Introduction to Five Questions to Ask before Buying a Mutual Fund

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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.

What you will learn

  • Mutual Fund Questions: How Has It Performed? How Risky Has It Been?
  • Mutual Fund Questions: What Does It Own? Who Runs It? What Does It Cost?

What do you know?

Introduction to Five Questions to Ask before Buying a Mutual Fund

You may feel intimidated by the task of picking a mutual fund. With more than 100,000 funds in the world to choose from (about 10,000 in the United States alone), it’s tempting to buy a magazine or visit a Website that will tell you exactly which funds you should buy, or to just pick the fund that’s topping the performance charts.

These aren’t the best ways to find the fund that will meet your goals or suit your investment personality, however. The next sections will give you a better idea of how to approach the vast marketplace for mutual funds and will introduce five questions that you need to ask and answer before buying any stock fund:

  • How has it performed?
  • How risky has it been?
  • What does it own?
  • Who runs it?
  • What does it cost?

These questions form the foundation of many an approach to fund selection. Here’s a taste of what’s to come.