To buy most funds, you'll have to make an
initial investment of $500 to $3,000. Once your account is open,
you can make additional purchases whenever you like, usually for
as little as $100, and sometimes less, if you arrange direct deposit
from your paycheck or bank account. Or you can reinvest any earnings
but not add extra cash to your account.
Loss of value
There may be a problem, though, if your account
value falls below the opening minimum because the value of the
underlying shares drops in a market downturn. Then the fund company
may charge you a maintenance fee and/ or require you to add cash
to bring the value up to the minimum.
Since the below-minimum fees may continue
to drain the value of your account, compounding the problem, it's
probably not smart to leave things as they are. While liquidating
your shares in a fund that has lost value means locking in a loss,
you might decide to combine your assets from one or more faltering
funds, creating one more robust fund that meets the fund company's
minimum.
