Heike Moeller February 24, 2020 Mutual Fund
Index Funds: Any fund that is made up of a static portfolio structured to mirror the investments of a proposed market index is classified as an index fund. There are small cap indices, bond indices, international indices, specialty indices and many others. The most widely used is the S&P 500 index where the fund uses the same 500 stocks that are included in the Standard and Poors 500. These portfolios are only changed when and if the index changes its holdings which allows for a very tax efficient, low turnover investment.
Unless you have a crystal ball or a time machine, accurately predicting the future gyrations of a stock or the markets is nearly impossible. It may be slightly easier to follow the trend and reallocate your assets close to bottoms and close to tops, but if you are an average investor, you do not have the time, temperament or training to do it well. Most financial and investment advisers do not either.
Check out the fund`s cost of ownership. While you can not predict a fund`s performance, you can control the ongoing expenses. Since expenses impact your ability to grow investments over time, select a fund with low costs. Check the expense ratio, sales fees, trading costs, and 12b-1 fees charged to cover the marketing, distribution and sales. Everything counts against your bottom line - keep it small as possible. When possible, choose funds with expenses less than their category average.
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.
Taxes are often overlooked and can substantially reduce your after-tax gain unless investing within a tax-deferred, retirement account. Avoid funds with large distributions (capital gain payments) by searching for funds with low turnover. Since buying and selling stock incurs transaction costs, lower turnover translates to lower expenses and lower capital gains taxes. Fund managers who seek to boost returns through repeatedly buying and selling securities are no friend of yours.
Checking Your Mutual Fund Prices Today Mutual fund prices today are rarely the same as they were the day before, and are highly unlikely to remain the same tomorrow. The best place for you to find mutual fund prices today is going to be the Internet, and after that, the finance section of your local newspaper. If you have the ticker symbol for your fund, you can simply search it on a finance website, like US News or Yahoo.