Price History of Mutual Funds

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Many investors purchase mutual funds to diversify a portfolio, to let professionals pick and choose, and to limit risks. Mutual-fund prices are listed in the financial sections of many newspapers and on many websites. Historical prices can be found on a fund company's website and on other financial sites.

Significance

  • When considering a fund, know the fund's objectives, risks, holdings, the managers and the price history. Price history should be a guide, not a deal breaker, as certain market conditions can result in good and bad years.

Considerations

  • Comparing the rate of return, dividends and capital gain distributions may also affect a decision and a mutual fund's price history. Price comparison will allow an investor to compare year-over-year performance to similar funds.

Types

  • Mutual funds that invest in aggressive stock and growth industries will see their prices fluctuate more than those in less-volatile sectors. Their price history may show big up-and-down swings depending on the direction and performance of the stock market.

Size

  • Some mutual funds have become so big and popular that their price movements can rise and fall to a greater degree than smaller funds in the same category. Price history may not reflect the true value or risk as the fund grows and/or the market rises or declines.

Misconceptions

  • A mutual fund's price history is not always a good indicator of how the fund will perform in the future. A good or bad year in the overall stock market has a direct impact on past, present and future returns.

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