Mutual funds base their investment strategies on the long-term so an investors putting money into this kind of assets should expect profits in the long-term. A reasonable investment horizon for mutual funds is at least 6 months. After this amount of time investors can expect an acceptable rate of return. Short-term investing in mutual funds means putting money for a period shorter than 6 months. In my opinion, such investments are not logical since an eventual rate of return might not cover the costs of capital management of a mutual fund. This applies to all kinds of mutual funds so no one should invest for a period shorter than half year.

Although I am not a fan of short-term investment in mutual funds, one can make money on this. Investors, who want to take the risk, should get interested in hedge mutual funds. This kind of mutual funds make money on both increases and declines of the market and in the current market situation it can be very profitable. The Polish WIG20 is close to a historic all-time high. American and Asian markets are near record highs so one can expect a correction movement, which should be a blow to mutual funds investing in stocks. Also, prices of commodities are still high (oil at its highest level in history) and declines are just a question of time. Hedge funds can take advantage of this situation and make money for their clients.

When choosing now a mutual fund investors should take into consideration the long-term results of each fund (at least the last 12 months) and the asset classes those funds invest their capital in. Analyzing the results of mutual funds this year one can learn about the strategy chosen by the mutual fund chief manager. The current year is pretty difficult for the financial markets so positive results of such mutual fund could attract new investors. Also important for players should be the asset classes and markets mutual funds invest in. Mutual funds investing in Polish bonds can fear an interest rate increase and stock mutual funds should take into account a correction movement on the stock markets.

One has to remember that mutual funds are not for short-term investing. Their goal is to achieve safe profits in a longer time horizon. Aggressive investing through mutual funds misses its idea since it carries a lot of risk and the results might not be satisfactory. Investors, who like betting (and big money!) should focus then their attention on the stock derivatives markets.

Adam Narczewski