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I’ve spent the last week researching mutual funds, trying to figure out what to do with the money in my IRA. I had switched it from being with a certified financial planner that I’d become very dissatisfied with, to an IRA account at Zecco. I still don’t feel completely confident in what I’m doing (especially when it comes to asset allocation) but I’m learning.

Since I already have a mid cap fund and some treasury bonds, and since my only decent 401(k) fund choices were mostly U.S. large cap funds, I decided to focus on finding some good small cap and international funds for the IRA at Zecco. I also couldn’t resist another large cap fund.

I used Morningstar to do most of my research, along with looking at various articles about the funds after I’d narrowed them down. I looked for funds with pretty charts and a long positive track record (usually 10 years or more). I tried to find funds that had the same manager(s) during that entire time, or at least not a recent manager change. I also compared them to other similar funds of the same type and against their indexes too. Finally, I looked at the alpha, beta & R-squared for each fund. I did all this for various time periods. I’m sure there are other factors I should have looked at, but that’s what I did.

I considered several index funds and ETFs as well, but they just didn’t appeal to me as much as the other funds. I keep reading that index funds are supposed to be solid choices, and I suppose I will eventually invest in some, but for now I’d rather stick with mutual funds. I can’t explain it, but when in doubt, I go with my gut.

In the end, I went with 6 different funds. I think that my choices make me a pretty aggressive investor. It’s kind of funny, when I was looking at individual funds, only one of them looked terribly aggressive to me. (And I didn’t go with that one.) But when I put all of my choices together and looked at the overall allocations, the result matched up with an aggressive portfolio. Which I guess is OK, because when I take the tests that tell you what type of investor you are, that’s exactly how I come out.

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