How do you pick a good mutual fund?

Answer 1

The trick is not to pick just one, but several with different objectives. That way you can improve your overall return. Say one for large cap stocks, one for small cap stocks, one for value stocks, and one or two for foreign stocks. A good source to begin with is the Morningstar ratings. Those rate 5 stars have the best overall ratings. But there is another approach that has come into vogue recently. That is index funds. Since 70% of mutual funds under perform the market, the idea immerged that a fund will do better to keep expenses down and just attempt to match the market. There are currently over 200 index funds available indexing everything one could imagine and then some. But the most popular are the ones that index the broad market averages such as the S&P 500, the Russel 2000, and several foreign markets.

Here is the link to a good web site where you can compare index funds. Yahoo finance has a good screener for open ended funds.

http://www.etfconnect.com/

Answer 2

trading = losing game after comissions and tax

funds with sales loads usually underperform in the long run
the higher the fees the worst a fund does in the long run(in its category)

broad based index funds with the lowest fees are the most likely way to do well in the long run. acedemic study after study has found this.. you wont see this information in magazines or any other place loaded with agendas and ads.

super cheap index(aka. not actively managed) funds that track the broad market are the way to go..

here is a list of some of the lowest fee funds there are.
https://flagship.vanguard.com/VGApp/hnw/FundsIndexOnly

keep it simple and buy the entire american market with VTSMX
and the rest of the world with VGTSX

with actively managed funds fees are high and the performance depends on the fund manager.. it has been proven that active funds that do well are just as likely as any active fund to do worse than the market in the future. there is no such thing as a fund that always does better than the market.. and even if one fund manager got consistantly lucky your just as likely to pick a great stock as a great active fund.. because your betting on the manager.

just buy the whole market in the cheapest way possible and hold and you are very likely to do better than most of the mutual funds that exist... because costly active funds do worse than the market does over time. there are more mutal funds than there are stocks.. its all a marketing game.

dont listen to the hype.

if you buy broad index funds your simply buying the whole market so you cant ever do worse than it.

while these above are great examples of low cost index funds.. any index fund with very low fees will do.

one last thing... i have no idea why most americans love to hold growth funds when value funds do much better. growth only spikes in a good market and plummets in a bad one, but value just does better consistantly.. i dont buy either, i stay in the middle, but i just thought that was funny.. must be the name "growth" without people ever looking at performance data.

Answer 3

Matthews Asian Funds is a very well run shop. Here is their link:

http://www.matthewsasianfunds.com/

If you are looking for investment ideas, check out what the best investors are buying and selling at http://www.top10traders.com - this is a free site that lets you create a portfolio of stocks with $100,000 in "play" money. Each day the site ranks the best performing portfolios, so you can see how your picks perform compared to other investors. You can also read posts on investing from the best traders, as well as share your own investing ideas. There is also a charting feature , so you can see how your portfolio performs compared to the S&P 500.

Here are this month's best traders:

http://www.top10traders.com/Top10Standings.aspx

Good luck.

Answer 4

A good magezine subscrition will get you started you need to read it for a while to get the direction. You start there and track what it says in the past and see how it actually does then you know what to expect from the new months so just pick something off what they tell you keep reading and keep learning. After some of that you can go see a broker and see if he thinks you know what your doing if not you might want to get in there once you build up some wealth.

Answer 5

Usually a mutual fund is invested in differnt sectors of the economy. You need to do your researc and decide what sectors you think have promise and find the mutual that best match those sectors. Good luck!

Answer 6

Vanguard's prime money market fund pays 5% and has low management fees.

Answer 7

Get the latest issue of Money Magazine

Answer 8

by its long term gain.