There are tens of thousands of mutual funds out there for investors to choose from. It is very intimidating for new beginner investors to learn how to find a mutual fund that is right for you and your financial goals.
Where do you go to start looking for the right mutual funds to invest in? What are some of the characteristics that you should look for when determining how to find a mutual fund?
Below are some of the things that you should consider when learning how to find a mutual fund that best fits your needs.
Where To Start Finding Mutual Funds
One of my favorite places to start the search for a new mutual fund to invest in is Money Magazine’s Top 70 mutual funds. It is a list that the magazine publishes every year, and they recently came out with their new list.
Take back control of your finances!
Get a FREE checklist for the money moves to make in the New Year.
Also get new articles, advice, and tips delivered right in your email inbox with our newsletter!
The magazine prides itself of looking past short-term profits and losses for these funds and ETFs and focusing on long-term results for the mutual funds that it selects. Other criteria they use is the average tenure for a mutual fund manager, the expense ratio for the actively traded funds versus the market as a whole, and long-term results for the funds. Another great resource that I love to look at when trying to find new mutual funds to invest in is the Kiplinger’s Personal Finance magazine’s Top 25 list of mutual funds that they also publish every year. You can find Kiplinger’s Personal Finance magazine’s Top 25 list here.
These are both great resources to help you get started. Of course, you need to conduct your own research and due diligence when learning how to find a mutual fund, but these are two great places to start.
Know The Type Of Mutual Fund
What type of mutual fund are you looking for? Do you want a domestic fund or an international fund? Do you want a global mutual fund that can go anywhere in the world and invest in any companies. Do you want a mutual fund that invests in emerging markets?
So, now that you know the location, that is still only half of the puzzle in determining fund type to invest in. What about the size of companies that the mutual fund invests in also called market capitalization? Do you want to invest in large capitalization companies such as Wal-Mart? Or, are you looking for mid-cap or small-cap mutual funds to invest in?
Finally, do you want to invest in growth stocks or value stocks? One way to understand the different types of investment choices that you have as a beginning investor, you can check out the Morningstar Style Box which a nine square grid that provides a graphical representation of the investment style of stocks and mutual funds.
Totally Ready To Give Up?
Don’t let the sheer size of your investment options overwhelm you into doing nothing. There are other ways to begin investing if you do not want to have to have the responsibility of picking the mutual funds. You can invest in pre-built well-diversified portfolios of exchange traded funds (ETFs) like the ones provided by Betterment.com.
I’ve been investing with Betterment for months now and really enjoy the service they provide. You can even set up a Roth IRA with their service now. Be sure to check out my complete review of Betterment to find out more. Get a $25 Account Bonus when you sign up for Betterment. Start now!
It is easy to be quickly overwhelmed when trying to learn how to find a mutual fund to invest in. And, that is especially true if you are a beginner investor. But, there are some great resources that are available to help new investors and seasoned ones alike.
And, of course, if you simply did not feel comfortable picking your own mutual funds, you can turn the task over to an investment company like Betterment that as a readymade portfolio of well diversified investments available to you.