How do you invest in mutual funds?

Do you buy shares in a fund like you would a single companies stock?

There are two different types of mutual funds--exchange traded funds which you do buy like company stock and open ended mutual funds which are purchased at net asset value at the end of trading when the market closes. The open ended funds can be purchased directly from the mutual fund company or through some brokers. There is normally a minimum investment amout for the open ended funds, commonly about $2000 but it does vary from company to company and fund to fund. The exchange traded funds normally have a minimum of one share and that share price is dictated by market forces. Some exchange traded funds trade at substantial discounts to net assets, sometimes as much as 30%.

Here is a link to a couple of open ended fund sites.

T Rowe Price
http://mutualfunds.troweprice.com/?rfpgi...

Fidelity
http://personal.fidelity.com/products/fu...

There are many more

Here is a link to a site that lists exchange traded funds

http://www.etfconnect.com/

Yes, you buy shares of the fund.
The fund manager uses the money you and all the other fund members contribute to buy shares of stocks of companies.

http://www.firstinvestors.com/

One of many who offer Mutual Funds..

Exactly. Basically you buy shares of whatever fund you choose to invest in. You choose your objective and a fund that matches yours (growth, current income, safety, commodities, real estate, etc.) You're basically investing in 200-500 stocks at once, which brings instant diversification, asset allocation, and professional manangement, not to mention low fees. Some solid, low cost companies are T. Rowe Price, Vanguard, and Fidelity. Always read the prospectus that states risk, fees, objectives, fund name, manager (also how much experience they have which is very important). Long term investors stick with mutual funds, not individual stocks because they tend to get traded too often, resulting in current income taxes instead of the reduced dividend and capital gains tax of 15% (lower if you're income tax bracket is lower than 15%.) Look for index funds or growth stock mutual funds because they tend to have low turnover, meaning they are traded less often resulting in little to no tax until you sell your shares, by which then they could be eligible for the long term capital gains tax as mentioned above.