[net.invest] Picking a mutual fund

miller@rochester.UUCP (Brad Miller) (09/27/85)

one thing to remember when trying to pick a mutual fund:
Mutual fund shares are shares of a much larger portfolio of
common stocks. If the underlying stocks do well, so does the mutual fund.
Consistently poor performance by a fund is usually indicative of bad
management, but TEMPORARY poor performance (say in a quarter or even a year)
can be considered a buying opportunity: the manager may be taking positions in
stocks that are currently underperforming the market, but he expects to out-
perform the market in the longer term. Buying mutual funds based on who has
the best quarterly gain is something like buying the stock with the largest
quarterly increase: you are probably buying at a peak.

Brad Miller
-- 
miller@rochester.arpa	miller!rochester
University of Rochester CS Dept. Lab Manager