If your fund falls behind its peers for two years or more, consider selling. Every stock and bond mutual fund has an investment style. For example, one fund might target small company stocks, while another fund might invest in longer, high-quality bonds. Even if the fund manager hasn t changed, your fund s investment style may have shifted. If you don t feel comfortable with the new style, consider another fund with a more compatible style.
Some funds perform well when they re relatively small, but stumble as they grow large.
Some funds are managed efficiently, while other funds spend too much, ultimately reducing your investment return. Foreign stocks used to be exotic investments. Now, you may want to consider having at least a portion of your mutual fund portfolio in non-U.S. companies. You can buy a fund that invests in companies around the world, in certain regions, or in individual countries. Perhaps you recently got married or had a child.