So you have some spare cash and you want to become an investor !

Where do you start?

With literally 1000''''s funds and investment products to choose from, based in many different currencies and markets all over the world, choosing the most suitable investment funds is a daunting task, even for seasoned professionals.

Most new investors look towards the funds that have performed well over the last 6 to 12 months and ignore all the other funds further down the league table. Why? Because all investors want the best return for their money; so new investors are attracted to the funds that are currently flying high, not wanting to miss the boat and the high returns on offer.

Unfortunately, this approach normally leads to a disaster!

It is not uncommon for the best performing fund in any sector to be languishing in the lower half of the league table the following year, after posting major losses. This leads the new investor to panic and sell his investment at a loss, and to return to deposit based savings.

It is a sad fact that almost 75% of funds do not outperform the performance of their relevant benchmark.

(A benchmark is the average return of all funds within a sector of funds. If the benchmark performance for US mid-cap equity funds was say 10% for the last 12 months, it would indicate that the average return of all US mid-cap equity funds was 10% over the last 12 months. Within this benchmark there will be many funds that under perform (return far less than 10%) and some that outperform the benchmark).

From the above you can see that many fund managers do not add value for their clients.

Therefore as an investor you should aim to invest in funds that have consistently met or outperformed their relevant sectors benchmark. In doing so, you will be investing with fund managers that add true value.

Benchmark performance is only one of the many factors you need to consider when considering any fund.

So how do you learn which are the most suitable funds in which to invest?

Just by reading this far you are starting to think like a professional investor, as with any investment you need to ask all of the right questions and have access to all of the relevant information to base your "shall I invest or walk away" decisions.

The whole process of fund selection is far beyond the scope of this new investor intro page. We do however advise all new investors to read through all of the new investor pages before carrying on any further.

If you still require assistance with your investment decisions, you should seek the advice and support offered by a qualified and experienced investment advisor.

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