In This Chapter
Seeing the advantages — and disadvantages — of mutual funds
Finding mutual funds online that fit your needs
Finding out where to buy and sell mutual funds online
Understanding funds' risk and return
Determining the best ways to buy mutual funds
Online investing isn't just for individual stock pickers. The Internet can also be used to pick, track, and monitor investments in mutual funds — funds that pool money from many investors so that it can then be invested in stocks, bonds, or other assets. By pooling money, mutual funds give small investors some of the benefits enjoyed by larger investors, especially the ability to spread money over many investments, or diversify. Mutual funds are the way most people invest. More than 93 million individual investors, and nearly half the nation's households, own a piece of mutual funds either directly or through a retirement plan like a pension fund. U.S. mutual funds hold more than $10 trillion in investor assets, which they pool together and use to buy stakes in investments.
In this chapter, I explain how online tools can maximize your success investing in mutual funds. I also show you how to use online tools to pick the right investments for you and walk you through the process of setting up an account to buy or sell the funds.