How do I start investing in a mutual fund?

There are two or maybe 3 types of mutual funds depending on how you like to split hairs. 1. open end mutual funds which you can buy directly from the mutual fund company. 2. ETFs which can be sub divided into index funds and closed end funds. These are purchased like stocks from a stock broker.

Open end mutual funds can be divided into no load and load mutual funds. No load mutual funds generally have a higher minimum investment amount normally about $2000. Load mutual funds have a sales charge of about 5.75% for the class A shares. Other classes are generally available without a sales charge but with offsetting higher expense ratios.

American Funds offers load mutual funds with a $250 minimum investment. They have some excellent mutual funds.

Both Fidelity and T Rowe Price offer a broad range of no load mutual funds. Many other companies do also.

Index funds are relatively new and offer several advantages over mutual funds. 1. lower expense ratios 2. better tax benefits 3. can be traded any time the markets are open.

Yahoo has a decent although somewhat cluttered mutual fund search tool that can help you to research the various mutual funds. Look for mutual funds with a Morningstar rating of 4 or 5 stars. When you find ones that you may be interested in, go directly to the mutual fund company web site and down load the application form, fill it out and enclose a check for the amount you wish to invest.

If you wish to invest in an index fund, you will need to open an account with a stock brokerage firm. Scottrade and TD Ameritrade are both ok. There are also others you can choose.

Here is a link to a site that has a lot of information on ETFs

http://www.etfconnect.com/

get $500 dollars

go to www.scottrade.com

open an account and pick a fund to invest in-research thoroughly and decide what risk you are willing to take

You can go to your bank or set up a brokerage account online (Schwab, Firstrade, etc...). Some you can set up for as little as $50. Very simple. It's like opening up a bank account.

You find a financial advisor, brokerage firm and even banks are doing mutual funds now. Just watch and make sure they are not going to hit you with an upfront sales charge. Get in touch with Fidelity or T Rowe Price. I think they don't charge those upfront sales charges (usually about 5%).

You want to pick a no-load mutual fund, which means you don't pay a fee or comminision to buy into the fund. There's never really a good reason to buy a loaded fund.

If you're just starting out and don't know what fund to invest in, try using Vanguards "Narrow Your Fund Choices Tool" (link below).

I would try to choose only 5 star morning star rated funds first, then maybe a 4 star.

Investing in Vanguard funds is very easy. Just go to Vanguard.com. You can do it all online but most of thier funds require $3,000 minimum to start. If you don't have or don't want to invest that much to start, there are low minimum funds available through other sources. I've provided a link below.

Are you thinking that you need a lot of money to invest? You don't. Many equity mutual funds, which pool money from small investors and use it to buy stocks, accept initial investments as low as $500 or even $250. More than 140 fund families let you in with $100 or less. Most funds also let you invest as little as $50 or $100 a month. You can also see what it's like to be a stock investor buy purchasing a single share of a company for, say, $30.

If you haven't invested a dime in your life, you're not alone. Millions of Americans don't own any stocks or mutual funds. Some of them have just decided that they don't know enough to invest intelligently. Others think that investing is too scary and worry about the possibility that they'll lose money. Still others think that investing in stocks and mutual funds is no different from playing the craps tables. The truth is, it isn't hard to learn how to invest, putting money into stocks or stock funds isn't scary, and by investing defensively, you can protect yourself from losing money. As for the craps analogy, it's flat wrong. Winning at dice means having good luck. Winning as an investor means using your brains.

Open a brokerage account at Zecco.

I suggest the Vice Fund (NASDAQ:VICEX)