Devoted to understanding the basics and fundamentals of investing

How should you choose a mutual fund? What are the key questions you should ask yourself in determining which fund is the best investment? I want to investigate these questions tonight.

Obviously when you look for a mutual fund you are looking for the best mutual fund out there. So what makes a good mutual fund? A good mutual fund has terrific past performance, a manager that has proven himself/herself, low expenses, no loads, and lower turnovers.

When looking for that best mutual fund for you, consider using these steps.

1. Go to your favorite investing site (eg Yahoo Finance, or Morningstar) and perform a mutual fund screen to find the best performers over the past 1,3,5, and 10 year periods. Be careful not to overweight short term performance. Any fund can do well over a 3 month period, but you want to find a fund that has a long term track record of great performance.
2. Visit Morningstar's Fees and Expenses page (example, FAIRX Fees and Expenses) of your possible fund choices which will show you redemption fee amounts, total cost projections, and give you a break down of all the fees associated with the fund.
3. Use the Morningstar management page (example of FAIRX management) to view the track record of the mutual funds you are considering. Always overweight funds that have management who have been through different markets and proven their ability to outperform in all situations. An awesome performance over the past year means very little if a new manager just took over a week ago.

Most investors simply look at the mutual funds return and overlook these other important attributes of a top fund. It is important to remember that as an investor you are looking for the best overall return, which includes fees and expenses.

The mutual fund is a great investment vehicle, but there are thousands of mutual funds that aren't very good investments. Use these steps to help yourself find one of the best investment options out there.