Best Mutual Funds Explained
All you need to know about mutual funds, including the risks, rewards and terms  

Best Mutual Fund

best mutual fundsNow let's look at the mechanics of where and how we can buy mutual funds, and perhaps more importantly the best and worst places to buy. I will try to give you some pointers on what to look out for as many investors have no idea of how the financial services industry works. I hope this site has give you some insight into what to look out for in choosing your mutual fund, ( and I'm going to add some more detail on this on the next page ) but you also need to be aware of how the industry markets it's products to you, and who earns what as a result. As you will see in a minute, buy in the wrong place and it will cost you several percent in commission, which in my view is completely unnecessary.

Best Mutual Fund - Banks

One of the worst places to buy mutual funds for several reasons. First, banks generally only sell load funds so you will be paying commission on the shares. Secondly the people selling these products will be heavily incentivised and on commission themselves, so you will not be getting an unbiased view - it may be harsh but in my view they will sell you what's best for them personally, not for you. The information they provide is generally poor, and their product range will be very limited anyway. Third, they may expect you to lock your funds up for several years. So, the best advice here is don't buy your mutual fund from a bank - the only reason people do is because it's easy! ( enough said!)

Best Mutual Fund - Insurance Companies

Exactly the same advice applies to insurance companies as for banks, and in some ways these are even worse. They have a nasty habit of wrapping a mutual fund up with insurance related products as the salesmen get a double commission for the fund and the product - the most popular product is an annuity.

Best Mutual Fund - Stock Brokers & Financial Advisors

If your are buying from traditional stock brokers or financial advisors again you must be careful. All advisors work on commission to a greater or lesser extent, and they will certainly earn more for promoting load funds, as will stock brokers. The best approach here is to pick their brains for as much information as possible, and then go to the following two sources.

Best Mutual Fund - Discount Stock Brokers

Discount stock brokers tend to be like a mutual fund supermarket, offering a vast array of funds including both load and no load. They generally provide a comparison page so you can look at funds side by side using their screening software. As with other organisations, their staff may try to sell you other products and there may be transaction costs with some brokerage companies, but in general they are a good choice for buying the best mutual funds.

Best Mutual Fund - Mutual Funds Themselves

In my view the best way to buy mutual funds is to buy direct. You will save a considerable amount of commission, somewhere between 5%-6% and in addition there will be no transaction costs. In return for this sacrifice you will have to manage your own paperwork and track the performance yourself - oh dear - I'll leave you to draw your own conclusions, but for me this is the most sensible choice. For a small amount of work on your part, you will be saving a huge amount of money and if you've researched the market correctly, buying the best mutual funds to boot! 

Finally, let's look at one or two more detailed aspects of choosing your fund, and how to pick the best mutual funds for your investing.

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