The Basics of Mutual Funds 

You’ve probably heard the term “Mutual Fund” before.  Maybe it was in passing at work or around the dinner table with your in-laws, but there was never any real clarity around what they actually are, so you never looked into them. You’re not alone. A little over a year ago less than half of U.S households owned some kind of mutual fund. Understanding what a mutual fund is, paints a clearer picture of why it can be an asset for your financial goals and opens the door to new investment opportunities like ESG Funds! We’ve done our best to present you with the mutual fund basics so you can decide whether or not you’d like to join our bandwagon.


What is a mutual fund?

Mutual funds have a complex name, but they aren’t as overwhelming as they sound. Essentially, a mutual fund is a collective investment that pools money from multiple investors. That money is then used to purchase a variety of securities like stocks or bonds. By joining a mutual fund you’re purchasing a share of those collective investments. 


Why are mutual funds used for?

People join mutual funds for a variety of reasons, and sometimes new investors don’t even have a good understanding of what they are before joining! Here are some of our favorite reasons from TD Ameritrade for joining a mutual fund.

  • They allow you to create a diversified investment.
  • They are managed by a financial professional.
  • They allow investors to participate in a wide variety of investments.


How do I get started? 

The simplest way to start investing in a mutual fund is to find a financial advisor or investment management company that you trust. Knowing who you should choose to manage your mutual fund shares depends on your personal values and goals. Here are a few things to consider.


  • Do you value human relationships?  Some management companies are completely online and primarily interact with their clients using artificial intelligence (ai) software. However, these Robo Advisor companies don’t allow you much control over what kinds of funds are available to you. The other option is to opt for a company that handles their business face-to-face and is interested in getting to know you and your goals.


  • Do you want to know your investment is contributing to positive change? You can join any mutual fund available to you, but there are some that are more ethically sound than others. Knowing that your money is going towards a noble cause like environmental protections, human rights & diversity, or global peace efforts is an added bonus to your investment. Besides, no one wants to admit their booming investment is actually at the hands of companies with poor morals. 


  • How much do you want to contribute to the start of your investment? If you’re about to invest in your first mutual fund you’ll need to determine how much money you want to contribute to open your account. Some management companies have investment minimums, and won’t take clients who can’t afford to meet that amount. Other companies, like us, opt to have no investment minimum in order to get as manypeople on the right financial path as possible.


Connect with us if…

If you want a management company that operates face to face, ensures your investments align with your values, and has no investment minimum, we think we’d be a great match for you! 

We’re eager to get to know you and learn what goals you’re working towards and apply our services accordingly. To learn more about what we do, where we come from, and how we can help, visit our website and connect with us today!