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Lipper

The right number of mutual funds to own

- Alan Lavine and Gail Liberman



How many funds should you own? Six is enough. You can invest in index funds that track large, small company and foreign stocks. Plus, you can invest in money fund, bond fund and precious metals fund.

What to keep it simple? Invest in a balanced fund that has 60 percent in stocks and 40 percent in bonds. You really don't need any other investments. Where is the best place to find information about mutual funds? Mutual fund families with excellent websites include Vanguard, Fidelity Investments and T. Rowe Price.

How often should you monitor your funds performance? It's best to review your fund's performance monthly. Quarterly is Ok.

When should you sell a fund? It's a good idea to sell when a portfolio manager that is doing a great job leaves. Also consider selling when the fund underperforms similar funds by a wide margin over a few years. But first ask the fund group what happen. When small company stocks, for example are out of favor, your fund that invest in small company stocks will under perform. You may need to make adjustments if you financial condition changes.

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Spouses Gail Liberman and Alan Lavine are syndicated columnists. Their latest book is "Rags to Retirement (Alpha Books)." You can e-mail them at MWliblav@aol.com.


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