The Best Mutual Fund Family
What we need to find now is the best fund family to make
our system work. I don’t mean to imply that it has
the best individual funds, but recall that we are not
investing in single funds, but looking for strength to help
us identify which fund to put our money in.
Everything we've outlined to this point would work with
mutual funds in general. And in fact, if you have the time
and energy you can make it work with a large mutual fund
supermarket.
But, if you try to trade a system like this with a large universe of mutual funds, every time a new fund comes to the top of
your list you have to check it out:
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- Does your broker handle it?
- Do they have an early redemption fee, if so is it 90
days or less
- Is this fund on your broker's no transaction fees
list? (We have to be careful of fees if we are trading
every 90 days, they can eat up significant returns)
- Will your broker who will let you trade funds more
often than every 6 months without a fee?
- Is the fund minimum investment in your price
range?
- Is this a no load fund?
and so forth.
For the busy investor this is too much
work. So we looked for a single fund family that
still allowed us to put together a system that leveraged
all the key factors that we identified
- a large number of sector and country fund
options
- reasonable minimum holding periods (90 days or
less)
- no load funds
- low minimum investment requirements
- easy fund switching (web or phone)
This is where
Fidelity funds come in a
winner.
- They have a large number of funds (there are 41
sector funds alone, and combined with all the various
country funds, large cap, small caps, realty, etc., there
are over 100 equity funds.)
- The investment minimums for most of
their funds are reasonably low ($2500),
- Most of them are no load funds.
- The minimum holding period for most are 90
days or less, and the Fidelity Select family has a
minimum holding period of just 30
days)
Most importantly, there is enough diversity in their
offerings that using only Fidelity mutual funds gives pretty much
the same performance as using a family of several hundred
funds.
For these reasons we have chosen to focus on Fidelity's
fund offerings. Note: we are not affiliated with Fidelity
in any way, we just like using their funds, and we receive
no compensation from Fidelity for featuring their funds.
This finishes our review of the Keys to Success Investing
in Mutual funds. In review:
1) Buying and holding index funds are not the answer
2) There’s always a bull market somewhere
3) The Trend is your friend
4) Volatility is the enemy
5) The Best Fund Family: the Fidelity Advantage
If you follow these keys to investing, apply them
consistently, over time you'll beat the market and start to
build real wealth.
Good Luck Trading!
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Keys to Success with Mutual Funds, and deliver
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