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Fundamentals of Mutual
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Types of Mutual Funds
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Take a Look At Risk FactorDon't Ignore ExpensesEvery fund charges some kind of fees/loads to cover expenses. Then there are taxes to pay in most of the cases. Typical average expense charged by fund managers is 1.5% though there are funds that charge you as low as 0.2% also. Even 1.5% might appear a small figure but it could make a big difference to you over a long invested period even if you had invested as little as $ 10,000. (Find out a fund's expense ratio at Yahoo! Finance Quote Box).
Track the Track Record of CompaniesTo check mutual funds The shortest time frame you should check for is three year period. As mutual funds are long term investments, it is better to stick to a fund (plus its manager) that has shown consistent performance over long periods (a ten years time is the benchmark). A hot performance of a quarter or a year may suck investors who chase them but even for a short term investment, it is advisable that long term track records are important.Who Is Managing Your FundFinally taking a look at the fund's manager should tell you why the fund is performing as it had. If a fund has a new manager at the helm of affairs after a strong five year performance, it is something to be cautious. Not that you should refrain from that company. Digging deeper into his historical abilities at managing funds throws light on his track record as a fund manager (to find a manager's history click on the Profile tab on the Yahoo! Finance Mutual Fund Quote Page).There are times when you come out winners even with blind investing. But it pays to do a thorough research even in a bull market before investing. Related ArticlesMutual Funds - The Logic behind Investing in ThemWill Mutual Funds Definitely Work in Your Favor? Thinking of Mutual fund? Here are the tips!!! Is the time ripe to buy mutual funds? Best guide for selecting the right mutual funds |
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