Should one build mutual fund investment portfolio based on return only?
Good question. The short answer is no. Ron has the best answer here, but there are a variety of reasons that you do not want to base your investment decisions based solely on return (see link below). The biggest one is that different asset classes do well at different times. The best asset classes over the last 3-5 years will in all likelihood NOT be the best ones in the next 3-5 years. NOBODY knows which funds (or asset classes) will perform best in the future – anyone who tells you otherwise is selling something. Instead, you should focus on low-cost funds that meet your objectives, and focus on funds WITHIN those categories that perform well on a risk-adjusted basis, compared to other funds in the same class (no need to pick only the “best” – just be sure the fund(s) you choose are in the top 25-50% in their category). If you’re just starting out, start with one or two good core funds, like index and/or target-date funds. I suggest using a fund family that has low fees, a good selec
