This chapter covered the essentials of mutual funds. How should you, as an investor or investment manager, put this information to work?

      The first thing to do is to start looking at mutual fund prospectuses. These are written to be accessible to novice investors (or, at least, they are supposed to be written that way). The best way to begin exploring is to visit Web sites. Almost any large mutual fund company will have extensive online information available. Links to some of the better known families are available at our Web page. It is important to look at different funds within a given family and also to look across families. Compare growth funds to growth funds, for example. This adventure will give you some of the real-life background you need to select the types of funds most suitable for you or someone else.

      Once you have examined prospectuses on different funds, it's time to invest. Beginning with your simulated account, pick a few funds, invest, and observe the outcomes. Open-end mutual funds are probably the place most of you will begin investing real dollars. An initial purchase can be made with a relatively small amount, perhaps $500, and subsequent purchases can be made in amounts of as little as $100 or less.

      Most important of all, as we discussed to start the chapter, most employers now provide employees with retirement plans. The way these work is that, typically, your employer will make a contribution to a mutual fund you select (often from a fairly limited set). Your employer may even match, or more than match, a contribution you make. Such plans may be the only retirement benefit offered, but they can be an extraordinary opportunity for those who take full advantage of them by getting the largest possible match and then investing in a suitable fund. It's an important choice, so the more knowledge you have regarding mutual funds, the better your outcome is likely to be. www.mhhe.com/jm4e