How to measure the performance of mutual funds
Performance consistency, management skill, and expense limitations are among the many factors that influence a funds prospects. Each must be carefully evaluated to improve your chances of finding a fund to outperform the market.
Create a plan
Define your financial goals. Are you saving for retirement? Putting money aside for a home? Funding a childs college education? Your answer will have significant implications on your choice of mutual funds. More time gives you flexibility to use an aggressive approach. Immediate needs call for safety and capital preservation. Take careful consideration of your tolerance for risk. If the market dips, at what point would you lose sleep? Is it a 5% drop? 10% drop? ...more