| Many investors look only at the track record | | | | usually safer, but can't offer too high returns. In |
| when choosing a fund. This is a big mistake. The | | | | case of market crash, such funds are unable to |
| warning that all investment companies give - "past | | | | cash out fast enough because of the size of their |
| results are not guarantee for further profits" - is | | | | positions. Generally I prefer smaller funds, because |
| there for a reason. Past performance is only one | | | | they give more opportunities. |
| factor that you should consider when selecting an | | | | 4. Company reputation. What do websites, |
| investment fund. | | | | magazines, newsletters and independent advisers |
| If you want to pick a really successful fund, you | | | | say about the company offering the fund? If |
| should evaluate a combination of several criteria. | | | | most people are happy or unhappy, they probably |
| Here is a quick suggestion: | | | | have good reasons for that. |
| 1. Past results. Of course! It's not the only factor, | | | | 5. Market segment. Is the fund investing in regions |
| but remains one of the most important factors. | | | | with emerging economy? If it is specialized in |
| The higher the average yearly results are, the | | | | certain industry, what's the future of that |
| better - if you are ready to accept the higher | | | | industry? Mutual funds are long term investment - |
| risks. | | | | so thing long term when evaluating them. |
| 2. Long life. Since how long is this mutual fund in | | | | There are hundreds of factors one should |
| the market? You may think the longer is the | | | | consider when picking a mutual fund. That's why |
| better. Generally yes, because it means lower risk. | | | | there are so many companies who provide |
| But if you are looking for more aggressive | | | | mutual funds evaluation and even charge for that. |
| opportunities, consider investing in younger mutual | | | | But in most cases, considering the five factors |
| funds. | | | | listed above can help you enough to achieve good |
| 3. Size. The companies who manage large | | | | results. |
| investment amounts are less liquid. Such funds are | | | | |