Top Mutual Fund Tips
If you are going to learn from this site, it should be these 5 things:
Never pay a load. Practically all funds that charge a load are not worth it. You are just paying an extra fee, which is likely going into the pockets of whoever is trying to convince you to buy the mutual fund.
Keep the expense fee small. Make the mutual fund justify the expense fee. Don.t just blindly pay fees. Anything you pay detracts from the returns you can make. It might not seem like a big deal to pay a 1.5% fee instead of a .8% fee, but it can add up to a lot over the long run.
Don’t buy too many mutual funds. A mutual fund in of itself is diversified. Most mutual funds invest in over a hundred different stocks. You don’t need to invest in multiple mutual funds that target the same asset type (such as large cap growth stocks).
Be wary of very large mutual funds. When a mutual fund gets to be a large size, it becomes more and more difficult to invest its investors’ money. Try to invest in mutual funds with a $5 billion or less in total assets, even smaller if it’s a small cap targeted fund.
Consider buying an index fund. Most mutual funds don’t beat the market. An easy way to get returns is to just mimic the market by buying an index fund.