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 match inflation.

There are some ways that you can try to boost your fund's returns, though, don't look for these products to be the end all, be all that they are pitched as.

The first step in boosting the returns on your mutual funds is by ignoring the 1, 5, and 10 year past performance numbers that are posted by the fund company. Most of the time, these numbers are inflated anyway by showing you the simple average as opposed to the effective yield.

Unless you have a scientific calculator, you're probably 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.

The last "tip" on boosting your mutual fund returns is to choose mutual funds that invest in smaller capitalization companies or choose funds that are relatively small in size. A smaller mutual fund would probably be the essential point here. Small funds have more places that they can invest in. It's also easier for a $10 million fund to double in size than it is for a $100 million.

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