[header] How to compare mutual funds [title] Assess your risk tolerance. [step] All investing carries some level of risk, but some investments are riskier than others. Funds that offer higher potential rewards also tend to carry the highest levels of risk.
[substeps] Your risk tolerance depends on how much money you can afford to lose, and how long you plan on holding your investments. You may have a higher risk tolerance if you have a high regular income or a lot of other assets, and aren't as dependent on your mutual fund investments for income.