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Question about mutual fund selection
Posted on 6/10/13 at 7:49 pm
Posted on 6/10/13 at 7:49 pm
This may be a stupid question, but:
When it comes to buying individual stocks, obviously a lot of average people buy high, then it falls and sell low. Which isn't making them any money.
When looking at mutual funds, what should you be looking at besides the average ytd/1yr/5yr/ect returns and expense ratio? To the me it would seem picking the fund with the highest long term return with lowest fee would make sense. But it also feels like I'm missing something.
Thanks in advance for helping a noob.
When it comes to buying individual stocks, obviously a lot of average people buy high, then it falls and sell low. Which isn't making them any money.
When looking at mutual funds, what should you be looking at besides the average ytd/1yr/5yr/ect returns and expense ratio? To the me it would seem picking the fund with the highest long term return with lowest fee would make sense. But it also feels like I'm missing something.
Thanks in advance for helping a noob.
3
Posted on 6/10/13 at 11:24 pm to jimbeam
I look for 4 or 5 stars.
Manager with 5+ years.
Risk must be average or below.
Return must be above average or high.
Low expense, low turnover. I also look at yield.
B/c of the Great Recession, I look at returns from 2010, 2011 and 2012, plus YTD.
Then, pray.
Manager with 5+ years.
Risk must be average or below.
Return must be above average or high.
Low expense, low turnover. I also look at yield.
B/c of the Great Recession, I look at returns from 2010, 2011 and 2012, plus YTD.
Then, pray.
Posted on 6/10/13 at 11:33 pm to jimbeam
I look at the expense ratio and also carefully read the prospectus so that I know what they actually invest in. My favorite example is various Asian funds that really are basically Japan funds. That can be perfectly fine, but it isn't a larger Asia exposure. Know what you are buying.
I basically ignore how the fund has been doing lately, that is a very unreliable indicator.
I basically ignore how the fund has been doing lately, that is a very unreliable indicator.
Posted on 6/11/13 at 9:14 am to matthew25
quote:
Risk must be average or below. Return must be above average or high.
Doesn't exactly work like this
quote:
I basically ignore how the fund has been doing lately, that is a very unreliable indicator.
:kige:
Posted on 6/11/13 at 9:28 am to jimbeam
I look at inception date, management tenure, portfolio holdings, fees, 10 year and since inception returns.
Inception date is important because you could have two identical equity funds, one started in 2007 and the other in 2009, and the latter could have a higher return since inception by 10%.
Inception date is important because you could have two identical equity funds, one started in 2007 and the other in 2009, and the latter could have a higher return since inception by 10%.
Posted on 6/11/13 at 2:34 pm to foshizzle
quote:
I basically ignore how the fund has been doing lately, that is a very unreliable indicator
Posted on 6/11/13 at 2:47 pm to jimbeam
I have helped write a prospectus and then annual reports. Full of sunshine, rainbows and pink ribbons.
I stay domestic. It's hard enough keeping up with 'Merica, much less China, Japan and Germany.
I stay domestic. It's hard enough keeping up with 'Merica, much less China, Japan and Germany.
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