Ask the Fool

Funds Have Soft and Hard Closes

Q: If my brokerage says it can’t invest me in a particular mutual fund, am I out of luck? — T. H., Minneapolis

A: Not necessarily. Many brokerages let you invest in mutual funds, but they vary widely in the number of funds available and which funds they offer.

A brokerage may not offer a fund you want, or it may not be able to get you into it if the fund is closed to new investors. Funds will sometimes close if they have more money than the managers feel they can invest effectively.

(That’s a good thing. Other funds just keep taking money, even if they have to park much of it in less promising investments.)

Some funds will just do a “soft close,” though. That means they won’t accept new shareholders coming in from third parties such as brokerages, but they will let you invest directly through them, such as via their website. You can invest in most open funds directly, via the fund company itself.

It can be a little more convenient through your brokerage sometimes, as you’ll be able to move money between funds and fund companies more easily — though there will likely be a commission fee charged.

Q: When a stock is reported as having risen or fallen a certain amount, from what price is it up or down? — W. R., Spartanburg, S. C.

A: When you hear that shares of Help Depot (ticker: RUOK) are down 3 ½, that means they’re off $3 ½ from where the stock traded at the end of the last trading session. So if RUOK closed at $75 per share yesterday and it’s trading around $71 ½ right now, it’s down 3 ½. Got a question for the Fool? Send it in — see Write to Us

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2012-10-18 digital edition

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