How to Select a Mutual Fund - A 10-Part Guide to Picking Winning Mutual Funds

Obviously, if you are investing solely through a tax free account such as a 401k, Roth IRA, or Traditional IRA, this is not a consideration, nor does it matter if you manage the investments for a non-profit. For everyone else, however, taxes can take a huge bite out of the proverbial pie, especially if you are fortune enough to occupy the upper rungs of the income ladder. It’s important to focus on the turnover rate – that is, the percentage of the portfolio that is bought and sold each year – for any mutual fund you are considering. Unless it is a specialty fund such as a convertible bond fund where turnover is part of the deal, you should be wary of funds that habitually turnover 50% or more of their portfolio. These managers are renting stocks, not buying businesses; such figures seem to convey that they are extraordinarily unsure of their investment thesis and have little solid reason for owning the investments they do.

• Why You Should Always Buy No-Load Mutual Funds
• Pay Attention to the Expense Ratio It Can Make or Break You!
• Avoid Mutual Funds with High Turnover Ratios
• Look for an Experienced, Disciplined Management Team
• Find a Philosophy that Agrees with Your Own when Selecting a Mutual Fund
• Look for Ample Diversification of Assets
• The Case for Index Funds
• A Word on International Funds
• Know the Appropriate Benchmark for Your Mutual Funds
• Always Dollar Cost Average