Cooper Company Management Guide To Buying Mutual Funds – Everything You Need To Know

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Mutual funds are popular investment vehicles as they are diverse in nature, leading to a more balanced financial portfolio. Investment companies sell stocks of the fund and invest the proceeds in different assets under the supervision of a professional money manager.
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Where to Buy Mutual Funds
Mutual funds are available for purchase from registered advisers at
• Credit unions/caisses populaires
• Banks/trust companies
• Brokerage firms
• Mutual fund ...
... dealers
• Mutual fund companies
• Life insurance brokers and agents
Life insurance and mutual fund companies usually sell only their own funds, while dealers and banks offer a range of different products.
How to Buy Mutual Funds
There are some crucial steps when buying mutual funds. First, work with an adviser to come up with a financial plan and identify how much can be invested in mutual funds. Investigate several mutual fund options that fall within the amount available for investment. Consider:
• the amount needed to buy into the fund
• the desired length of time to invest
• associated fees (see below)
• current and past fund performance, rather than future projections
• the kinds of investments held within the fund: stocks, bonds, etc., and the level of risk involved
When the application form is completed, be sure to keep a copy for future reference. Keep track of the mail for a prospectus that provides information about the company managing the fund. Read carefully and save all the mutual fund statements and ask for clarifications if needed.

Buying Mutual Funds: No Load Funds vs. Front Load or Back End
Fees regarding mutual fund investments confuse many investors who are still inexperienced. Other mutual funds require an upfront payment to buy into the fund (though this has become more and more unpopular).
Most companies today use a back end load fee, or contingent deferred sales load (CDSL) fee so when the investor needs to sell the fund, a penalty applies depending on the length of ownership.
Some still provide no load funds. Do not confuse no load funds with no fees because all mutual funds have a fee (called the Management Expense Ratio) to cover for the mutual fund manager’s salary, administrative expenses, legal fees and other incidental costs.

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Cooper Company Management is an independent investment advisory firm that focuses on global equities and options markets. Our screening strategies, analytical tools, rigorous research process and committed staff offer solid information to assist our clients in making the best possible investment decisions. All views, comments, statements and opinions are of the authors.