Fund Returns Got You Down? Save Your Retirement Now

By David C Lewis, RFA

Good mutual fund returns are hard to come by these days. Most actively managed funds are don't give their investors market-beating returns. It shouldn't come as a surprise though. Regulations have have helped this industry (and also hurt it), and as a result, this has pushed down returns for many individuals.

While you may find a few ways to boost your fund's returns, keep in mind that these products will most likely not be the end all, be all that you're told they are.

The first step in boosting the returns on your mutual funds is by ignoring the 1, 5, and 10 year past performance numbers that are posted by the fund company. Most of the time, these numbers are inflated anyway by showing you the simple average as opposed to the effective yield.

Unless you have a scientific calculator, you're definitely not going to get too far.

The second step in boosting your mutual fund's return may be just to dump the fund. I know that's not really boosting the return of the fund, but you may be better off investing in something else. Actually, that's one of the basic rules of investing: understand what you are investing in. Unless you understand every business that that mutual fund holds, you are asking for trouble. You're not being a smart investor, you're just guessing.

One final point to consider is choosing mutual funds that invest in value stocks or smaller companies. Also, if your fund itself is small, that can be a big plus. If the fees are low, and the fund is small, under the right management you could end up seeing strong growth that will help your portfolio overcome years of lackluster performance.

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