Mutual Funds With
Investment Criteria Similar to CANSLIM: A Better Way Of Selecting Funds
For Your Retirement!
ITIPress.org - Soraya Nasrallah /
Registered
Representative, Source Capital Group, Inc. Members NASD/SIPC
 Many
of you know that Mutual Funds are an excellent way to invest in the market
because they offer you diversification, professional management, and
instant liquidity. In some ways it is like having your cake and eating it
too. That does not mean that you should invest all of your investment
dollars into Funds; it just means that it is wise for the majority of
investors to have a certain percentage of their portfolio invested in a
Fund that will cater to their needs.
There are over 15,000 Funds out there, and there are actually more funds
than there are stocks trading on the major exchanges. So how does one
choose from such a vast array of selections? First I will mention some
steps and tips you may follow in order to select a fund, and then I will
offer you some Funds that I have found to be investing in a similar way
that one would invest in
CANSLIM stocks.
1. What is your time frame and goals? Are you able to wait an
approximate minimum of 10 years before you dip into the monies in a Fund?
2.
If you have time on
your side and you wish to have this money grow so that it may offer you
possible higher returns than with a “safe” investment (like CD’s, Money
Markets etc.) then you might place yourself in the Growth, Aggressive
Growth, and Growth & Income Categories.
3. To search for Mutual Funds that fit under a particular category you
can use Morningstar for your search.
4.
Make a list of the
Funds you have found. You may also go through each of the choices
Morningstar has come up for you. This list may be very large! Among the
most important sections, I would recommend for any investor to look at the
objectives of the Fund and how stocks are selected before it is included
into their Fund.
5.
Look at manager of
the fund and the history of the fund (in terms of % returns). If a Fund
has achieved outstanding returns, it is not because of the Fund’s name, it
is because of the manager or managerial team of that particular Fund!
Choosing a Fund that has been in existence for at least 3 to 5 years and
has had management stability would be a better choice.
6.
As we all know,
these past 3 years have been rough on those investments that are usually
considered to be beneficial for investors with a longer time frame. With
this said, do not base a Fund choice solely on these past three years.
There are a lot of Funds out there that have achieved exceptional returns
for the past 5 to 10 years, but have offered small or negative returns due
to the climate of the Market. After all, most “ships” or stocks go up or
down with the “tide” or market.
7.
By now you probably
have narrowed down your selections to 10 or 20 Funds. That is still quite
a bit, and you don’t need a basket of Funds to get you where you want to
be. Depending on the percentage that you can allocate toward Funds, you or
your Investment Advisor should find just 2 or 3 funds that will do the
job. Make sure you are not duplicating your holdings with each Fund you
own. If you choose two Funds to invest in, make sure the holdings within
the Funds are different.
8.
Sales Charges and
Total Expenses. Sure, you want to get the best deal in town, but not at
the expense of your retirement! You will get more out of your Fund if you
invest a lump sum
(like a roll over from another company or retirement account) when the
market is down. Remember, when you buy shares of a Fund you pay the Public
Offering Price (which includes the sales charge) and when you wish to
redeem you receive the Net Asset Value (NAV). The NAV is calculated at the
end of each trading day.
9.
Set up an Automatic
Investment Plan! You have seen me writing about this one before. I love
AIP’s, which are a great way to stay invested while at the same time
maintaining the peace of mind that you are PAYING YOURSELF FIRST! Rather
than “when I get around to it”, people need to put themselves and their
retirements FIRST! Because I have a time frame of 20+ years, I currently
have most of my retirement money in cash, and a Growth oriented Mutual
Fund within my Roth IRA. Because I want to participate in the “safer” side
of stocks, I have also been looking for a Mutual Fund that invests
primarily in dividend-paying large cap companies that will accept a
monthly minimum of $50 dollars invested via an Automatic Investment Plan.
I’ll let you know what I find.
10.
It takes a lot
of research to choose the right investment based on your goals and time
frame. With the help of your Investment Adviser, you will be able to find
the path that leads you to the future you have been longing for.
The following are some of the Mutual Funds I have found to have an
investment criteria selection process somewhat similar to CANSLIM. In
general, they focus on small companies that are leaders with superb
earnings and momentum. Please be aware that these are not deemed “buy
recommendations” and it is important that you invest only in Funds based
upon your particular needs and risk tolerance.
|
1. AIM Small
Cap Growth Fund (GTSAX) |
|
2. Calamos
Growth Fund (CVGRX) |
|
3. Munder Mid
Cap Select (MGOAX) |
|
4. PIMCO PEA
Opportunity Fund (POPAX) |
Write to
Soraya@TheInvestor.tv or
Info@TheInvestor.tv for questions
"The
only real limitation on your abilities is the level of your desires. If
you want it badly enough, there are no limits on what you can achieve." –
Brian Tracy |
