 Ask The SEC |
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You see mutual fund managers are paid not on performance, but on how much money they have in the fund. Unfortunately that also applies to many mutual fund managers especially when you look at the performance of the majority of funds for the year 2000. Maybe it is time someone had the SEC look after the interests of the small mutual fund investors. My readers know that I am a believer in the purchase of mutual funds for investment and retirement accounts. They make the regulations that all stock exchange listed companies, brokerage houses and mutual funds must follow.
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| Mutual Fund Selection Made Simple By Indexing! |
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Fund managers claim that this hampers their performance instead of admitting that they are in the business just to clip you for high fees while the mutual fund under-performs the general market. Non-indexed mutual funds try to keep it secret that actively managed mutual very funds rarely do better stock market indexes. That is certainly not the attitude I want the manager of my retirement to have! You should be asking your self why the mutual funds don't just mimic the same portfolio stock composition as a major index like the S&P 500 stock market index. For this reason I strongly recommend that if you can only buy mutual funds as in the case of the 401(k) then restrict your purchases to indexed funds like the Vanguard 500 (VFINX. The truth is that the big killer is the herd mentality of active fund managers.
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| Missleading Fund Names Wreak Havoc On Investor Returns! |
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Mutual fund managers use fake fund names to part you from your money such that you cannot judge what a fund does by its name. The 80% rule still allows mutual funds to invest in just about anything up to 20% of holdings. More than five hundred funds have had to change their names because they failed the 80% rule. Many funds have names that are outright misleading or even deceptive. As of July 2002, the SEC requires funds to have at least 80% of their assets in securities that their fund name implies, up from 65% previously.
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| A Safe Port For Mutual Funds But Not You! |
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Soft dollars, a form of legal kickback, is a sly way you can get ripped off by mutual fund managers. The legislation allows fund managers to pay more in commissions than is necessary, as long as the excess comes back in the form of services or research that benefits investors. You buy a mutual fund to secure your retirement. The second problem is that many funds are not taking advantage of cost saving efficiencies in their operations just so that they can keep the soft-dollar spigot open. His 1998 articles in Technical Analysis of Stocks and Commodities were prophetic in predicting an impending stock market crash.
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| Exchange Traded Funds |
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To buy a mutual fund you must wait until
the end of the day to find out what price you
paid. The expense ratios of most
mutual funds runs about 1. Fund managers tell you it is to discourage
overnight trading that adds to their expenses
and therefore penalizes shareholders, but that
is not true. The mutual funds who tell you it
is too expensive to price their funds more than
once a day are either lying or stupid. Over the next few years as more and more
investors discover these advantages they will be
buying ETFs in preference to both load and
no-load mutual funds.
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| The Perfect Mutual Fund |
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In the perfect Mutual Fund, when prices of your stock holdings in the Fund decline, the cash dividend income from the Fund simply accelerates. The perfect Mutual Fund would benefit you and your family and no one else. The perfect Mutual Fund would require a savings plan to add to your holdings every quarter, until retirement. Other than the obvious fact that your money is being spread too thin, any dividends from the companies in the Fund could possibly be eaten up by management and other Mutual Fund fees. In the perfect Mutual Fund your money is not spread too thin.
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| Is Your Mutual Fund the Right One for You? |
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For those who're new to this investment thing, let me apprise you with 'load' and 'no load' mutual funds. But you've over 10,000 mutual funds to choose from. Mutual Funds are considered to be one of the best investments one can get hands on. The investors get to choose the funds on their own, the way in which it happens with the 'no load' mutual funds, as they are free from charges. Moreover, 'load' mutual funds consist of front-end charges, back-end charges, or deferred charges.
