The following are excerpts from Mutual Fund Investing on the Internet, by Peter G. Crane. (AP Professional $19.95) To order, call 1-800-3131-APP or send email to APP@acad.com)

Mutual Funds versus Discount Brokers

Because the regulation surrounding mutual funds is quite heavy, trading funds online doesn't have as much an advantage over traditional methods as the other functions of Web sites have. But there are still benefits. Just keep in mind that mutmal funds may only be purchased once a day, so trades placed online are effectively the same as those placed via the phone. In other words, intraday timing doesn't matter, even if you're online.

Even though any discount brokerage that's doing enough spending on advertising for you to notice it is probably sound financially, there's never any harm in taking just a little measure of security. Though almost all firms have SIPC, Securities Investors Protection Corp., insurance for up to $1 million, I'd still suggest sticking with the soundest companies.

Some day soon you'll be able to log on, open a mutual fund or brokerage account, log onto to your bank's Website, transfer funds, and place trades all in the same minute, but this isn't the case as of yet. You can download the account application forms and later place the trades, but the money must be mailed to the account. The account must already have the funds in it, which is already the status quo with mutual funds--unlike brokerage accounts, you can't place the trade and get the money to them in three days.

Nonetheless, this doesn't alter the mechanics of placing the actual trade. While you can receive only the closing NAV for a fund, you are at least able to place the trade 24 hours a day. So, whenever you've made the decision to move $10,000 from your Fidelity New Millennium Fund into Fidelity Growth & Income (to make your overall portfolio more conservative, but yet still be invested in stocks), you just log on or call and place the order.

Or, on Schwab's OneSource fund network, after seeing a drop in the market you could move $1,000 from Schwab Money Market Fund (cash) into, say, Oakmark Fund to add to your stock holdings (while the adding is good). You'll have to enter an account number and a password, then enter the trading area.

You'll just choose buy, sell, or whatever, the amount, fund, and you'll be told if there's a transaction fee. Try out Schwab or other sites' demos to practice, just so you're aware of how quickly money can be moved.

How to Invest Online

If you're going to be opening an online account, you'll want to send in a check (with an account application) for deposit into a money market fund account initially. Unless you're prepared to just pick a stock or bond fund investment with the entire investment, this way you'll be able to dollar-cost average. Most fund families have automatic monthly transfer programs, so transfer in a certain amount each month.

While you're waiting for the snail mail to deliver and turtle banking to credit your account, you can be researching investment options and strategies at various fund groups and other sites. Remember, especially on the Internet, any investment that has to be rushed, or has to be there today, is probably a bad one in the first place.