Latest responses to “A quick guide for moving into mutual funds” Copyright 2013, MoneyBlueBook.com 399360 2010-11-08T13:12:49-08:00 Tony DuBon The key to success in mutual funds is to find those that will outperform the market! Easier said than done. Most of the analysis that is available looks at past returns, while steadfastly stating that "past performance is no guarantee of future returns." The major mutual fund information companies like Lipper and Morningstar rate most of the funds available. Morningstar rates all funds as 1-5 stars. About 80% of all new mutual fund purchases go into Morningstar 5 Star funds. And yet, it has been shown again and again that the star rating system has very little if any predictive capability. So, how to find the best funds? There is a new tool that can help you evaluate all 20,000 funds available in the US. It evaluates past performance with both risk and return measurements. A proprietary measure of mutual fund persistence of past returns provides insight into future performance. Backtesting analysis demonstrates the power of the approach, The tool is available for free at www.fundreveal.com. 399370 2010-11-05T15:11:37-07:00 Nick Interesting that people are still spending lots of time searching for the "perfect mutual fund" even after seeing half their retirement disappear because their 401(k) was invested in a mutual fund. The key to finding a mutual fund is to look at the actual return and not the average return. the other key is to realize that losing money has a huge impact on your overall performance that could take years and years to make up for.