Investing in mutual funds doesn’t have to be difficult, as long as you steadfastly follow a few straightforward principles. Unfortunately, many opposing forces get in the way of putting these rules into effect in your personal portfolio.
The following five rules of thumb will help you select funds that will outperform their peers over the long term:
1. Be cheap. Keep costs and expenses low.
2. Pick funds with stable, consistent, long-term performance records of out-performing their style indexes.
3. Understand the importance of a fund’s management to its success.
4. Choose funds with low portfolio turnover. Find managers that invest shareholders’ money, not trade with it.
5. Verify that the fund’s investment style is consistent over time. A fund’s approach shouldn’t “drift” from its stated philosophy.
You can learn more about these rules in the How to Use the Mutual Fund Informer Guide or in the educational articles included in each issue of the Mutual Fund Informer, a new monthly mutual fund newsletter publication from ICLUBcentral that presents profiles of high-quality mutual funds with superior long-term track records. Get profiles of high-quality mutual funds at lowest subscriber rate plus sample a free issue now.