Though there is no set formula by which investors can bag the best deals on mutual fund investments, there are strategies that they can use to beat the depression and avoid getting stuck with losses.
The first strategy is to get the best deal on mutual fund investments. Though banks have investment arms that conveniently provide assistance, they charge a 5% commission and so do brokers. The best deals on mutual fund investments are usually found online, where trading fees are comparatively modest and funds can be bought at practically no load.
Alternatively, investors can make no load purchases from fund houses like Vanguard, Schwab, and Fidelity for their own as well as competing funds. For large minimum investments, they offer discounts on commission on load funds and waive maintenance fees for electronic statements. However, the best mutual funds advice is what a fee based advisor provides but they will not work for any investment less than $ 100,000. Such advisors also manage movement of investments more efficiently by getting the best online deals.
Often the best mutual fund investments are those which balance risks by investing in a healthy mix of high risk (equity funds), low risk (fixed-income funds), and balanced funds. Balance can also be achieved by asset allocation across classes of funds while ensuring that no sector or specialty fund contributes more than seven percent of all investments.
In terms of the best mutual funds for equity during the downturn, index funds have fared well as have emerging market funds. Target retirement funds like the Vanguard target retirement 2030 fund offer the best mutual fund investments for 401K. However, it is important to study winning picks of say Fidelity or Morningstar to find the best mutual fund investments in each of these categories.
The best mutual funds often have fund managers who have performed consistently for over five years, earning good returns despite one or more downturns. Though the Internet has many tools to get the best out of mutual fund investments, it is best to map performance by the fund manager to find a winner who has beaten the market five years in a row. Last but not the least, it is important to know when to sell mutual funds.
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