Beginners' Guide to Mutual Funds

This Pathfinder is no longer being actively maintained by ipl2.

Mutual funds are an increasingly popular investment tool, both for short-term and long-term investors. Mutual fund investing can be a confusing and difficult process, and this pathfinder is designed to assist the beginning investor in understanding and choosing mutual funds.

Internet Sources | Searching for Information at Your Local Library
Professional Associations and Miscellaneous Resources


Internet Sources

General Information

Glossary of Mutual Fund Terminology (Brill's Mutual Funds Interactive)
http://www.fundsinteractive.com/glossary.html
The glossary is excerpted from "The Complete Idiot's Guide to Making Money with Mutual Funds" by Alan Lavine and Gail Liberman. This is an excellent resource for people who are unfamiliar with much of the specialized terminology used in the mutual fund industry, and is arranged alphabetically for ease of use. Each term is defined clearly and succinctly.

The SEC Mutual Fund Cost Calculator
http://www.sec.gov/investor/tools/mfcc/mfcc-int.htm
The SEC (Securities and Exchange Commission) is the governmental body that regulates and polices the U.S. investment industry. This site has an interactive calculator that can be used to calculate the estimated total cost of holding a specific mutual fund for a given length of time.

Invest Wisely: An Introduction to Mutual Funds (SEC)
http://www.sec.gov/investor/pubs/inwsmf.htm
Another helpful section of the SEC's web site. This portion contains narrative text that explains the functioning and valuation of mutual funds. It also links to an email address where consumers can submit questions to the SEC.

How to Read a Mutual Fund Fee Table (Investment Company Institute)
http://www.ici.org/aboutfunds/bro_understanding_mfs.html
The Investment Company Institute (ICI) is the "national association of the American investment company industry". This feature of its web site explains the two different types of fees that can be associated with a mutual fund. It also offers advice on how to research and assess different funds based on these fees.


See Also: Web Directories

Yahoo!: Mutual Funds
http://dir.yahoo.com/Business_and_Economy/Shopping_and_Services/Financial_Services/Investment_Services/Mutual_Funds/

Google: Mutual Funds
http://directory.google.com/Top/Business/Investing/Mutual_Funds/



Types of Mutual Funds

Bond Funds

A Guide to Understanding Mutual Funds: Bond Funds (Investment Company Institute)
http://www.ici.org/aboutfunds/bro_understanding_mfs.html
A basic guide to mutual funds that invest primarily in bonds. Contains introductory information and explanations of the different risks that accompany investment in these funds.

Stock Funds

A Guide to Understanding Mutual Funds: Stock Funds (Investment Company Institute)
http://www.ici.org/aboutfunds/bro_understanding_mfs.html
A basic guide to mutual funds that invest primarily in stocks. Offers a brief explanation of stocks in general and an illustration of stock market volatility during the last thirty years.


Money Market Funds

A Guide to Understanding Mutual Funds: Money Market Funds (Investment Company Institute)
http://www.ici.org/aboutfunds/bro_understanding_mfs.html
A basic guide to money market funds, which are described as mutual funds that invest in short-term securities that yield varying amounts of interest. Gives a good overview of these funds and a discussion of the risks typically associated with investing in money market funds.



Searching for Information at Your Local Library

The following books present more in-depth information and discussions of mutual fund investing.

Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor, John Bogle and Peter Bernstein
(John Wiley &Sons, December 2000; ISBN 0471392286)
An introduction to the mutual fund industry, with behind-the-scenes insight offered by the founder of The Vanguard Group.

Mutual Fund Fact Book, 2001, Investment Company Institute
(Investment Company Institute, to be published May 2001; ISBN 1878731300)
A general publication covering a variety of topics important to the average mutual fund investor. Topics include fees and expenses, regulation, taxes, and retirement considerations.

Mutual Funds for Dummies, Eric Tyson
(Hungry Minds, Inc., April 2001; ISBN 0764553291)
Part of the series of well-known "dummies" guides, this book discusses the mutual fund investment market and process at its most basic level.

Smart Money Moves: Mutual Fund Investing from Scratch, James Lowell
(Penguin USA, January 2000; ISBN 014028849X)
A step-by-step guide to investing in mutual funds; the author takes the beginning investor through the process of building a portfolio.

If you want to read more at your local public library, you'll want to look for materials that are shelved under the following Dewey Decimal classification number:

332.6327 Mutual Funds

If you're searching for more information at a college or university library, you'll want to look for materials that are shelved under the following Library of Congress subject headings:

Mutual funds
Mutual funds - rankings



Professional Associations and Miscellaneous Resources

American Association of Individual Investors (AAII)
http://www.investware.com/aaii.stm
The AAII is a non-profit organization that provides educational materials for its members covering a range of investment-related topics including mutual funds.

Alliance for Investor Education (AIE)
http://www.investoreducation.org/
The AIE is a non-profit corporation that provides education, research and information for investors.


You may also wish to see Business and Economics - Finance - Investments (http://www.ipl.org/ref/RR/static/bus35.35.00.html)

This pathfinder was created by Jennifer Michaelson