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How are your funds doing?
Investment News had an article last month reporting that most, seven out of ten, top mutual funds that are actively managed were doing worse than the market.
That means, in the first ten months of the year, if you were paying a manager of your mutual fund to pick stocks for you, the manager was doing worse than the Standard & Poor's 500 index. You could have bought an index fund and probably paid a fraction of what you paid your active manager and lost less money. Because everyone's losing money.
The winners are losing less.
The winners are not the stock pickers.
How are your funds doing? And what do you think of my cousin's idea, that your investment advisor -- your financial planner or stockbroker or whoever -- ought to see his or her pay go down when the investments they chose decline in value?
She's talking about your personal investment advisor. She thinks that person ought to be paid based on performance, not for just showing up.
Harriet Johnson Brackey, the personal finance writer for the Sun-Sentinel, has been an award-winning business...
Comments
Agree.
Most financial planners (IMHO) provide out of date advice and collect their fees. Because I believe they have little regard for their clients, I'd love to see investors abandon them in droves and choose indexing instead.
As to paying for performance, there's no way on this earth that the advisors and planners will accept that.
Posted by: Mark Wolfinger | December 11, 2008 1:05 PM
Funds are so big that they average with the market. Why buy 500 shares? Run your own strategy and pay yourself the fee. Read http://bloodhoundsystem.blogspot.com and you can empower yourself.
Posted by: Peter Gregory | December 11, 2008 2:13 PM
I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.
Deborah
http://termlifeinsurance2.com
Posted by: Deborah | December 11, 2008 10:35 PM
Harriet, the situation is worse than you portray. I did an analysis that showed that if you had bought an SP500 index fund at any time in the last 10 years, you would be under water today. There are better alternatives that take the emotion out of investing and don't require fees. The discussion is on the blog above, and in the meantime, keep writing!
Posted by: Peter Gregory | December 16, 2008 9:32 AM
i love reading your blog whenever i can, i dont often get the time these days, but usually have a quick read in my dinner break or just after i get home from work, sometimes its quite interesting reading - thanks.
Posted by: ed | February 28, 2009 3:08 AM
it'll be a long time before stocks pick up, and its still not certain that there will not be a major recession/depression.
Posted by: jenna | March 23, 2009 7:05 PM
i really love reading your website , although i just started doing overtime recently, so it is less frequent now
Posted by: jasmine | May 24, 2009 8:31 PM