Checklist before Investing in a Mutual Fund
There are many ways to select a mutual fund, each one has its own ups, downs, and risks. As you select your first mutual fund, consider these factors:
The fund manager: Often a fund is only as good as its management. If the fund manager has shown great performance in the past, future performance is likely to be above average. If the fund manager has been replaced, past performance becomes less meaningful and may even be worthless. A poor-performing fund that gets a new fund manager may turn around and become a top performer.
The size of the fund: Good fund candidates have at least $75 million under management and should be large enough to keep up with institutional investors. At the opposite end of the spectrum, funds with more than $40 billion tend to have problems with being too large.
The size of the fund: Good fund candidates have at least $75 million under management and should be large enough to keep up with institutional investors. At the opposite end of the spectrum, funds with more than $40 billion tend to have problems with being too large.
Purchase constraints: Although some funds require a minimum initial investment of $5,000.00, many good funds dont have this requirement. If you enroll in a funds automatic investment program, the minimum initial investment amount is usually waived. Additionally, many fund minimums are waived or substantially reduced for IRA investments. If you are not starting out with a large sum to invest check out the ones that waive the minimum initial investment amount; I started out investing using an online stock account with a $100.00 minimum, it got me started and I learned a lot.
Fees: A debate has raged during the last ten years about which is better: no-load or load mutual funds. All the studies indicate that paying a sales commission doesnt ensure a greater return. However, investing in a fund with high fees and high returns is better than investing in a fund with low fees and poor performance. Fees are part of life, investing is no different; fees can also overwhelm you so make sure you understand the fees before you commit.
Fees: A debate has raged during the last ten years about which is better: no-load or load mutual funds. All the studies indicate that paying a sales commission doesnt ensure a greater return. However, investing in a fund with high fees and high returns is better than investing in a fund with low fees and poor performance. Fees are part of life, investing is no different; fees can also overwhelm you so make sure you understand the fees before you commit. - 23221
The fund manager: Often a fund is only as good as its management. If the fund manager has shown great performance in the past, future performance is likely to be above average. If the fund manager has been replaced, past performance becomes less meaningful and may even be worthless. A poor-performing fund that gets a new fund manager may turn around and become a top performer.
The size of the fund: Good fund candidates have at least $75 million under management and should be large enough to keep up with institutional investors. At the opposite end of the spectrum, funds with more than $40 billion tend to have problems with being too large.
The size of the fund: Good fund candidates have at least $75 million under management and should be large enough to keep up with institutional investors. At the opposite end of the spectrum, funds with more than $40 billion tend to have problems with being too large.
Purchase constraints: Although some funds require a minimum initial investment of $5,000.00, many good funds dont have this requirement. If you enroll in a funds automatic investment program, the minimum initial investment amount is usually waived. Additionally, many fund minimums are waived or substantially reduced for IRA investments. If you are not starting out with a large sum to invest check out the ones that waive the minimum initial investment amount; I started out investing using an online stock account with a $100.00 minimum, it got me started and I learned a lot.
Fees: A debate has raged during the last ten years about which is better: no-load or load mutual funds. All the studies indicate that paying a sales commission doesnt ensure a greater return. However, investing in a fund with high fees and high returns is better than investing in a fund with low fees and poor performance. Fees are part of life, investing is no different; fees can also overwhelm you so make sure you understand the fees before you commit.
Fees: A debate has raged during the last ten years about which is better: no-load or load mutual funds. All the studies indicate that paying a sales commission doesnt ensure a greater return. However, investing in a fund with high fees and high returns is better than investing in a fund with low fees and poor performance. Fees are part of life, investing is no different; fees can also overwhelm you so make sure you understand the fees before you commit. - 23221
About the Author:
Learning how to invest is a challege. Knowledge and information is the key to investing and how to invest to profit and minimize risk.
posted by X - Men @ 6:57 AM
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