How to Choose a Mutual Fund

As someone who advises people how to manage their money, I am asked frequently how I choose the investments that I recommend or buy on behalf of clients. There are a few ways to go about answering such a question, but the simple answer is that I’m cheap.

You may have already figured that out if you have read any of my DIY articles recently. One cause of my parsimony is certainly due to a father that passed to along a frugal streak that earned him a nickname of Squeaky Weeks. It was said that he was so tight, that he squeaked when he walked.

But while the thrifty trait very well may have been passed through DNA, the behavior has been nurtured by observations as well. Perhaps the most compelling research has been Dimensional Funds annual Mutual Fund Landscape, which once again reveals the power of penny pinching.

A Hot “Alternative Investment”

Back in June, I wrote about “A DIY Lesson Learned”, where I shared my experience of attempting to repair my hot water heater. After spending too much time and effort to fix it myself, I promised that I would just call a professional the next time I had a home repair need. It turns out, I didn’t have to wait long to see if I had really learned my lesson.

It all started when someone flushed a toilet while I was taking a shower. The warm shower become very cold and then scalding hot, which had never happened in the previous 12 years we have lived in our home. In my college days, a sudden change in shower temperatures was such a common occurrence in the communal dorm showers that it was expected that someone about to flush would announce their intent and wait for anyone in the shower to acknowledge they were aware of what was coming. “Crapper,” the flusher would yell! “Shoot it,” those in the shower would reply when they were clear.

ATX Portfolio Advisors, LLC is a State of Texas Registered Investment Advisory Company. 

Please consider the investment objectives, risks, charges, and expenses carefully before investing in Mutual Funds. The prospectus, which contains this and other information about the investment company, can be obtained directly from the Fund Company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

Asset Allocation and/or Diversification do not guarantee a profit or protect against a loss in a declining market.  They are methods used to help manage investment risk. 

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