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Getting Started With A+ Investor: |
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Congratulations on making it through the A+ Investor Getting Started series. Over the last few weeks, I have given you a tour of some of the resources A+ Investor provides to solve many of the problems faced by individual investors such as yourself. However, this doesn’t mark the end of your journey; instead, this is only the beginning of the path toward becoming an A+ Investor. Starting Monday, you will receive a weekly email that will serve as an extension of the getting started series. In my last A+ Investor Getting Started email, I showed you how to find a mutual fund or exchange-traded fund (ETF) by using our mutual fund and ETF screeners. Both are powerful tools. But what if you want to analyze a specific fund? A+ Investor can help you do this too. Mutual Fund and ETF EvaluatorsYou may recall me recently discussing our Stock Evaluator. It works great for analyzing stocks, but mutual funds and ETFs are different than stocks and require a different type of analysis. So, we built specific evaluators for each. To access either, just type in the fund name or ticker in the search box at the top-left of the AAII website (www.aaii.com) and when it appears via the autofill drop-down box, click on the fund name: Once you are on the Fund (or ETF) Evaluator, you will notice two tabs: Overview and Insights. Both can help you quickly assess a fund’s attractiveness.  The Overview tab, as the name describes, gives you information about the fund. Here, you will find important statistics such as the fund’s size, its yield, expense ratio and—for mutual funds—the minimum initial purchase amount. You’ll also notice the fund’s grades. These grades measure a fund’s returns and risk against its peers. Grades of A or B signal that the fund is better than its category peers for a specific statistic, such as three-year return. Grades of D or F signal that the fund is worse than its category peers. As you scroll down through the overview, you will find that it offers trailing and annual performance figures for up to 10 years, along with grades showing how the fund stacks up against other funds in its category on a year-by-year basis for performance. Scroll down further and you will find information about the fund’s risk profile, its portfolio composition and its expenses. This data helps you determine whether the fund possesses the characteristics you seek. Clicking on the Insights tab gives you a quick qualitative analysis of the fund. It will tell you areas where the fund has fared strongly as well as highlight how consistently it has performed over the past 10 years. It makes getting a quick assessment of a fund easy.  Tracking the Funds You OwnWhat if you want to track more than one fund? Maybe you own certain mutual funds and ETFs and want to know if you should continue to hold them. This is where My Portfolio can help. By entering your mutual fund and ETF holdings into My Portfolio, you can get regularly updated grades on each holding. You can access them by clicking on the “Grades” tab of my My Portfolio.  You can also get insights on your mutual fund and ETF holdings by clicking on the “Insights” tab of My Portfolio and scrolling down.
 Combined, this objective information will help you make better decisions. Funds that have outperformed their category peers over various periods (as designated by grades of A or B) are candidates to consider holding. Funds that continuously lag their peers (grades of D or F) may be candidates for removal, especially if their underperformance is coupled with above-average risk and above-average expense ratios (also designated by grades of D or F). The A+ Investor tools can help you quickly make these assessments and, when necessary, evaluate new mutual fund and ETF candidates. Getting Started ArchiveIf you missed the previous emails in the A+ Investor Getting Started series, please visit the archive page online.
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