How To Get A Better Mutual Fund Return And Save Your Retirement

By David C Lewis, RFA

Getting good returns on your mutual fund might seem like a joke these days. Many mutual funds have terrible performance, and there are a few reasons why. Government regulations have a lot to do with it, and the industry has gotten lazy and inefficient. As a result, investors have suffered with returns that barely match inflation.

While you may find some ways to boost your fund's returns, keep in mind that these products will almost certainly not be the panacea that you're told they are.

You can boost the returns on your mutual funds by not paying attention to historicals that are posted by the fund company. These are, many times, inflated. By using simple averages instead of compound averages and effective yields, the fund can show you returns that are higher than the actual returns posted by the fund.

If you have a scientific calculator or a lot of time on your hands to do it manually, you can calculate the compounded return over time for these (or any) investment.

Another way to make your investments perform better for you may be just to get out of the fund. I know that's not really boosting the return of the fund, but other investments can offer better advantages. By limiting yourself to just mutual funds, you run the risk of limiting yourself to low returns.

One final point to consider is choosing mutual funds that invest in value stocks or smaller companies. Also, if your fund itself is small, that can be a big plus. If the fees are low, and the fund is small, under the right management you could end up seeing strong growth that will help your portfolio overcome years of lackluster performance.

About the Author:

Author: David Lewis, RFA is a professional financial adviser. If you want more information about any aspect of personal finance, please visit David's website.