evaluating funds

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tjaffer
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evaluating funds

Post by tjaffer »

Hi there!!!

I have been recently reading alot of the posts and have been very helpful and learning this on a daily basis.

I am taking a personal financial planning course in university and one of the criteria the text book says when deciding to by a fund is to how long it has been around. The text says the fund should be around for atleast 10 yrs. Is it preferrable to invest in funds that have been around for a minimum of 10yrs?
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Friendly Dragon
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Post by Friendly Dragon »

This is a matter of opinion, of course, and there are a lot of factors that an investor needs to consider in choosing a fund from one of the many thousands out there (not to mention the other investment options available - stocks, bonds, GICs, etc). Also you need to consider the investor's personal circumstances to see if the investment is suitable for him/her.

That being said, in my opinion the long-term track record of a mutual fund is very important. I actually think a 15 year record is the minimum necessary to be even somewhat confident that the fund is well-run, and didn't beat the market index due to some lucky choices. Moreover, I would want the fund to be run by the same manager for that 15 year period, I would want him/her to maintain their investment style, and would want some assurance that they will stick with the fund and investment style in the forseeable future.
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