Advertise with Us

Bookmark and Share

How To Measure Top Mutual Funds

When we are looking at mutualfunds it is quite common to get caught up in the sheer number of options that are before us. So how do we measure the top mutual funds to figure out which investing mutual fund is right for our particular circumstance? Well first, let us look at the definition of a top mutual fund - then we will look at how best to measure top mutual funds.

What are Top Mutual Funds?

There is no blanket definition of what makes up top mutual funds. While, obviously, all top mutual funds give good returns on investment and dividends to their investors there are a lot of other subjective factors to take into account when determining whether investing mutual fund is for you and which mutualfunds are right for you to invest in. The things that you need to take into account include what kind of investments you are comfortable with your money being invested into. When you are investing mutual fund you do not have a say as to where your money is being invested, except in the form of guidelines from the mutualfunds about what you are investing in. For instance, you may choose to be investing mutual fund that is low risk and will look at short term gains. However, this mutual fund may invest in things you do not agree with environmentally or socially. There are lots of mutualfunds available nowadays that take these kinds of things into account, so you should look into this before making a decision about where you should invest your money.

How do I Measure Mutualfunds?

Measuring mutualfunds is again a fairly subjective task. Some of it is objective. For instance, you can look at 10 mutualfunds and put together a table that shows the average amount of money that the investors invested and the average dividends over a 5 year period. This ratio is important as some of the top mutual funds require very large amounts to become involved with them. Some mutualfunds have minimum investments of $10,000, $25,000 or even $50,000! While these top mutual funds may be getting a good dividend for their clients they are probably also out of the reach of the every day investor. It does not matter how good their returns are if you can not afford to get involved with them in the first place! When you have figured out which are the top mutual funds that you can afford to invest in you need to figure out what other things are important to you. As we said earlier, do you care if the investments are environmentally and / or socially ethical or not? Do you care if the investment is higher or lower risk? Do you care if the investment is short or longer term? You may care about all or none of these things. When you have made a list of the characteristics that your ideal mutualfunds would have, check the list against the top mutual funds in your price range. There is a good chance that you will come up with more than one that fits your criteria!

But What Do I Do with my Mutualfunds Then??

Whether one mutual fund jumps out at you or whether you have several to choose from, the next best thing for you to do is to go and see your financial planner or accountant. Take your research with you and show it to them. Tell them all the things you would like in your ideal mutual fund and show them the analysis you have done. Ask for their feedback on which of the mutual funds they think is best for your particular financial status and long term investing goals. You should always consult your team of investing professionals before you make a decision about what to invest in - after all, that is why you have them on your team in the first place. They have specialist knowledge that you do not have and they can often stop you from making vitally wrong decisions that could ruin your entire financial future. If you still have more than one mutualfunds after speaking to your professionals, you can ask for advice from people you know who are already successfully trading. They may have invested in the same mutualfunds or know people who have and therefore might be able to give you a perspective from people who are on the inside.