Choosing A Fund
For years I have been saying you must have a fund that is outperforming the S&P500 Index. Well, I've changed my mind. Now I think your fund should be outperforming the NASDAQ Composite Index. So far this year, March 30, the S&P is up 1.3% and the NASDAQ Composite is up 9.5 %.
Have you checked your mutual funds for their performance so far this year? I don't know how important your money is to you, but it is important enough for me to check out my funds at the end of each month. I live off that income. Some day you may be doing the same so now is the time to start tracking those returns.
For almost the last 20 years I have bought nothing but no-load mutual funds. There is absolutely no correlation that a fund performs better if you pay commissions. The only one who profits here is the broker, not you. In fact with an 8 1/2% front-end load you actually start 9 1/4% in the hole. Many no-load funds can be purchased at discount brokers for no commission at all. The call these NTF funds - No Transaction Fees. This is a great bargain that every investor should take advantage of.
One of the things I have been preaching for years and I have not changed my mind about this is the funds you own should be the best performers available. My definition of best performer is that you should only buy a no-load fund that has the greatest increase in NAV (Net Asset Value) for the past 6 or 12 months. Your broker is definitely not going to tell you about these. You can find them yourself .
Look in Mutual Fund Section of Investor's Business Daily newspaper. Usually about once a week they publish a list of 25 mutual funds with their performance record for the past 6 or 12 months. If you are going use this indicator then buy the top one, two or three and only check them out once each month to see that they remain on the list. If your fund drops below 15th or 20th or completely out of the list you will then sell it and buy the fund that is at the top.
If you have a computer you may check out www.smartmoney.com as they list the top 25 performing funds. I would not buy one unless it has been on the market for at least a year. You may use the same sell strategy as the IBD above.
In real estate the smart strategy is to buy right. In the stock market the smart strategy is to sell right. If you follow this plan during a bull market you will make 2 or 3 times the increase of the S&P or NASDAQ Composite.
If you are willing to look at your mutual funds once each month for about 10 minutes you will be able to outperform 99% of the returns of financial planners, brokers or bankers. Is it worth it to choose your own funds? You have to answer that.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
Copyright 2005
More Resources
Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 404, exitingMore Stocks & Mutual Funds Information:
Related Articles
How to Find Value in No Load Mutual Fund Investing
What are you thinking when it comes to your no load mutual fund selections? Are you saving pennies and sacrificing dollars?Are you spending your time looking at expense ratios, analyzing Morningstar ratings and searching for funds with low fees and no 12b1 charges? If you are like most people, you know these things in and out. You've spent hours evaluating them, and your chosen mutual funds cost little to purchase and maintain.
Box Of Chocolates
Ever have one of those sample boxes of candy? Each little piece is beautifully wrapped in colorful foil or decorated with an interesting design. Taste just one.
Stock Insurance
You have a lock on your house. You have a lock on your car.
Bad News is Good News
For weeks, no, months we have been bombarded with nothing but negative news about the economy in general and thousands of individual companies. The stock market has dropped thousands of points and more than $8 trillion in paper assets have disappeared.
Emotional Trading
The single most expensive stock market trades are those made with emotions, but, of course, you are not an emotional trader are you?Before you bought that stock, mutual fund or Exchange Traded Fund (ETF) you did your research to be sure that what you were buying would return a good profit over the long haul. You bought it and over time you look at it less and less.
Investing Basics - Stocks, Mutual Funds, Real Estate & Online Investing
Have you ever thought of investing? Do you have a family that you would like take care of? Does the idea of making money with stocks, bonds, mutual funds and real estate interest you?Investing is essential to making money. Whether it be stock investing, investing online, real estate investing, finance investing, investing in bonds, investing in mutual funds.
Stock Chart Reading
As an investor you will want to check out any equity before you buy it. Many investors go to Morningstar which is one of the largest providers of mutual fund information in the world.
Learn to Calculate a Stock's Pivot Point
Stocks breakout from properly formed bases everyday but many investors don't understand how to locate a pivot point or what patterns to study that may contain this very important buy signal. A pivot point can be described as the optimal buy point or the area at the end of a familiar base pattern where the stock breaks out into new high territory.
Discover the Retirement Breakthrough the Federal Government Created for You - The Roth IRA!
If you don't know what a Roth IRA is then stop everything, print this article and read it carefully as this will certainly be the most valuable information you read this year. This next retirement account is to your net worth what light bulb was to electricity.
Mutual Fund Honor Roll - Buy High, Sell Low by Chasing Performance
Buy high and sell low -- It's not a typo.Millions of investors guarantee their failure by selecting mutual funds and stocks based on quarterly or annual performance records.
Hedge Funds: the Good, the Bad, and the Ugly
Alfred Winslow Jones started hedge funds in 1949. He was a pioneer of non-traditional investment strategies.
A Good Fund Manager
Every Wall Street analyst, financial planner and broker will tell you that the right way to pick a mutual fund is find a good money manager of a fund that has a long time record.Yes, I believe that too, but it is amazing that when you go back in time to see what this genius did with the mutual fund, you will find years he has had some terrible losses.
The Secret to More Winning Trades is as Simple as Avoiding This Common Mistake
If you're a normal human being, your need to feel good about yourself probably causes you to sell your winners too soon - and -- your need to avoid feelings of regret, causes you to hang on to your losers too long.At one time or another, we're all guilty of letting our emotions dictate our investment decisions.
Trading Tips No 2: The Big Lie in the Stock Market
It is commonly reported that the stock market averages about 10% per year return over the long term (decades). So the investor that buys and holds a diversified portfolio of stocks or mutual funds is led to believe that their portfolio will grow by 10% per year on average.
War Market
There is no question that the stock market is being affected by war jitters. When it looks like peace we have a strong rally.
Market Globalization
Just 30 years ago the stock market was a shadow of what it is today. There were many fewer shareholders and the daily volume was a fraction of what it is at present.
Stock Investment Advice
Stock investment advice is easy to find. Do you get cold called by brokers with the latest investment tip? I have, as have countless others around the globe.
Investing in Stocks and The Game of Monopoly
To begin, you might look at playing the stock market as though you were playing a game of Monopoly. That's right; for playing the stock market 'game' is not unlike playing a game of Monopoly.
Pension Plans
If you have a pension plan at work you will want to read this and if you don't you will still want to because it affects your retirement account.There are two kinds of formal retirement plans that are set in place by employers.
Momentum
One of the basic laws of physics states that a body in motion will continue in motion in the direction it is going until interrupted by another force.That basic physics law also applies to stocks and mutual funds.