You can’t open a newspaper or read a magazine without seeing ads promoting the stellar performance of “hot” mutual funds. But past performance is not as important as you may think, especially the short-term performance of relatively new or small funds. As with any investment, a fund’s past performance is no guarantee of its future success. Over the long-term, the success (or failure) of your investment in a fund also will depend on factors such as:
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Today’s Well Advised column looks at RRSPs and the Future of Mutual Funds, and adviser Preet Banerjee and a new book he’s written entitled simply “RRSPs.’ The book is aimed both at fellow advisors as well as retail investors. With 41 different RRSP strategies and tips, I’d be surprized if some of the content wasn’t an eye opener for readers. Go here for more on the book.
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NEW YORK (Dow Jones/AP) - Gold prices rose Tuesday in choppy trading, struggling to stay positive as the dollar made some headway against the euro.
June gold rose $7.60 to $699.50 an ounce on the New York Mercantile Exchange in midday trading, while July silver rose 16.5 cents to $13.500 an ounce. Even though the dollar remains down on the day, it has moved off of its low. The euro rose to a high of $1.2867 Tuesday, then eased back to $1.2815.
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Of course within the mutual fund industry, there are hundreds of choices. There are conservative funds and risky funds, domestic and international funds and funds that are composed of other mutual funds. Mutual Funds Winners & Losers. (more…)
Understanding the edge enjoyed by people who run pension money can make you a smarter investor in mutual funds.
Are you happy with how well your mutual funds are doing?
Didn’t think so. Over the long run, two-thirds of stock funds deliver less than the market as a whole - a performance most of us can stomach, barely, when stocks are doing well. But in a market as stingy as the one we’ve endured since 2000, below-average results really hurt.
So are mutual funds doomed to underperform? Not necessarily, and new research shows how you can find better funds more reliably. (more…)
The manager of this year’s top stock mutual fund — and only one that’s up in 2008 — explains how to do well in a bear market. Hint: He bought yesterday. How bad is this bear market? Out of thousands of offerings, only one mutual fund focusing on U.S. stocks is up this year. You read that right - one!
The Forester Value fund (FVALX), which invests primarily in large, blue-chip companies, is up 7.4% year-to-date. according to Morningstar. The average U.S. stock mutual fund is down 28.5%. I spoke with Forester Value manager Tom Forester this morning to find out how’s he been able to avoid the market bloodbath and what he’s doing now. (more…)
Mutual fund managers may have a conflict of interest because of the way they are paid. In particular, mutual fund managers are encouraged to make risky investments that are not in the interests of unit holders, and to over-concentrate their holdings. Mutual fund investors, on the other hand, would tend to benefit from less risky investments, and greater diversification. This article will explore this conflict of interest and its implications for investors who buy actively managed mutual funds. (more…)
This article will explain what an Exchange Traded Fund is, how to use them to manage your own RRSP, and what choices are available. We’ll also have a look at the way mutual fund companies get paid so that you can avoid paying too much. (more…)
In a new sign of market turbulence, managers of a multibillion-dollar money market fund said on Tuesday that customers might lose money in the fund, a type of investment that has long been considered as safe and risk-free as a bank savings account.
The announcement was made by the Primary Fund, which had almost $65 billion in assets at the end of May. It is part of the Reserve Fund, a group whose founder helped invent the money market fund more than 30 years ago.
The fund said that because the value of some investments had fallen, customers now have only 97 cents for each dollar they had invested.
This is only the second time in history that a money market fund has “broken the buck” — that is, reported a share’s value was less than a dollar.
This year alone, big banks and fund management companies have pledged more than $10 billion to rescue affiliated money funds that were caught holding mortgage market securities that were deteriorating rapidly in value. As a result, consumers have felt confident in the safety of money funds, and have been moving assets into such funds as markets have grown more turbulent.
The Investment Company Institute, the mutual fund industry’s trade group, issued a statement Tuesday assuring investors that “the fundamental structure of money market funds remains sound.” It noted, too, that in the only previous case of a fund breaking the buck, investors nevertheless were paid 96 cents on the dollar. (more…)