Millions of Americans surrender management of their finances to brokers, financial planners and other advisers to choose profitable mutual fund. But you don’t have to be anything special or hold a degree to pick up funds wisely. Just follow some basic tips which are mentioned bellow to earn maximum profit —-

1. Objective to be considered: First decide whether you would like to go for the maximum profit with high risk factors or do you want steady income? If you want to choose the first option then probably you might want fund that purchases shares of small companies or one which focuses on emerging markets in developing countries like India and China. But if you choose the second option then you might look for the bond fund. But here also be careful about the risk factors—calculate whether you want to settle for a fairly low yield to keep your risk low or you want to take extra risk for high return? If the later, then consider the junk bonds which invest in high-yield debt.

2. Choose a specific category: The world of fund is vast which contains bond funds, stock funds, Treasury bills, bonds, money-market funds etc. and there are innumerable alternatives under each broad category. For example there are funds which invest in some small or big or medium–size companies. In the same way there are standardize sections among bond funds, which are grouped by quality maturity and types of bonds like—municipal, corporate, mortgage etc. List of some popular stock and bond funds are mentioned bellow—

A. US Stock Funds:

1. Bridge way Aggressive Investors 2
2. CGM Focus
3. Champlain Small Company Advisor
4. Excelsior Value & Restructuring
5. Fairholme Fund
6. FBR Small Cap
7. Legg Mason Opportunity Primary
8. Marsico 21st Century
9. Merger Fund
10. Muhlenkamp Fund

B. Bond Funds:
1. Dodge & Cox Income
2. Fidelity Floating Rate High Income
3. Fidelity Intermediate Municipal Income
4. Harbor Bond Institutional
5. Loomis Sayles Bond
3. Monitor the past performance: Check the progress report of a fund —-at least ten years, if possible. Because long-term results reflect that it’s well-managed. Always compare a fund’s result with those of similar funds.

4. Judge the Risk: Don’t get panicked by the word “risk”. Because there is a moral—“No risk, no gain”, “more risk & more gain”. So there is nothing wrong with investing in risky funds. But it’s important that you understand a fund’s risk and can manage both financially & emotionally any expected losses. If possible then check the results—-the state of fund during the last major economic slow down. It can provide you a volatile idea of funds.

5. Know who’s at the Leading point: Since the turnover ratio of Mangers is very high in the market it’s very crucial to check out how long the manager of a fund you’re considering has been at the leading point. A successful & impressive record of a decade may not be significant if the present manager is in charge only for last couple of years.