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new shares in the fund of your choice, resulting in two separate transactions.

• Shares — This would be the number of shares of the fund you want to buy, sell, or exchange. Partial (fractional) shares are accepted for mutual funds, so you could specify 205.25 shares.
• Dollars — Alternatively, you can specify how much money you want to spend and your broker will buy, sell, or exchange the number of shares to equal the amount you specified. Sometimes you can even specify that your broker only make the transaction using exact number of shares (i.e., no fractional shares).

Distribution Method — When you buy or exchange shares, you can specify how the fund distributions are to be handled. Generally, you can either have them deposited into your account as cash or have them automatically re-invested back into the fund. Again remember that the automatic re-investment option does not relieve you from paying taxes on distributions.

After submitting your order, you would normally get a chance to confirm it prior to the final transaction. At confirmation time you would normally get a real-time quote for the fund’s share price as well as information about sales loads, transaction fees, and commissions. Before confirming your order make sure that all information is correct and within your expected range. Note that for closed-end funds, which are very similar to stocks, you must actually place a stock order rather than a mutual fund order.

Finally, many funds have minimum initial investment requirements (which are usually in addition to sales loads or other fees). For example, the Vanguard Asset Allocation fund has a minimum initial investment …