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| Mutual Fund Returns May Not Be As They Seem! |
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Arthur Levitt, during his tenure at the SEC, experienced many cases where the non-indexed mutual fund manager bought shares for their own accounts before the fund bought the shares. When senior managers of Van Kampen decided to sell the fund to the public some 15,000 people invested $100,000,000. This information caused the fund-rating service Lipper Inc to report the mutual fund as the top performer in its class, a full 20% ahead of the second-best performing fund in the category. A mutual fund run by Van Kampen Investment Corp. But investors weren't told that the excellent returns of the Van Kampen fund were on tiny assets of $200,000.
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| Trend Following |
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The best place for your money is in a no load mutual fund (that's no commission) or an ETF, Exchange Traded Fund (a type of mutual fund that trades like a stock. There are many places on the Internet that rank mutual funds by performance such as Yahoo. It puts you in stocks and mutual funds that are going up and gets you out when they start down. Performance means it is going up more and faster than all other mutual funds. A fund has a professional money manager who should be capable of buying good stocks.
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| Caveat Emptor: You May Owe Taxes Despite 401(K) Losses! |
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The mutual fund has to sell off stock to pay the investors who leave. One among many ways you lose money in non-indexed mutual funds is the tax trap. There are a couple of reasons why mutual funds pay taxes. The best way to avoid these taxes altogether is to restrict your purchases of mutual funds to your 401(k) and try to only buy indexed mutual funds such as the Vanguard 500 (FINX. You may have to pay taxes even when your mutual fund loses money! To many people this is painfully unexpected.
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| The Past Does Not Equal The Future: Mutual Fund Returns! |
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Mutual fund managers try to outsmart the market in the short term instead of patiently waiting in the long term where it is more likely to correctly determine if stocks are high or low. A way that investors get ripped off and in a sense rip themselves off is based on the culture of performance in the mutual fund industry. His 1998 articles in Technical Analysis of Stocks and Commodities were prophetic in predicting an impending stock market crash. He has helped many people become profitable investors by teaching them to look out over many years to spot stocks that are low and primed for rise in the new bull market. His second article met with approval by Dr.
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| Seven Investment Terms Everyone Should Know |
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Mutual funds are easy and cost efficient, since you are not responsible for making the decision as to where to invest the money. The mutual fund is handled primarily buy a person known as the fund manager. The goal is to obtain money from interest to the debt. One would buy stocks from a company at a given price in hopes that the company would gain a significant amount of money and that they would be able to sell the stocks at a higher price. The benefit of the Money Market Account is that they offer very low investments of less than $1.
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| How to Invest Overseas - Intelligently! |
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A buyer can purchase one fund which may hold dozens of different stocks that the fund managers have researched. Mutual funds simplify the process of investing overseas. Like the index funds above, country funds focus on a particular market. Some examples are the Swiss Helvetia Fund, the Brazil Fund, or the New Ireland Fund. The difference is that these funds are actively managed, and may often be available at a discount to the value of their shares.
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| What My Horse Had For Breakfast |
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Kinda reminds me of what my broker (horse trainer) told me to do when I was selecting a mutual fund to buy. All I wanted him to do is come in first and I can't say I'm crazy about that mutual fund either. That fund has a 5-star rating, is managed by one of the great names on Wall Street and has 60 of the best known company stocks I can think of and yet it is going down. He said to check out what was in the fund (the mixture of stocks, like my horse's breakfast) and to see if there was a good fund manager (the jockey. Will knowing all that stuff make me any money? I always figure that if I can find it out it isn't worth knowing any more because that information is already reflected in the price of the stock or mutual fund.
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| Invisible Mutual Fund Fees Erode Your Returns! |
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Mutual funds have no interest in educating investors because it is easier to hoodwink the ignorant. Many mutual funds are able to cheat the public with excessive fees because investors don't understand how these big costs destroy their profit. Many investors think that investing in mutual funds is free. Don't put your trust in mutual funds unless they are fully indexed. Indexing means that the mutual fund simply uses a computer to buy and sell stocks in the mutual fund portfolio so as to mimic the composition of a major stock market index like the S&P 500.
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