Sophie Moench February 25, 2020 Mutual Fund
Seek consistency Evaluate a mutual fund`s performance beyond just the recent year. Any fund can get lucky, but it`s the rare firm that prove themselves year after year. Examining a fund`s long term performance can answer the question of consistency. If the performance was good, was it repeatable due to skill - or merely a spike due to dumb luck?
There are also chart services, like StockCharts or BigCharts. Do not have the ticket symbol? There is no need to worry. You can still search the name of your fund at the above sites. Once you have found it, you will want to look for a company that has your desired fund.
Actively Managed Funds: All mutual funds that are actively managed by a fund company in an effort to add value to shareholders returns fall into this category. In theory, an experienced portfolio manager can surpass the returns of an index fund by making well-timed and disciplined trades. The unfortunate reality is that the vast majority of fund managers do NOT beat their index. But the good news is that the top 20% of these funds can and do on a regular basis. We will try to focus on this group of quality managers.
The recent explosion of an oil rig in the Gulf and the resulting chaos and environmental damage tells you that any company can all of a sudden be exposed to dramatic unforeseen risk. In this case it was BP. Mutual Funds can also possess much more risk than you thought you were encountering.
With over 6,000 mutual funds available, it may be tempting to pick funds from a popular star or index rating system. Savvy investors, however, balance multiple factors in their selection process. Ratings represent only the historical performance of funds and cannot predict the future. Performance consistency, management skill, and expense limitations are among the many factors that influence a funds prospects. Each must be carefully evaluated to improve your chances of finding a fund to outperform the market.
Investing in mutual funds online are always subject fees and this can be a tricky subject. Brokers charge fees and these can widely differ depending on the broker you choose to go with. Always read the fine print with anything dealing with money exchanging hands. There could be hidden fees or fees for changing funds that are within the same fund family. Some brokers do not charge any fees and these may be the ones you should look into.