How to Invest in Mutual Funds

By Matthew Frankel, CFP – Updated Sep 2, 2025 at 5:24 PM | Fact-checked by Robin Hartill, CFP

Key Points

Passive mutual funds aim to mirror a benchmark like the S&P 500, often outperforming active funds.
Mutual funds that are passively managed generally cost less than actively managed ones.
Most mutual funds invest primarily in either stocks or bonds.

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A flowchart showing the 6 steps to investing in mutual funds, from determining expense ratios to opening a brokerage account. — Image source: The Motley Fool.

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The bottom line

The bottom line is that mutual funds can be a great means of investing for the long term without worrying about selecting individual stocks and bonds. By understanding the basic concepts discussed here, you'll be equipped to construct a rock-solid mutual fund portfolio of your own.

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About the Author

Matt Frankel, CFP, is a contributing Motley Fool stock market analyst and personal finance expert covering financial stocks, REITs, SPACs, and personal finance. Prior to The Motley Fool, Matt taught high school and college mathematics. He holds a bachelor’s degree in physics from the University of South Carolina, a master’s degree in mathematics from Nova Southeastern University, and a graduate certificate in financial planning from Florida State University. He won a SABEW award for coverage of the 2017 Tax Cuts and Jobs Act. He is also regularly interviewed by Cheddar, The National Desk, and other TV networks and publications for his financial, stock market, and investing expertise.

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Matt Frankel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends T. Rowe Price Group. The Motley Fool has a disclosure policy.