Brigitte Werfel February 10, 2020 Mutual Fund
Index funds provide a static and very transparent investment portfolio. They also offer very low turnover of securities due to less buying and selling. This allows them to keep operating expenses at a minimum and usually substantially lower than their managed counterparts. The fact that they represent the entire stock or bond holdings of the index provides great diversification, which can also be a disadvantage.
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.
Stay Out of the Money Market Fund or Stable Value Funds - such funds are great if you are building an emergency cash reserve or saving for your summer vacation, but if your investment time horizon is long, putting your money in such vehicles is a poor decision. When the price is below the average you use, be in the Money Market, or stable value option that does not lose money! Move your investments to the stable option as soon as the indexes and funds move below the average you use.
These two lists illustrate just nine (9) possible groups. The next step is to either use software that enables you to find the best future performers within each group or perform fundamental analysis, studying the track record of the manager and his longevity managing the fund as one basic fundamental method. Technical analysis of the funds performance as compared to the markets as a whole is the method I use. You also need rules for when to sell and when to hold, because failing to sell when you should is what creates losses in your pocketbook.