Ask yourself the following questions about the funds in which you're interested in investing. If you answer “NO” to any
question, it should serve as a big yellow flag.
You can research funds at Yahoo Finance. Simply enter a fund’s ticker
symbol in the Quote Box. If you
don’t know a fund’s ticker symbol, type in part of the fund’s
name in the Symbol Lookup.
| Question |
Yes |
No |
Comments |
| Is the fund a true no-load, i.e., there’s no A or B next to the fund’s
name? |
The less you pay to own a fund, the more money you have working for you. |
| Does the fund have an annual expense ratio below 1.5 percent? |
Index funds outperform many actively managed funds because of their much lower
expense ratios. |
| Is this fund’s category different from other funds I own? |
Diversification means having funds with different investment approaches. Too
much investment overlap is not a smart strategy. |
| Does this fund’s performance rank in the top half of its category for
the past three years and five years? |
Go for consistency, not a one-year wonder. |
| Has the manager(s) been around during the long-term period I am assessing? |
If there’s a new guy without an impressive resume, be cautious. |
| Are the bulk of my fund investments in large-cap stocks with a blend of growth
and value? |
Make sure you’ve got the main course set before adding side dishes.
|
