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Invest in mutual funds simple!

Updated on August 14, 2015

Start investing in mutual funds

I have had a number of requests from people asking me how to start investing in the stock market in a simple way. Most of these individuals want a simple explanation to begin investing without all of the vagaries you see in most articles and hear from financial experts. This article is will explain just how to start investing in a prudent manner if you are beginning investor.

I do own these funds and have been very happy with the performance. These funds are by no means the only funds I own but are very high quality investments which are simple and cost effective to own. I am not getting any compensation from either fund company.

Grow your money

This fund has done well for over a decade!
This fund has done well for over a decade!

If you just want to start investing read on.

Contact Royce Mutual Funds or Hodges Capital Mutual Funds and set up an account. My first choice would be to do this inside a Roth IRA since you are probably not investing at this time. Inside an IRA you do not have to worry about capital gains. You do not have to pay tax or penalty on anything but the gains when you wish to withdraw the money (assuming you are under 59 and one half when you take it out). If you choose you can very easily set this account up outside an IRA.  You can do this online or over the phone. My experience has been they have been very happy to help. When dealing with Royce be sure to set up E-delivery of prospectus and reports otherwise they will charge you 12 dollars a year for your account (custodial fees).

In my opinion this is the simplest way to get started investing in the United States stock market.

Invest in the Royce Low Price Stock Fund symbol RYLPX. I have owned this fund for years and I am glad I did. The Fund manager Whitney George has been with Royce for nearly twenty years and has done an outstanding job year in and year out.

The alternative to the Royce fund mentioned above is the Hodges Fund symbol HDPMX. With the small sum of 250 dollars you can open an account with Hodges. This fund has a solid performance record. With a $250 dollar minimum you really do not have a lot of excuses not to invest.

Make regular contributions to your account. This technique is called dollar cost averaging.

Take some time to learn about investing. The more you learn the more you can earn. This should not be the only fund you should ever own. As your money grows you will need to diversify.

Good asset allocation and solid mutual fund selection are the keys to great returns on your investment. By choosing your investments wisely you can significantly increase your returns.

As you get comfortable with investing and accrue more money you will want to invest in other methods and diversify. Taking the first step is often the hardest. I was afraid of mutual funds for years. Investing this way is very easy.

Too often we are taught in school to purchase stocks. Stock picking is risky and hard for even the professionals to do it well. We are never taught how to invest in no load mutual funds in school. Investing in good no load mutual funds will lead you to financial security.

As you learn and diversify, invest in the very best mutual funds, Small cap funds, International funds, Bond funds and even concentrated funds.

Did you enjoy this article? I hope so. Please feel free to visit some of my other investment articles on hubpages.


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