I recently invested $5K in mutual funds? What should I be looking out for?

Asked by Judie

3 Answers

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Answered by Cathy Curtis, Financial Adviser in Oakland, CA
Good morning,
I'm assuming that when you invested in the funds you reviewed the fees. If you are invested in index funds the fees should be well under 1%. If you invested in actively-managed funds, fees will be more like 1-1.4%. I'm not sure if this is a small or big part of your savings, but diversification in investing is important....meaning having an allocation to various asset classes: stocks and bonds, a mix of US and international as well as various sizes of stocks- large, mid and small. Then. don't obsess about it, but you'll want to review the performance periodically to see if it meets your expectations. One way to do this is the measure the performance against a relevant benchmark....for US Large Cap stocks the benchmark would be the S&P 500. Lastly, don't worry if the value fluctuates over time. This is a natural characteristic of investing....and is the price we pay to get a greater return over the long run. | 09.18.14 @ 16:34
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$commenter.renderDisplayableName() — {comment} | 12.09.16 @ 19:38
Answered by Alex Bentley, Financial AdviserPRO+ in Pacific Palisades, CA
That is a really hard question to answer, because there are many different types of mutual funds. Cathy has covered the basics, and I agree with her that you really need to be invested for the long haul and avoid reacting to short term movements in the market and the economy. | 09.18.14 @ 18:11
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$commenter.renderDisplayableName() — {comment} | 12.09.16 @ 19:38
Whatever you do, do not pay loads on any mutual funds you buy. Make sure they are no-load funds.

From there look for funds with relatively low expense ratios compared to other funds like it and who also outperform other funds like it over 5 and 10 year periods.
| 12.10.15 @ 07:26
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$commenter.renderDisplayableName() — {comment} | 12.09.16 @ 19:38
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Alex Bentley
Alex Bentley, Financial AdviserPRO+ in Pacific Palisades, CA