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Research your current mutual fund holdings, if any. Key things to note are exactly which mutual funds you own, including share class, how many shares of each are owned, and whether or not those shares are held "at fund" or with a brokerage. Mutual funds that were purchased directly from the mutual fund company are known as "at fund." This type of account can only trade mutual funds that are managed by that specific mutual fund company.
Investigate trading costs or loads for selling currently held mutual funds. Certain types of mutual funds must be owned for a specific period of time before they can be sold without penalty. While back-load mutual funds (typically B shares) are the most common type, other funds may also require a minimum holding period. For example, many C share mutual funds must be held for a minimum of 12 months.
Research potential mutual funds to purchase. Morningstar, for example, provides third-party research and information on most mutual funds. In addition, the
company that manages the mutual fund can provide detailed information either on its website or via a prospectus. Some brokerages or financial advisors also provide research or recommendations regarding potential mutual fund purchases.
Verify that adequate funds are in the account. Deposit additional monies or sell existing positions if necessary.
Enter the trade order. Unlike stocks and other securities, mutual funds do not trade on an open market. Rather, they trade after the market has closed and the price of the mutual fund's shares have been calculated based upon the value of the underlying securities held in the fund. Therefore, there is no need to designate an order as a market order or any other type of order. Either fill in the online form to buy or sell mutual funds, or contact the broker any time during the day. All orders entered prior to market close will be executed at the same time on the same day. Orders entered after market close will be executed following the market close on the next trading day.