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Ontario|Investments & SecuritiesStocks, Bonds, and Mutual Funds 282 How to decide which Mutual Fund to invest in There are many types of mutual funds available and the fund you select should reflect your personal investment objectives. An Investment Advisor can help you determine your investment objectives and select a mutual fund that matches your objectives.
When determining which fund is best for you, there are four main things to consider: the history of the fund, the current management of the fund, the philosophy of the fund, and the fees and risks associated with the fund.
- History of the company or fund
First, mutual funds are sold by many investment companies, banks, and other lending institutions. You may want to consider whether the company or fund has an established history of making good investments and achieving a satisfactory level of returns.
- Management of the fund
Second, the management team of any fund has a direct impact on the success of the fund because their decisions determine what securities are bought and sold.
- Focus or Philosophy of fund
Third, you may want to invest in companies that focus or specialize in a particular industry or sector of the economy or region, such as high tech companies or Far East funds, for example. You may also wish to invest in funds with a particular philosophy, such as protecting the environment or preventing cruelty to animals, by investing in 'ethical' or 'green' funds.
- Fees and risk
Fourth, you should consider what fees the company charges for managing your money and what commissions or fees are charged by the Investment Advisor that sells you the funds. Funds are usually sold on a load or a no load, no commission basis. A fund with a front load means that you are charged when you buy the mutual fund. A fund with a back-end load means that you are charged when you redeem your units. Most funds also charge monthly management fees. You should also decide what level of risk you want to take with your investment. Risk levels should be discussed with your Investment Advisor.
- What to do if you have a complaint about an Investment Advisor
If you have a concern about the way your account has been handled, you may first try to discuss the problem with the company the Investment Advisor works for. For example, the Investment Advisor himself or herself, the Investment Advisor's Branch Manager, or the company's Compliance Officer. If you are not satisfied, you can make a complaint to the Investment Dealers Association, the Ontario Securities Commission, or the relevant stock exchange.
As well as filing a complaint with a regulatory body, you may also be able to arbitrate your dispute with your Investment Advisor. An arbitrator listens to both sides of the dispute and provides a decision that is binding on both parties. Arbitration is a time and cost effective alternative to court proceedings. More information on the arbitration option is available from the Investment Dealers Association.
Alternatively, after you file a complaint with the Investment Dealers Association, the Ontario Securities Commission or the relevant stock exchange, you may also be able to start legal action against the Investment Advisor and the firm they work for. You will have to show that your case involves more than a decline in an investment's value. You can obtain more information about taking an Investment Advisor to an arbitration or to court from a lawyer.
Investment Advisors can help you decide where and how to invest your money. Often, they can help you work out the best investment strategy for your individual situation. You can find an Investment Advisor at an Investment Dealer firm, or on the Legal Line Guide or website.
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