Investment Decisions

How Investors Make Decisions

An educated investor makes the best investment decisions, but there is a lot to know and making informed investment decisions can be a time-consuming and complicated process. You can visit financial websites, read financial self-help books, newspapers and magazines, research investment companies…and work hard to keep up with current economic news and market analysis. Or, you can seek help from professionals whose job it is to do all of that for you. The type of investor you want to be will determine how you go about designing your financial future.

What Type of Investor Are You?

The Self-Directed Investor

The Self-Directed Investor makes their own investment decisions and doesn’t mind handling all of the research, transactions and recordkeeping. This investor is willing to put in the time and effort necessary to learn about investing, keep up with financial and economic trends, outline their goals, research options and make educated choices all on their own. The do-it-yourselfer works on their own to direct, select, track and monitor their investments, using support tools and resources to become their own expert. This approach works well for those whose portfolios are simple, and easily managed.


The Assisted Investor

The Assisted Investor may lack the time, desire, or confidence to handle their investments on their own, but still wants to retain control and hands-on involvement. This investor is willing to pay a fee to get the help and guidance that comes through consulting with a financial professional for goal development, recommendations and investment advice.


The Delegator

The Delegator is an investor who wants and needs to turn over their financial planning and investment program to a professional financial advisor who will assess their needs and goals and structure an investment plan to meet those. The delegator wants someone to handle all details and make the investments for them, monitor the markets and adjust their investments as conditions warrant and goals change. Investors who take this approach often pay a percentage of their portfolio value for these comprehensive services.

Where to Purchase Mutual Funds

Once you determine the type of investor you are and how much you are willing to spend in either time or money to build your investment portfolio, you can decide the best approach for you…and the best way to make your investment purchases.


From a Fund Company

You can purchase mutual funds directly from a mutual fund company, often with low or no sales charges. Fund companies offer a variety of funds to choose from and many convenient services that allow for online transactions, account services, and options for guidance and assistance in building your portfolio.

Fund Companies


Online

You can purchase mutual funds online through one of several mutual fund online companies, sometimes called “fund supermarkets” or discount brokerage firms. These companies offer mutual funds and investment products of many different fund companies, offering consolidated accounts and purchases often at lower commission fees, no transaction fees, plus tools and resources available in easy to use sites.

Online Brokerage Firms and Mutual Fund Supermarkets


From a Financial Advisor

You can purchase mutual funds and other investments from a financial advisor or financial planner who is registered to sell securities. While there are fees associated with the services of professional advisors, the benefit of comprehensive goal analysis, investment planning and selection, and related support is well worth the price for many investors.

Certified Financial Planners and Investment Advisors


Through A Retirement Plan

One of the easiest ways to invest in mutual funds is through the retirement plan where you work. If your company offers such a plan, you will be presented with investment options to help you reach your goals, usually many different types of mutual funds are offered.

Employer-Sponsored Retirement Plans