Since I am new to investing, I'm going to start with mutual funds. I strongly believe in the freedom to buy and sell if I needed to without considering the commission, therefore, I am choosing NTF or no load funds only. You do not pay a commission to buy or sell these funds.
However, after signing up for the Roth IRA on ShareBuilder (where I already have a brokerage account due to a $50 incentive), I was a little lost about choosing the actual mutual funds. I looked at Standard & Poor's, The Street, MorningStar, etc. ShareBuilder advised I look at Lipper's detailed ratings. Choosing from 200 NTF funds from various fund families was no easy task until I bumped into US News Mutual Funds website.
The website easily compares MorningStar, Zack's, Lipper's, Standard & Poor's, and The Street ratings. Also, there is a lot information on each fund including the history of the returns, management, MaxFunds.com scores, etc. Searching for each stock (and remembering to select the right stock from the family in the drop down menu) left me with only 3 funds that I feel are rated the highest by all. I also wanted a semi-consistent return of at least 5%.
I'm not sure about all the details that the websites base their scores on, yet I feel that if several popular websites recommend a fund, it must be doing well. There is no way that even an experienced financial adviser can know everything about the management, the return, the risk, the average return, etc of each of the 200 funds I was considering. Therefore, now I need to choose 2 from IDROX (Real Estate should go up soon, the inconsistent return history is due to the inconsistent real estate market), ACMVX (I wanted to invest in the Republic Services stock, but finding it as the top stock in a highly ranked fund is even better), and PTTDX (great looking fund with mortgage backed securities).
Update: Went with ACMVX and IDROX. PTTDX is government based and invest a lot in low paying US Treasury Bonds as well as Fannie Mae, just didn't feel right.
No comments:
Post a Comment