Investors are urged to examine several factors when making decisions about funds, including price, performance history, risk and level of sophistication. However, one marketing financial services company that provides a range of investment guidance discourages individuals from fixating on fees when selecting a fund.
According to Jemstep, Inc., fees are an important factor in choosing funds, but to make them the sole determinant can force investors to bypass or overlook performance indicators that may be lucrative in the long run. The company notes that it is also crucial to take asset class, historical performance, the level of risk the fund poses in relation to the investor's tolerance and the fund manager's own background.
These factors may have different outcomes depending on the goals and strategies of the investors, making it important to dismiss one-size-fits-all notions about investing in certain funds, paying fees or taking on risk. This is largely because investors' goals may change as they undergo different life events, such as getting married and raising a family, or get closer to retirement.
For those who are unsure about the type of funds they want to invest in, and whether fees are excessive, it can be helpful to do research on their options and whether these funds have yielded investors considerable gains in recent years.
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