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. Most mutual funds have pretty poor 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 beat inflation.

There are a few ways that you can try to get better mutual fund returns, but, don't look for these products to be the silver bullet for your retirement that they are pitched as.

Your mutual funds are probably posting inflated returns. By not paying attention to historical returns that are posted by the fund company, and instead asking an independent adviser to help you calculate your true return, you'll get a better idea of how you're doing. The fund typically shows you the simple average instead of the compound average which will result is higher returns on paper. It's good for business but not for your portfolio.

Unless you have a scientific calculator, you're definitely not going to get too far.

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:

About the author: There is only so much information that can be covered in one article. If you want more information about any aspect of financial planning, please visit David's website.