How to Buy Mutual Fund Shares: A Beginner's Guide

The process of buying mutual fund shares is something that many investors go through at some point. Here are the basics of buying mutual fund shares and how the process works.

Buying Shares

In order to buy shares in a mutual fund, you will need to open an investment account with a financial broker. When you choose a particular mutual fund to buy, you will be able to tell your broker how many shares you would like to purchase. If you are doing this online, you will be able to specify the number of shares with your trading platform. At the end of the trading day, the mutual fund's net asset value will be calculated. This is the price that you will pay for the shares and you will be given them shortly after 4:00 PM ET. 

Restrictions

Some mutual funds will have a minimum investment that must be made, for example $500.

Before Purchasing

Before purchasing a mutual fund, you should familiarize yourself with important information about it. You need to look at the annual returns of the fund as well as the investment strategy that it uses to achieve these results. You will also want to check out the expense ratio as this will eat into the returns that are generated.