Where Not to Trade

There are many places you can trade mutual funds, but that doesn't necessarily mean that you should. Avoid trading mutual funds through bank representatives, insurance agents, or financial planners. Oftentimes, these employees are instructed to "push" certain funds, regardless of your individual needs. And all of these places will charge you commission, called "load," of up to 5.5 percent for trading mutual fund shares.

Despite these warnings, many people still choose to invest in mutual funds through a broker. Doing so eliminates the investor's responsibility for the research and paperwork involved in the process. And many brokerage firms also offer "perks" for trading with them, such as checks and debit cards attached to your account, so you can draw on your money with greater convenience.