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Since all Standard & Poors 500 ("S & P 500") Index Funds invest in the same 500 stocks, your average annual return will not deviate much from fund to fund. So you can let out a sigh of relief, because most of your work has already been done for you. (I told you investing can be fun and easy!) As long as you go with a stable reputable mutual fund family, you can practically go with any S & P 500 Index Fund and be assured a solid annual return over the next ten plus years.
There are many solid reputable mutual families to choose from. At the bottom of this article is a list of some of the more popular mutual fund families and their phone numbers. Although there are truly no significant differences between the large mutual fund families, in selecting a fund family you may want to consider the number of other types of funds available in the same family and their annual operating expense ratio.
If you are planning to invest in other types of funds in the future, you may want to consider a family of funds that offers a wide variety of different funds like international funds, bond funds, or specialty funds like technology and healthcare. Concentrating your funds into one mutual fund family can cut back on some paperwork (MsFiscallyFit says, "The less the better when it comes to paperwork"). If you open an account directly with the mutual fund rather than through your broker, you will receive a separate statement for each different mutual fund. But if you have several funds under one mutual fund family, you will probably receive one consolidated statement for all your funds. Also, you can easily switch funds from time to time and possibly avoid any purchase or sales costs associated with switching. Another benefit is that being invested in a certain fund family can sometimes open the door to funds that are closed to new investors. Occasionally, when a fund gets too popular, the fund manager ends up with too much money to invest (MsFiscallyFit wishes she had that problem). This becomes a situation when there are not enough good stocks to invest in. Because the mutual fund manager wants to control the flow of money, they may close the fund to new investors. However, sometimes if you own another different fund in that same family, you can gain access into that closed fund. A lot of times the reason the fund closed was because it was doing very well and many people wanted to get in. Since FiscallyFitters want the highest and best return on their money, we want access to the best funds. Lastly, many times a mutual fund family maintains similar philosophies in investing across all their funds like low operating expenses, low initial minimum purchases and special features like retirement funds and automatic reinvestment programs and MsFiscallyFit believes that the more comfortable and familiar you become with a mutual fund and its style, the more you are apt to invest…and this is a good thing, because we want you to be rich.
Mutual Fund Families:
Vanguard Funds (800) 851-4999
Vanguard Index Funds (800) 662-7447
Strong Funds (800) 368-1030
Paine Webber (800) 647-1568
Morgan Stanley Dean Witter (800) 869-6397
Fidelity Investments (800) 544-8888
Merrill Lynch (800) 637-3863
Back To Part 1 - Getting Started in Mutual Funds
Go To Part 3 Researching Made Easy
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