Choosing a Mutual Fund

Before you choose the type of fund (or make investment decisions in general), prioritize your goals, understand how much risk you’re willing to take and anticipate how long your money has to grow.

Know your goals

This is the fun part. Sit back, close your eyes and imagine your retirement dream. What about other goals, like funding a child’s education or buying a new home? 

Risk tolerance 

Are you a conservative, moderate or aggressive investor? Your risk tolerance reflects how you choose to balance volatility of returns with the potential for greater growth.

Generally, if you accept a higher degree of risk, you can potentially achieve a higher rate of return. If you pick less risky investments, there may be less potential for growth.

Evaluate your time horizon 

How much time do you have between when you invest and when you plan to retire? Time is on your side for a couple reasons.

First, you can select an investment that offers tax-deferred growth until you withdraw money. So, not only does your investment have the chance to grow, but so does the money you would have paid in taxes along the way.

Second, long-term investors can take advantage of potential positive market growth and have time for rebounds after losses. Historically, long-term investors experience investment growth over time.

Consider fund characteristics

Carefully read a fund’s prospectus, sales brochures and information from the fund company’s website. Then ask your investment professional to help you evaluate how a fund fits with your investment goals.

Evaluate the funds

It’s important to select a well-balanced spectrum of funds that represent your investment strategy and retirement objective.

Ask your investment professional for information about the funds you are considering. And consider these factors as part of your evaluation:

Cost − Ask your investment professional about the fees and expenses that may be charged for each fund, including sales charges and gross expenses.

Diversity of investments − Some funds invest in a particular market or a particular investment strategy. Some invest in companies with a history of small but consistent returns, for example, while others invest in smaller, faster-growing companies. 

Always check the objective of the mutual fund and read the fund's prospectus to make sure it’s consistent with your goals

Next steps

Ask your investment professional about Nationwide mutual funds and how they could be a part of your overall investment plan.

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