Sarah Neudorf February 17, 2020 Mutual Fund
Technical analysis removes all emotional and subjective aspects of your decisions. This method can be based on many means of analyzing a funds price performance. You can do it with a spreadsheet if you have lots of time, or with a software program. Programs will tell you what fund is the most likely best performer and also indicate if your current holdings are continuing to grow.
The trading strategy for each group will be different. One group may only require a "minimum hold" of 30 days while another may require 90 days. A `dividend` group may result in very infrequent trades while a `sector` group may trade more frequently because of changes in the economy and offer opportunities for large gains, large profits. You may, as I have, have two or even three different strategies for the same group of funds, one based on more frequent trading then the other.
Understanding Mutual Fund Data Now that you know how to find mutual fund prices today, there is the matter of knowing how to read what it is that you have found. Funds are listed in alphabetical order, divided into columns underneath the name of the managing company. Your average newspaper will display three columns: in the first, you will see "NAV," short for net asset value.
The four-letter word that no business can live with out and is referred to as the lifeblood of any business is CASH. Accordingly, the individual investor is better served when they think like a business and create cash flows to deploy with leverage into arbitrages. What did he just say? If these terms are foreign to you and you claim to be an investor you better go look them up because they are as old as salt in the financial world and are the best investment advice three self-made billionaires on Forbes 400 ever heard. If you do not know how to enlist cash flow, arbitrage and leverage into your investment plan then seek out a firm that does before it is too late.
Spreadsheets & Formulas I have known plenty of investors who have invested extensive time, money and research into choosing their mutual funds. They have devised their own systems, using complex formulas and spreadsheets to allow them to make the right choice about their mutual funds. Ultimately however, this begs the question: If you have to do all this research, why are you buying mutual funds in the first place? For the amount of time you are spending on your decisions, you could buy individual stocks and not pay a money manager a fee.
Dismiss recent results Past performance is no indicator of future results. No truer words could ever be spoken and they are included in every mutual fund advertisement. But it is extremely difficult to ignore these numbers which the fund companies conveniently place in big bold letters - immediately above the fine print warning us. Nothing is more attractive than a fund with a great record, especially given the dismal performance in the market.