Methodology
Each month, the analysts and editors of the Mutual Fund Informer present profiles of high-quality mutual funds with superior track records — the kinds of mutual funds that provide the best opportunities for investors to meet (or even beat) the overall market over the long term.
Investing in mutual funds doesn’t have to be difficult, as long as you steadfastly follow a few straightforward principles. Unfortunately, there are many opposing forces that get in the way of putting these rules into effect in your personal portfolio.
Our approach is based on 6 Simple Rules of Successful Fund Investing, and 5 Keys to Selecting Winning Mutual Funds. Here is an overview of our philosophy.
Our 6 Simple Rules of Successful Fund Investing are based on the commonsense advice that history’s best investors have used and subsequently taught to students of the markets. Stray from these rules at your own peril!
- Be an investor in your funds, not a trader.
- Focus on equity funds.
- Invest in your funds regularly, through all market ups and downs.
- Take advantage of tax-advantaged accounts whenever possible.
- Intelligently diversify your funds and allocate your assets.
- Concentrate your portfolio in just a handful of funds.
Our 5 Keys to Selecting Winning Mutual Funds outline the primary areas that you must review before making any fund purchase decision.
- Be cheap. Keep costs and expenses low.
- Pick funds with stable, consistent, long-term performance records of out-performing their style indexes.
- Understand the importance of a fund's management to its success.
- Choose funds with low portfolio turnover. Find managers that invest shareholders' money, not trade with it.
- Verify that the fund's investment style is consistent over time. A fund's approach shouldn't "drift" from its stated philosophy.
You can learn more about these in our How to Use the Mutual Fund Informer Guide, or in the educational articles included in each issue.