Evaluating Mutual Funds
by
Gregory Grant
Mutual Funds offer instant diversification, allowing an investor to own a piece of many companies, all with one transaction. But with over 5000 mutual funds to choose from, what criteria should people use to pick them?
"You need to decide what your objectives first and foremost are," said Patricia Bell of Merrill Lynch. "Are you looking for an income stream, are you looking for a growth stream? Do you have a three-year time horizon? Do you have a five-year time horizon? There are some questions that you need to ask about your own objectives so that you can narrow down what pool you want to look at."
Analysts say that not only should investors target which funds may be right for them, they should also look at the size of the fund as well.
"One question I always like to ask when I'm looking at mutual funds is how large the fund is," Bell said. "Because obviously the way that you invest a fund that's with a hundred million dollars and the way you invest a fund that has 50 billion dollars...there are certain opportunities that a smaller fund can take advantage of that a large fund can't."
When evaluating mutual funds, you have to decide what your objectives are. Narrowing down the possibilities and talking to your financial advisor are the best ways to choose mutual funds.
In recent years, companies have flocked to the web to set up dot.com sites. Initially retail companies caught the attention of investors and consumers alike.
When to sell a stock is as important as when to buy a stock. The investor that goes beyond just looking at the financial pages will find that this kind of in-depth research will pay off in helping to make wiser investment choices.