You understand funds and are ready to invest. Learn the essentials of picking the best funds for you.
You have thousands upon thousands of possible mutual funds you can invest in. Which one(s) should you choose? Certainly not just any one. Let this tutorial help you. It provides five simple questions that will get you started on selecting a fund that is good for you.
We'll tackle two common yardsticks for measuring a fund's risk: standard deviation and beta. Both appear often in financial media.
By using alpha and the Sharpe ratio together, investors have additional tools at their disposal to help them choose investments.
You may know about alphas and Sharpe ratios. But those figures need context to be useful; enter Morningstar's proprietary fund ratings.
A quick way to identify the characteristics of the stocks in a fund is the Morningstar style box. This tool is offered by Morningstar.
The Morningstar style box gives you a snapshot of a fund's investment style. You can use it to learn how a fund invests.
Some types of funds may be especially attractive to beginning investors. Index funds and funds of funds can appeal to these people.