Choosing the Right Fund

One of the key ways to choose a fund is to evaluate its past performance. This is one of the integral characteristics of the successful investor that was described at the beginning of this section. By tracking how profitable a fund has been, you will gain a feel for the fund. Like stocks, mutual funds have their own "personality." Knowing this personality will help even the novice investor make decisions that are more intuitive and well-informed.

There is the commonly held belief by many investors that certain funds do better or worse than others because they briefly outperform or underperform the averages. This is thought to be only temporary. In the end, funds are supposed to revert back to the normal middle ground. If one looks at the performance of funds over time, it is true that most funds do become average performers. Nevertheless, look for the some of the following indications when choosing a fund:

Granted, some of these criteria may appear to be common sense, but you would be surprised how many advisers do not follow this. Often times, people plunge into a mutual fund, stock or some investment based on a "hot tip" or a "hunch." It is imperative that you know a fund well and can provide reasons for investing in it before you actually do so.

Highly Rated Mutual Funds

Fund Minimum Initial Investment Telephone
Axe Houghton Income $1000 (800) 431-1030
Boston Company Capital Appreciation 1000 (800) 225-5267
Boston Company Managed Income 1000 (800) 225-5267
Dreyfus Fund 2500 (800) 645-6561
Dreyfus Leverage 2500 (800) 645-6561
Founders Equity Income 1000 (800) 252-2440
Gradison Growth Established 1000 (800) 543-1818
IAI Regional 2500 (612) 371-2884
IAI Stock 1000 (612) 371-2884
Janus 1000 (800) 525-3713
Janus Venture 1000 (800) 525-3713
Lindner 2000 (314) 727-5305
Mathers 1000 (800) 962-3863
Partners 1000 (800) 367-0770
Nomura Pacific 1000 (800) 833-0018
Reich & Tang 5000 (800) 221-3079
Scudder Growth and Income 1000 (800) 225-2470
SteinRoe Special 1000 (800) 338-2550
Strong Total Return 250 (800) 368-3863
USAA Cornerstone 1000 (800) 531-8000
USAA Mutual Income 1000 (800) 531-8000
Valley Forge 2500 (215) 688-6839

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