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Investing for retirement in mutual funds inquiry


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4 replies to this topic

#1 Just_One_Question

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Posted 14 September 2017 - 04:30 PM

Hey, people who have chosen to save some money for their retirement by putting it in a mutual fund! May I ask you, based on what criteria did you choose which mutual fund to entrust with your savings? Lowest fees, advice from a friend or a relative, statistics pointing out to better past performance, just choosing the most well-known or the largest one, or something else? How did the mutual fund that you are using managed to successfully market itself to you? :)


Edited by Just_One_Question, 14 September 2017 - 04:31 PM.


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#2 JohnC_21

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Posted 14 September 2017 - 04:41 PM

Instead of investing in an actively managed Mutual Fund consider low cost alternatives such as ETFs or Index Funds and diversify over a group of asset classes. Don't constantly buy and sell and don't panic if the market tanks. What funds you choose also depends on your need to take risk and how you react to drops in the market.

 

Some good books to get you started.

 

https://www.amazon.com/What-Wall-Street-Doesnt-Want/dp/0312335725

 

https://www.amazon.com/Allocation-Second-Professional-Finance-Investment/dp/0071700781/ref=sr_1_fkmr0_2?s=books&ie=UTF8&qid=1505425121&sr=1-2-fkmr0&keywords=index+funds+all+you+want+to+know

 

https://www.amazon.com/Common-Sense-Mutual-Funds-Anniversary/dp/0470138130/ref=pd_bxgy_14_img_2?_encoding=UTF8&pd_rd_i=0470138130&pd_rd_r=7V7C5C0P4BB5XE65V2XP&pd_rd_w=BxrSJ&pd_rd_wg=t7TTP&psc=1&refRID=7V7C5C0P4BB5XE65V2XP


Edited by JohnC_21, 14 September 2017 - 05:11 PM.


#3 Just_One_Question

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Posted 14 September 2017 - 04:48 PM

No, no, I know that, but thanks anyways, John. I would like to know how do successful mutual funds win loyal customers at first.:)



#4 JohnC_21

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Posted 14 September 2017 - 05:17 PM

As much as I hate to say it the main reason people flock to a particular fund is past history performance which in no way reflects future performance. The other reason would be how customers rate the Mutual Fund's customer service. If you look at the history of Mutual Funds you will find quite a few that closed shop. They started out great, got customers, then the performance tanked. Mutual Fund companies close these low performance funds making the overall performance look better than it actually is and is called Survivorship Bias.



#5 mjd420nova

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Posted 14 September 2017 - 07:04 PM

Mutual funds are usually a collection of large blocks of stock in a wide selection of companies.  Many large corporations have their own funds for their employees.  The stocks chosen are usually a broad cross section of markets and performance values in an effort to select a low but steady gain in valuation.   To invest in big gainers is not used as they also produce some wild swings in market price that can damage the gains made over longer periods.  Past performance is no indication of future gains so selection of stocks for the funds is usually in the larger corporations that exhibit the steady gains needed to keep the fund solvent.






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