Mutual funds can be a tool for investors interested in long-term investing, but they aren't one size fits all. Picking which mutual fund may be a good fit for your portfolio depends on several factors.
Matthew Cleary suggests that your goals should be as specific as possible to guide your investment strategy. For instance, if your goal is to buy a home, you should calculate how much you’ll need for a down payment. By setting a clear time frame, you can map out a practical plan to reach that target.
Cleary also advises checking a fund’s performance over several years, especially in both good and bad market conditions. He explains that you should compare this performance against an index (a benchmark that represents a segment of the stock market) to see if the fund’s active management is adding value beyond simply following the market.
"Target a time frame for which you want to achieve this goal. Once you have these specifics, you can put together a realistic plan for helping to accomplish this goal."
Interested in learning more? Read the full CNN article here.
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