The right selection of mutual funds is essential to enjoy the fruits of successful investing. You must be clear with your goals of investing.
This is one of the most interesting arguments in the financial services marketplace. There is more noise around this subject than any other and the confusion that is created is fodder for the unscrupulous. This will be a reasonably technical answer so I apologise in advance. However this one area alone is where most investors make the biggest mistakes with their investments and if understood properly investors could save thousands.So how do you decide which is the best fund? There are two parts to any research and they are qualitative and quantitative research. Qualitative is the face to face assessment of a fund and what they are actually doing to achieve the growth in the fund.
Funds are very common in today's world. Many of the money managers put a lot of money in mutual funds. Most of the people who are investing that hand their money over to someone will put all of their money into these funds. This can be a good strategy, but there are many other alternatives to investing besides this one. You will need to watch out for fees associated with mutual funds.
However those few months information is included in the one year performance showing they are top, but it is also included in the three year and five year data which completely misleads the investor into buying the fund at exactly the wrong time.If a fund has had a short term spike you would now be buying it when its most expensive. To analyse whether a fund is a 'good' fund you would want to know if the performance is down to the skill of the manager and that the skill is transferable to future decisions the manager and team might make.
If you are looking forward to being a long-term investor and growing your capital, the aggressive growth fund would be the right one for you. These have high potential of return on capital but equally high chances of risk. If you cannot afford the high risk factor but are interested in adding to your capital growth then either growth, international and sector mutual funds would be the top ones for you.
To do that its worth buying in the expertise of a specialist investment Independent Financial Adviser who will be able to assess this. For example I would want to exclude small short term spikes and I do that by assessing a fund on a discreet monthly basis ie each month gets its own score. This means that any spikes only have a good score in that particular month.
This is one of the most interesting arguments in the financial services marketplace. There is more noise around this subject than any other and the confusion that is created is fodder for the unscrupulous. This will be a reasonably technical answer so I apologise in advance. However this one area alone is where most investors make the biggest mistakes with their investments and if understood properly investors could save thousands.So how do you decide which is the best fund? There are two parts to any research and they are qualitative and quantitative research. Qualitative is the face to face assessment of a fund and what they are actually doing to achieve the growth in the fund.
Funds are very common in today's world. Many of the money managers put a lot of money in mutual funds. Most of the people who are investing that hand their money over to someone will put all of their money into these funds. This can be a good strategy, but there are many other alternatives to investing besides this one. You will need to watch out for fees associated with mutual funds.
However those few months information is included in the one year performance showing they are top, but it is also included in the three year and five year data which completely misleads the investor into buying the fund at exactly the wrong time.If a fund has had a short term spike you would now be buying it when its most expensive. To analyse whether a fund is a 'good' fund you would want to know if the performance is down to the skill of the manager and that the skill is transferable to future decisions the manager and team might make.
If you are looking forward to being a long-term investor and growing your capital, the aggressive growth fund would be the right one for you. These have high potential of return on capital but equally high chances of risk. If you cannot afford the high risk factor but are interested in adding to your capital growth then either growth, international and sector mutual funds would be the top ones for you.
To do that its worth buying in the expertise of a specialist investment Independent Financial Adviser who will be able to assess this. For example I would want to exclude small short term spikes and I do that by assessing a fund on a discreet monthly basis ie each month gets its own score. This means that any spikes only have a good score in that particular month.
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