Going It Alone with Mutual Funds: Getting Started

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Going It Alone with Mutual Funds: Getting Started

Those with the time and interest to learn about investing and to monitor their own portfolios can invest in funds without the help of an advisor. If you choose to invest on your own, you might focus on no-load funds, which do not charge any sales commissions. Some justify this by asking, why pay a commission if you're not getting any investment advice in return?

Where you can buy them

Go-it-alone types can buy funds directly from no-load fund groups (also called fund families) such as Fidelity, Vanguard, and T. Rowe Price. To buy a fund from a fund family, request an application from the fund group by going to its Website. You can also invest in many funds through popular online brokerage sites.

Consider a large fund family

New investors who plan to buy more than one fund might choose one of the larger no-load families. Why? Because these families are diversified: they offer stock and bond funds, domestic and international funds, and large- and small-company funds. Most fund investors eventually own more than one fund because of the need for diversification; by investing with one of the major fund families, you can easily transfer assets from one fund to another.

Investing with a single fund family—even a large one—can be limiting, though. For example, some families don't offer a wide array of funds: they may specialize in one type of investment objective while offering few other types of funds.

Or consider several families

Another way to diversify, then, is to invest with several fund families, a series of specialists who do one thing particularly well. You could buy a large-company growth fund from one family, a small-company fund from another, a bond fund from yet another, and an international fund from still another. But that would mean a lot of paperwork; each family would send you separate account and tax statements. If you own more than a few funds, the paperwork can become maddening.