Finding good mutual funds means finding good mutual fund companies (families) and some families start out more friendly to average investors than others. They offer good investments to people who are just not sure where to invest money. People get confused by all the sales rhetoric, so here we simplify where to invest with the companies that are friendly to investors.

I started following (and selling) these things in 1972 as a stockbroker, trying to figure out where to invest other people’s money…trying to pick only good investments for those who trusted me. Once I knew that mutual funds were the answer to what 90% of people needed, the question became: how do I find good mutual funds? I am writing this in 2014 as a retired financial planner and would like to share something I have learned over the years, so hold your breath.

Your idea of ​​what makes good investments or mutual funds may differ from the ideas a sales rep might have, especially if that person makes money from commissions and other fees. Breathe easy. A commission-based financial planner can tell you where to invest and can sell you good mutual funds. The problem is that he or she can’t tell you where to invest in investor-friendly companies…and make a living doing it.

A $20,000 investment in a stock fund could cost you $1,000 up front, $400 a year for expenses, and another $300 a year for additional fees if you invest through a planner. Or, it could cost you a total of $200 a year or less if you invest directly with a major NO LOAD investor-friendly company.

Really good mutual fund companies keep investors’ costs low. They are financially strong; and offer a wide selection of investments with good performance records. Good service is provided free of charge. Enter “no load funds” into a search engine to find them. Names like Vanguard, Fidelity and T Rowe Price will appear. All offer average investors good investments at low cost. The three above meet our qualifications, and the first two are the largest companies in the sector.

Good mutual funds are not expensive, and you don’t get what you pay for when you pay high fees and charges. In effect, these extra costs take money out of your account and work against you. The net result is a lower return on investment. I don’t call that investor friendly. When there is a high cost if you invest, it is not where to invest your money.

Now, once you’ve opened an account with one of our friendly companies, you could be faced with a list of over 100 options to choose from. Now the question of where to invest becomes more specific. How to find good mutual funds to invest? The general categories are stocks (stocks), bonds, money market, and balanced funds (the latter being a combination of the other three). What you need to understand is that even good mutual funds in the stock category could lose money in 2014 and/or 2015. If the stock market falls, these funds generally won’t be good investments. Also, if interest rates go up, bond funds will not be good investments. More than anything else, markets determine whether investors make or lose money. On the other hand, good mutual funds tend to outperform the rest in the long run.

With today’s historically low interest rates, money market funds don’t seem like good investments because they pay almost nothing in interest. But, that’s where you invest the money you want to keep safe. If rates rise, money market rates will follow. Balanced funds will lose if stocks and/or bonds take a big hit. Don’t be depressed. Invest in 2014 and 2015 with your eyes wide open.

Going into 2014, stock funds were very good investments five years in a row; and bond funds were good mutual funds to invest in for more than 30 years. In 2014 and beyond, things could get tough. Focus on strategy rather than choosing good investments in each fund category. Have some cash in a money market fund waiting for future opportunities when the dust settles. Spread your money across all four fund categories, because no one really knows where to invest in times of uncertainty.

As 2014 and 2015 unfold, remember that both stocks and bonds have their ups and downs. Over the long term, the funds have been good investments for tens of millions of people through thick and thin. Keep in mind that good mutual funds come from good mutual fund companies…and that’s where you should invest your money.