Archive for the ‘Mutual Funds’ Category

A Short Guide on Selecting the Right Mutual Funds for Yourself

Wednesday, August 15th, 2012

Mutual funds are fast emerging as favorite investment avenues for millions of small and big investors all over the world. This large scale popularity is mostly due to the reason that mutual funds on an average have 3 to 4 dozen stocks in a single portfolio. Therefore, risks are significantly cushioned due to such large scale diversification. Below you’ll find a short guide on selecting the right mutual funds for yourself:

1. Understand your own investment objective first of all. A mutual fund should be chosen according to your unique needs. You need to know whether you’re looking to invest in capital growth or a retirement plan! Having a clear idea of your personal needs can help you to make an informed investment decision.

2. Draw an expected time frame for both investment and returns. It is very important to be consciously aware of this time frame when selecting a mutual fund. If you prefer to get returns over the short term, you need not invest in equity funds, for example. For short term returns, an investor should study available floating rate funds or money market funds instead.

3. Once you have finalized the right kind of mutual fund investment plan and timeframe for yourself, it is time to look out for various sources that have such plans on offer. Get in touch with financial advisors to gather this information quickly. You can also rely on financial blogs and investment comparison websites for such information to some degree.

4. Use mutual fund indices to select companies that have been performing well over the last couple of years. You can rely on some of the most standardized industry indices such as S&P fund index, Nasdaq 100 and Russel 2000.

5. Once you’re done short listing companies and plans, you need to get a clear idea of various taxes, fees etc. involved. Directly ask representatives of a company to explain the effect of additional fees and taxes on your overall returns.

6. The best investment is the one that involves least amount of risk. In order to find out whether a plan under consideration is safe or not, you can inquire about its Sharpe Ratio. This number is a good indicator of riskiness of a fund.

7. If you want to build a big asset over a long period of time, you may want to choose a plan that allows you to make smaller contributions in the beginning.

Best Performing Mutual Funds

Thursday, June 30th, 2011

Investing in mutual funds generate good returns when compared to other investment options. They can be divided into several categories based on their performance levels and the way they go about garnering profits for the investors. Based on several factors they are top rated according to the government criteria that are set and if they meet them. Based on these they are given certain ratings.

The best funds can fetch you the highest rates of returns. The interest rates for all these funds are quoted on a three month basis. when you are thinking of selecting best performing funds you should consider how they have been faring in the market on a one year or three years basis. This will give you a fair enough idea about the way the fund is being maintained and the profits that they have been posting. You should also analyze the profile of the fund manager, his experience in generating profits and ability to take risk.

The best performing funds are those that are floated by companies that are different than the rest, have enough cutting edge to be ranked right on top and are doing well in the spheres of certain well defined criteria that have been preset to judge their performance. To invest in mutual funds, we have to pay taxes and fees. So that amount will reduce our returns. We have to check those amounts before investing. Apart from that there are also systematic investment plans for investors who need flexible payment options.