Ten Steps to Selecting a Mutual Fund

Abridged from No Hype - The Straight Goods on Investing Your Money by Gail Bebee, www.nohypeinvesting.com

1. Decide on the class of mutual fund that fits your investment objectives. Use a web mutual fund screening tool to identify a short list of candidate funds within a chosen class.
2. Get acquainted with the candidate funds. Confirm that the fund objectives meet your needs.
3. Check the past performance of the candidate funds. Choose funds that have at least a 3-year performance history and have consistently performed within the fund’s asset class.
4. Examine the fund manager. Look for a seasoned professional.
5. Consider the administrative costs of the fund. Other things being equal, choose a fund with the lowest MER and operating expenses.
6. Look at the total fund size compared to the fund’s mandate.
7. Find out about any special policies that the fund company has in place. Some of these policies can be a hindrance.
8. Pick funds with the lowest or no sales commission, other things being equal.
9. Decide the price you want to pay and when you want to buy the fund. 
10. Consider the idea that sometimes your best investment may not be a mutual fund, but rather a mutual fund company stock.