds for this account, since you will have a bit more time to allow for, but still benefit from, market fluctuations. You should be able to get 6-9% earnings in this type of investment. You should put 25% of your available funds into this account until you have it where you want it. Once that account is at the level you want it then excess money from this (and the pourover from first account) should all go to the longer term investment. Third, you want to establish a long term, no touch account, for retirement. 50% of your funds go here, to be later supplemented from the pourovers of the first two accounts when they are properly funded. These investments should go to a good, diversified mutual fund that invests in "equity" (stock) in various companies. There's a huge list of them, and sorting through them can be a real headache. The online services are good, but in my experience a bit cumbersome to use. I like to find Money or a similar magazine that has summarized the various funds, and review those results. You are looking for long term results of the fund, how long the fund managers have been in the game, and what the expenses are. You should be able to find something that will yield 12% or more over the long run. These funds should also be in a tax-advantaged account (Roth IRA is probably best. In essence you make your investments with after-tax money, but all the earnings thereafter grow tax free). You should NOT ask the bank for these recommendations; a bank is not the place for long term investments and they'll always try to sell you their stuff first. (As an aside, NEVER invest money in an insurance policy. DON'T buy whole life, variable life, variable universal life. They are hugely expensive, and with surrender fees, etc., the investment returns are horrible. Plus, with few exceptions, you lose your savings if you die!!). Congratulations on doing so well at such a young age. FYI, $450/month from age 22 to age 65, invested at 12%, will be worth $7.6 million.