Here Is A Quick Way To Select Successful Mutual Funds
by Tony Clifton
Many investors look only at the track record when choosing a mutual fund. This is a big mistake. The warning that all investment companies give - "past results are not guarantee for further profits" - is there for a reason. Past performance is only one factor that you should consider when selecting a mutual fund.
If you want to pick a really successful fund, you should evaluate a combination of several criterias.
Here is a quick suggestion:
1. Past results. Of course! It's not the only factor, but remains one of the most important factors. The higher the average yearly results are, the better - if you are ready to accept the higher risks.
2. Longivity. Since how long is this mutual fund in the market? You may think the longer is the better. Generally yes, because it means lower risk. But if you are looking for more aggressive opportunities, consider investing in younger mutual funds.
3. Size. The companies who manage large investment amounts are less liquid. Such funds are usually safer, but can't offer too high returns. In case of market crash, such funds are unable to cash out fast enough because of the size of their positions. Generally I prefer smaller funds, because they give more opportunities.
4. Company reputation. What do websites, magazines, newsletters and independent advisors say about the company offering the fund? If most people are happy or unhappy, they probably have good reasons for that.
5. Market segment. Is the fund investing in regions with emergning ecomony? If it is specialized in certain industry, what's the future of that industry? Mutual funds are long term investment - so thing long term when evaluating them.
There are hundreds of factors one should consider when picking a mutual fund. That's why there are so many companies who provide mutual funds evaluation and even charge for that. But in most cases, considering the five factors listed above can help you enough to achieve good results.
About the Author
Of course, it's better to know more about mutual funds investing, about the types of funds and even how to beat the mutual funds. Visit and explore http://www.mutual-funds-investing.info/ for more details.
Are Mutual Funds Safe In Today's Up And Down Stock Market
By Wayne Miller
If you as an investor can learn several new secrets on what is about to happen in the future inside different financial vehicles other than Mutual Funds, you can make more money. One way to do this is looking back at the past history results and another way is by doing other research. With the correct trading education, you can become a serious high dollar trader of the world markets.
If you desire to get rich yourself, the first research you must find deals with low cost safe investments with higher than normal return rewards. You might not know this, but the current banking credit crisis mess here inside the USA right now provides you the trader an exceptional high profit opportunity.
As a matter of fact, you do have a better chance to get seriously rich in 2007 & 2008 faster than during the goal and crude oil rush "if" you obtain the correct all important trading education.
Mutual Funds of most types are dangerous trading vehicles today due mainly to the current USA credit crisis. If you are into these mutual funds today, take if from a trader hundreds of thousands of dollars in US markets for over 20 years when I tell you that you should get out or you risk losing half of your trading risk capital during 2008.
A powerful statement, but very true.
If you are a trader today, you don't want to miss out on certain higher profit trading opportunities that exist today or you will kick yourself later. A good book to read to learn the correct trading education from a trading expert so you can benefit is called: "The US Financial Crisis of 2007."
Why do you need to read it. That is simple. Having the correct information and education can lead you to many red hot trading opportunities that you can act upon immediately that could produce serious dollars.
If you learn how to place a trade "safe" with lower risk style trade involved you can win more money.
Just think of what your own financial situation would be today if you knew starting just from 1998 to ride Gold or Crude Oil all the way up plus actually know before hand fairly close when each of these commodities was ready to reverse? You could of made mega-millions of dollars and there is no hype in that statement either.
If you have been in Mutual Funds since the same time period since 1998 to 2007, how much profits have you made? Now do you see what I mean? The correct trading Education really is king.
You see, if you all by yourself obtain the correct education from author's who are in the know, you can and will know how to pull the most of your trades. What is the bottom line here? Get educated or lose your hard earned money.
Seriously, do yourself a favor and forget the Mutual Funds marketplace because today it is just to risky. In fact you could lose big time and as soon as early 2008. Maybe even half of your trading portfolio. Why would you want to risk that is the question you have to ask yourself.
That's all for now,
http://www.youtube2dollarad.com by the Wayne Miller Trust, author
Mutual Fund Investing: ETFs and Index Funds versus Actively Managed Mutual Funds
Mutual Fund Asset Allocators: ETFs and Index Funds
There are two distinct schools of thought when it comes to investing in mutual funds. One group, which I will call, “Asset Allocators”, utilizes what is commonly referred to as a top-down mutual fund investment approach. The top-down approach emphasizes the big picture by first examining the economy and condition of the broad financial markets and then evaluating individual mutual funds based on standard financial measures of comparison.
At the extreme, asset allocators may not even invest in mutual funds, believing that exchange traded funds (ETFs) are reasonable substitutes for actively managed mutual funds. Investors use ETFs for a variety of reasons but the most important and logical basis for using these financial instruments is their normally low costs, tax-efficiency, style purity as well as their specialized focus. There are many ETFs that emphasize individual parts of the market such as financials, technology and healthcare. The asset allocator who believes that technology will perform well over the next year and does not want to pay an active mutual fund manager to get this exposure would buy a technology ETF.
Asset allocators may also use index funds as a substitute for actively managed mutual funds. Index funds normally offer investors low costs, style purity and tax efficiency. Index funds strive to replicate the performance and characteristics of common benchmarks such as the S&P 500 Index and the Russell 2000 Index. Not all index funds are clones of their respective benchmarks. Some mutual fund companies design index funds to replicate the performance and characteristics of a benchmark without actually holding all of the securities in that benchmark.
The pure asset allocators prefer ETFs and index funds over actively mutual funds on the theory that mutual fund managers cannot outperform benchmarks on a consistent basis. To an asset allocator, it makes no sense to pay a mutual fund manager to under perform its benchmark. There are many financial planners and other investment professionals that utilize this approach. The use of ETFs and index funds is actually a reasonable approach if one of your goals is to create a low cost structure for your clients. On the other hand, it is not very client friendly for investment professionals to use these low cost financial instruments while still charging high fees.
Mutual Fundamentalists and Actively Managed Mutual Funds
The second group, which I will call, “Mutual Fundamentalists”, care very little about the broad market and invest almost entirely based on the fundamentals of each particular mutual fund. These somewhat rigid investors might not entirely ignore the economy and market conditions, but these issues do not drive their investment processes. Mutual fundamentalists focus on factors such as the historical performance and risk attributes of different asset classes, expenses, volatility, and especially portfolio manager and analyst backgrounds. For many mutual fundamentalists, quality of management is the most important factor when evaluating a mutual fund.
Mutual fundamentalists fully acknowledge that some passive investment strategies make sense for specific investment categories, but vigorously disagree with a blanket statement asserting that active portfolio management has no value because portfolio managers cannot outperform benchmarks. Mutual fundamentalists believe that there will always be a large group of portfolio managers who have the ability to outperform benchmarks, but that investors need to do their homework in order to find them.
Combining Asset Allocation and Mutual Fundamentalism
A better approach to mutual fund investing might be to combine the best attributes of asset allocation and mutual fundamentalism. With this approach, you could get the best of both worlds. You would have the opportunity to take advantage of changing market conditions and also have the option to select the best low cost mutual fund managers within your favored asset classes.
Whichever approach you choose, do not let mutual fund expenses weigh your returns down. Most asset allocators and mutual fundamentalists agree that high cost investments should be avoided whenever possible.
Michael A. Weiss, CFA is the editor of The Mutual Fund Investor, a quarterly publication that provides recommendations for some of the best no load mutual funds in various investment categories. To learn more about The Mutual Fund Investor, please visit http://www.mutualfundinvestor.net/.
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