Choosing The Right Mutual Fund

by Joe on May 14, 2010

 Today I will ask readers and experts out there to share with me and others who may be asking themselves these investments  questions:

  1. How do I determine the right mutual fund for my investments?
  2. Do i need a fund manager or can i do it myself?
  3. What are the red flags to watch when getting into mutual funds?
  4. What would you recommend?

 In my finance classes a while ago and my little research i Investmentsgathered that you have to know your risk tolerance, know what type of the fund it is and also the size of the fund.

I hope this questions will stir up some discussion on this subject and shed some light on  this type of investments.

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{ 5 comments… read them below or add one }

Kevin@OutOfYourRut May 14, 2010 at 4:21 pm

There’s probably no one-size-fits-all with investing, but I’d go with mutual funds over stocks. Unless you manage money for a living, you probably don’t have either the time or expertise to do it yourself. Also, you’re better off concentrating your efforts working at what it is you do best, and leave investments to a professional.

As to what type of fund, I’m not sure this is as important as the timing issue. Buying in at the right time is probably the single most important factor in an investment decision. Better to buy after a major sell off, than into a run up. Most stocks/funds will rise when the market is rising, and fall when it’s falling, so for my money, timing is more important.

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Joe May 17, 2010 at 6:56 am

Thanks Kevin for the insights- Timing is definetely one crucial factors when investing. It can make a difference between a $100 gain or $10000 on a single investment.

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Jason @ Redeeming Riches May 14, 2010 at 9:21 pm

I would say there are a few big things you’ll want to consider before investing – 1) Time Frame – how long til your goal; 2) Risk Tolerance – how much risk are you willing to take; 3) Other liquid assets – do you have other money to fall back on or is this it; 4) Diversification – you definitely want a good mix of stocks/bonds correlated to your risk tolerance and 5) Time – do you have the time to manage this yourself, or is it worth hiring someone to help you and free up your time from worrying about it.

Good question and post!

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Joe May 17, 2010 at 9:10 am

Great investing tips Jason and thanks also for highlighting diversification. I read a quote from Warren Buffet that: “for those who know nothing about the markets, extreme diversification makes sense…..” and i would totally agree with his statement

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Sherry August 11, 2011 at 11:33 pm

Never seen a beettr post! ICOCBW

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