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Sanuk Canuk

^ Sounds like you have all the basis covered, I like to go for value based funds over growth and I like dividend funds over income but I have a bit of each. I am not a big believer in sector funds but you can make a fortune with them. I also like index funds though I am not sure if they are better or worse than an ETF.

Storekeeper

I'm not sure that "choosing funds carefully" is going to really influence their performance mate

But seriously. Instead of making the negative comments about people who choose or use mutual funds maybe you should gie them credit.

I mean, lots of people understand simple things like dollar cost averaging. It's amazing how you can invest in things a little at a time like buying bonds, mutual funds, whole life policies, rental property and collectibles and wake up one day 15, 20, 30 years later and have a hell of alot more than you realized.

Lost of people have "chosen carefully" and still lost their shirts.

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Milkman

That's because people need to move things around.

Sanuk Canuk

I think many folks who do this don't really know what they are doing. If I "choose carefully" and buy a bunch of sector funds or buy all my funds in one asset class then I will do poorly even if I pick the best of the bunch. The real key is to diversify across asset types, geographic areas etc.

I am way too overweight in Canadian funds right now but I will rebalanced stuff out when I sell my house, then I should be truly diversified and I would expect 9-10% long term growth (pre-inflation). I hope I will get 10-12% but 9-10% will do.

Milkman

^ Yes, Sanuk.

If someone "chooses carefully" they don't lose their shirt.

The old mantra of "diversification" is boring but needed. Different sectors, sizes of Caps, and geographical areas. And dumping fund to go to cash and/or move to another fund.

Butterfly

the problem with country diversification in investment is that everything is interconnected now. Not much diversification after all. When NY falls, Japan, HK, Europe, and everybody else follow.

Milkman

^ Agree.

So many things are interconnected.

Domestic, international, and different sectors can be.

Possibly because of computers it creates an even easier sheep mentality to go into and out of something.

So many are "diversified" into the same things.

Is this....diversification? I'm not sure.

Real diversification means investing out of the financial markets (e.g. Real Estate) all together.

man with no head

Land is about the only commodity I can think of that fluctuates on a local level and is sort of immune to global problems. Certain places will always have expensive land even when the economy tanks (Bay Area, LA, NY, Tokyo, Taipei, Seoul, etc).

Storekeeper

How many of you even bother to research if your fund manager is even invested in the fund managed ?

Nobody has said anything that can't be read in a variety of magazines. And anybody who bothers to read a few is armed with the same knowledge anybody has espoused here.

Mutual funds aren't about making money overnight anyway ... they're about being an investment vehicle for those who can put their money in something long term. And as mentioned for those who don't have a large sum to invest all at one time.

Milkman

I'd rather that a fund manager didn't. I look at the 10 year returns, although they don't reflect future potential. When managers change is when one should take notice on the manager.

This is common. There's not point in getting too deep with mutual funds.

I know. This is what I've been saying.

Storekeeper

You can be as careful as you want but you can never anticipate when a guy like Marcinko will jupm ship from a company like Janus to start his own funds.

Your "carefully" selected fund becomes questionable over night.

Milkman

Agreed.

And there are hidden fees in many of these jerk-off funds.

Storekeeper

What was that fiasco with almost all mutual funds a few years ago ? I vaguely remember they were all fuggin' us somehow.

Like I said ... I'm bailing out of all of mine. October 1st is my bail date and that's it. I bailed on two last year and one a couple of years ago. One of the funds I'm bailing has these statistics:

** 9.29% return for 2006
** 26.29% return in the last 18 months
** 9.55% return during the 15 years I've had the fund.

(An American Century Fund)

Butterfly

Actually doesn't make sense really. Fund managers would have to disclose all kind of silly things to the SEC if they do. Not worth it. Unless they know they are going to floor everybody else, a bold prediction they couldn't make if they are professionals.

Milkman

Almost 10% over ten years is respectable, SK.

On a macro-note: here's an article on wages and productivity in recent years:P

Link:Real Wages Fail to Match a Rise in Productivity - New York Times

man with no head

Democrats hire firm that pays sub-standard wages to campaign for...raising the minimum wage.

The Daily Page: Document Feed

Can't. Stop. Laughing.

Storekeeper

For my boy surely a sadsack :

How About That...

By Matt Margolis


So much for the Democrats' claims that Bush's tax cuts were for the rich. According to this article at OpinionJournal.com, "the Bush years compare very well by tax and income equality to the sainted Clinton era."

...[T]he new data show that the bottom 50% of Americans in income--U.S. households with an income below the median of $44,389--paid a smaller share of total income taxes in 2004 (3.3%) than in Bill Clinton's last year in office (3.9%). That 3.3% is the lowest share of total income taxes paid by the bottom half of earners in at least 30 years, and probably ever. The majority of American families with an income below $40,000 pay no income tax at all today, and many of them also get a welfare subsidy from the Earned Income Tax Credit that effectively offsets much of what they pay in payroll taxes.
By contrast, Americans with an income in the top 1% paid 36.9% of all federal income taxes in 2004, down slightly from 37.4% at what was the height of the dot-com boom in 2000. But the top 5% and 10% of earners saw an increase in their tax share over that same period, with the top 5%'s share rising to 57.1% in 2004 from 56.5% in 2000. If this isn't the definition of a highly "progressive," a k a redistributionist, tax code, we don't know what is.

Will this stop liberals from claiming that Bush has only been good for the rich? No. Of course not. They still can't admit the economy is in good shape.

man with no head

I think it's wrong to tax people at a higher rate simply because they have more.

Everyone should pay the same rate.

I'll bet that scares the hell out of you.

Butterfly

^ is the economy in good shape at the bottom of your ship ? I bet it is.

Storekeeper