Mutual funds are continuing to gain popularity in the investment community. There is a lot to learn about mutual funds if you want to begin trading them, including when they trade. So when do mutual funds trade and do mutual funds trade on weekends?
Mutual funds do not trade on weekends. They trade once at the end of each business day. However, you can still buy and sell mutual funds on weekends, but your funds are subject to price fluctuations until the end of the first business day of the week when the broker will actually execute the trade.
This article will break down when mutual funds trade, why they do not trade on weekends, and what risks are involved when you buy and sell mutual funds on weekends. If you want to invest in mutual funds, there is some important information for you to remember when investing in mutual funds and how you can learn more about them.
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Table of Contents
When Do Mutual Funds Trade?
Unlike many other investments, mutual funds trade once a day, on business days only. Mutual funds in the United States trade at the end of the day when markets close, at 4 PM eastern time.
You do not have to wait until right before the market closes to buy or sell mutual funds.
You can place your trade order at any time, but the broker will not execute it until the market closes. If you buy or sell a mutual fund before the market closes, you will have a general idea of the price as long as nothing drastic happens before the trade deadline. But, you will not know for sure, and you never know what events can suddenly change the market.
Mutual fund trades will typically post at the next trade time, but they can take up to three days to settle. Usually, mutual funds will settle the same day, though, and they will be posted at the net asset value or NAV at the end of that day.
If they are posted on the same business day, you will see it by 6 PM Eastern Time, which is right after the market closes.
Can I Buy Mutual Funds on Weekends?
Mutual funds do not trade on weekends, but that does not mean you can not place an order to buy or sell them on weekends. However, the system will not complete your trade until the next business day when the mutual funds trade, and you may not know the price until the trade does close.
To clarify, mutual funds trade at the end of each business day, typically Monday through Friday, except for holidays.
At the end of the business day, the brokerage will execute any orders since the last trading day. Even though mutual funds will only be traded five times a week, investors can buy or sell mutual funds at any time, even on weekends.
The trade will be pending until the end of the next business day, but you can still buy or sell before then.
Since mutual funds only trade at the end of the day on business days, you will receive the buy or sell price for the next day’s trade.
The next business day is usually Monday unless there is a holiday, then your trade will be completed on Tuesday. This price can change during the day on Monday, so it is riskier to buy or sell on weekends since there is a lot of time for price fluctuations.
While it is not ideal for placing a mutual fund trade on the weekend, some people may find weekend trading helpful if they do not have time during the week to watch markets and place orders. This is risky since prices are not set, and you have a lot of time to change, but if weekends are the best time for you to trade, you can do so.
Important Information About Trading Mutual Funds
There are a few important things to remember before you trade mutual funds.
You will incur fees associated with buying and selling mutual funds, which are typically higher than the fees associated with other investments.
Mutual funds can have three main transaction fees:
- Front-end load
- A back-end load
- No-load
No-load fees mean there are no fees associated with your mutual fund, which usually occur when trading long-term mutual funds.
Back-end loads require you to pay a fee when you sell your mutual funds, and front-end loads have a fee when you purchase the mutual fund.
If you are buying or selling a mutual fund with load fees, remember that you need to pay this to complete your trade, so it is important to have these ready on top of the purchase price or have them redeem your mutual fund sale.
You will likely need to pay other fees when you trade mutual funds, so know what they are before you trade.
Another important thing to remember is that mutual funds are usually bought as long-term investments. If you are looking for a short-term investment, you may want to consider something other than mutual funds because there are fees associated with mutual funds that will add up, and there could be losses in your mutual fund that need time to recover.
Also, if you want to actively manage your investments, something other than mutual funds may be best.
An outside professional almost always trades mutual funds, so you do not have to constantly watch your mutual funds and make changes when the market changes. For an active investment, stocks may be a better option, but mutual funds are good if you do not have much time to manage your investments.
Mutual Fund Resources
In addition to remembering the information in the paragraph above, you will want to be educated on mutual funds before investing in them so you can pick the best investment fund for you.
The following resources will help you understand mutual funds and their benefits.
- Investment for Beginners: A Compilation Guide to Mutual Funds and Index Funds Investment: This book, found on Amazon.com, is a great starting point if you do not know anything about mutual funds or only know a little about investing in general. You will learn how to earn passive income with mutual funds, how to choose a fund, and how to get started with mutual funds.
- Mutual Fund Investors Common Mistakes & Myths: Found on Amazon.com, this book will answer the most common questions regarding mutual funds and avoid common mistakes made by mutual fund investors. Additionally, there is a lot of information about how to understand mutual fund and market terminology.
- Know When to Buy and Sell Mutual Funds, 401ks, and IRAs: This will help you understand the best time to buy and sell mutual funds in addition to other common long-term investments. The book, which is found on Amazon.com, uses easy-to-understand language for beginners and will help you get the best return on your investments.
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Conclusion
Mutual funds do not trade on weekends. They trade once a day at the end of business days only. Although they do not trade on weekends, they can still be bought and sold on weekends. The trade will not be complete until the end of the next business day, and prices can change when you place your trade order until the trade is executed.
Mutual funds are good for people who do not have time to manage their investments and for people who can buy and sell investments on weekends, even though there will be price volatility for these people.
BEFORE YOU GO: Don’t forget to check out my latest article – ‘Exploring Social Trading: Community, Profit, and Collaboration’. I surveyed 1500+ traders to identify the impact social trading can have on your trading performance, and shared all my findings in this article. No matter where you are in your trading journey today, I am confident that you will find this article helpful!
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