What To Do About The Poor Returns On Your Mutual Funds
Getting good returns on your mutual fund might seem like a joke these days. Most mutual funds have pretty poor performance, and there are a few reasons why. Government regulations have a lot to do with it, and the industry has gotten lazy and inefficient. As a result, investors have suffered with returns that barely match inflation.
You can try to boost your fund's returns, but, don't expect these products to solve all of your retirement problems.
You can boost the returns on your mutual funds by not paying attention to past performance numbers that are posted by the fund company. These are, many times, inflated. By using simple averages instead of compound averages and effective yields, the fund can show you returns that are higher than the actual returns posted by the fund.
A financial calculator can help you figure out the compounded return of an investment but, unless you know how to do that, you're probably going to have a hard time trying to figure out what return you are actually getting.
The second step in raising your mutual fund's return may be just to sell 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.
You can try to boost your fund's returns, but, don't expect these products to solve all of your retirement problems.
You can boost the returns on your mutual funds by not paying attention to past performance numbers that are posted by the fund company. These are, many times, inflated. By using simple averages instead of compound averages and effective yields, the fund can show you returns that are higher than the actual returns posted by the fund.
A financial calculator can help you figure out the compounded return of an investment but, unless you know how to do that, you're probably going to have a hard time trying to figure out what return you are actually getting.
The second step in raising your mutual fund's return may be just to sell 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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posted by Debt Consolidation Loan at
7:08 AM
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