What are the criteria’s that comes in mind when an investor decides or chooses the best mutual fund to invest upon? A couple of important factors come into play here. The first is the total number of assets that are under the management of the
fund manager for that particular fund: i.e the
asset allocation and growth or yield of that fund with due course of time. Mutual fund investments are generally low risk investments when compared to individual stock investments. Hence when you create your investment strategy it is necessary that you define your goals and objectives and if you opt for
mutual fund investments, it’s necessary that you include it in your investment portfolio. Once that is done the next step would be determining the choice of the find. Other than the criteria’s mentioned other important factors include performance of fund, fund manager, fund family and buying and redeeming shares. Also prior to making a mutual fund purchase, review your account statements and those of your family to find amounts of investments in a particular mutual fund or family of funds to see if these transactions can be combined to obtain a breakpoint discount. Don't limit your review to accounts at a single securities firm. You may have related mutual fund holdings in accounts at other securities firms or with the mutual fund company itself that can help you reach a breakpoint discount.
Checking the performance of the fund means getting an overview of the fund’s performance for the last 10 years approximately. Investing in a fund based on it’s current performance could be dangerous as the performance of a fund is dependent on the fund manager. It could be that the fund manager was good only at estimating the fluctuations of one particular market and hence he had the results. There is always a co-relation of results of a fund from the past to the future. A fund that has performed consistently well in the past is always bankable for the present as well as the future. See if the investment style of the fund matches your goal and if you are comfortable with the level of risk involved in the investment. The level of risk depends on short selling, leverages, derivatives and market timing of the fund. Name of fund isn’t that important. Say a fund that started out with small time capital stocks and had a name that related to its nature could have ballooned its assets later and would go onto become a bigger fund.
The performance of a fund as mentioned will depend on the ability of a fund manager; hence it is wise that he/she is consulted prior to making the investment. Fund family includes policies, services and area of expertise. Services include account information and availability, news letters and annual reports. Buying and redeeming of shares enables you to buy and sale shares directly from the fund. This allows you to overlook brokerage commissions. All in all Mutual Fund Investments is the best investment strategy for long term capital gain along with security, provided you opt for the
best mutual fund.
