Funds offer plenty of benefits to busy investors. Here's what you need to know after you add them to your portfolio.
After you buy mutual funds, your mailbox will be flooded with even more paperwork. For each fund you own, you'll receive semiannual and annual reports, newsletters from fund companies, updates from fund managers and tax forms. Actually, you can toss most of what you receive.
Here's a list of investment-related paperwork you need to hang on to permanently:
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
All your income-tax returns. But you only need to keep supporting tax documents — including 1099s and other investment and tax information — for three years after you file. After three years, you can be audited only if you've underreported your income by 20% of more or have committed fraud.
Records of all retirement-plan contributions, distributions, conversions and rollovers.
Records of the purchase of securities you haven't sold yet, regardless of whether you bought them or received them as gifts. Keep these records for three years after you sell the securities.
Track your investments
Consider setting up an online portfolio tracker, or look for personal finance software that includes one of these handy tools.
At the very least you'll want to record the date you purchased the shares, the number of shares you bought and what you paid per share. This information will be critical when you decide to sell (see Hang onto your profits).
Even though you have access to online quotes, avoid obsessing over daily price swings.
Reassess your plan annually to make sure your returns are keeping pace with expectations. Also make sure that hot gains in one fund or lagging returns in another have not thrown your portfolio out of whack.
Know when to sell
But if your fund trails other similar funds for two or three years, it's probably time to consider moving on.
Other possible reasons to sell include:
A new manager. Look at the newcomer's background. Maybe he or she has managed a fund before and is worth a chance. But remember, when a fund changes managers, its track record goes out the window.
QUIZ: Test Your Investing IQ
Too many assets. Funds that invest in small companies have a way of losing steam as they grow larger -- certainly when they bloat to $2 billion or $3 billion in assets. As money pours in, be prepared to look for a similar fund with a smaller asset base.
-
The Most Popular Apps for Retirement Planning in 2025A J.D. Power survey ranks retirement planning apps based on customer service and satisfaction. Does your financial app make the cut?
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary FormsStandard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
The Most Tax-Friendly States for Investing in 2025 (Hint: There Are Two)State Taxes Living in one of these places could lower your 2025 investment taxes — especially if you invest in real estate.
-
Trump's Economic InterventionThe Kiplinger Letter What to Make of Washington's Increasingly Hands-On Approach to Big Business
-
AI Start-ups Are Rolling in CashThe Kiplinger Letter Investors are plowing record sums of money into artificial intelligence start-ups. Even as sales grow swiftly, losses are piling up for AI firms.
-
What is AI Worth to the Economy?The Letter Spending on AI is already boosting GDP, but will the massive outlays being poured into the technology deliver faster economic growth in the long run?
-
Kiplinger Special Report: Business Costs for 2026Economic Forecasts Fresh forecasts for 2026, to help you plan ahead and prepare a budget on a range of business costs, from Kiplinger's Letters team.
-
Trump-Era Regulations Will Broaden Access to CryptoThe Kiplinger Letter The president wants to make the U.S. the leader in digital assets.
-
Breaking China's Stranglehold on Rare Earth ElementsThe Letter China is using its near-monopoly on critical minerals to win trade concessions. Can the U.S. find alternate supplies?
-
America's Surprising Strengths in Manufacturing and ExportsThe Kiplinger Letter Despite common perceptions that the U.S. doesn't build things anymore, American factories are still hard at work. A special report from The Kiplinger Letter.
