Comments on: The Real Benefit From Mutual Funds http://www.thefinancialblogger.com/the-real-benefit-from-mutual-funds/ This is where your finance takes place Fri, 10 Oct 2008 23:14:41 +0000 http://wordpress.org/?v=abc By: Carnival of Personal Finance #150 http://www.thefinancialblogger.com/the-real-benefit-from-mutual-funds/#comment-2359 Carnival of Personal Finance #150 Mon, 28 Apr 2008 12:58:36 +0000 http://www.thefinancialblogger.com/the-real-benefit-from-mutual-funds/#comment-2359 [...] Financial Blogger writes about the real benefit of mutual funds. Despite the argument here, I still like ETFs [...] [...] Financial Blogger writes about the real benefit of mutual funds. Despite the argument here, I still like ETFs [...]

]]> By: The Financial Blogger http://www.thefinancialblogger.com/the-real-benefit-from-mutual-funds/#comment-2354 The Financial Blogger Sun, 27 Apr 2008 20:41:28 +0000 http://www.thefinancialblogger.com/the-real-benefit-from-mutual-funds/#comment-2354 Right... I can't write ;-) ETF :-D Right… I can’t write ;-) ETF :-D

]]> By: Lazy Man and Money http://www.thefinancialblogger.com/the-real-benefit-from-mutual-funds/#comment-2353 Lazy Man and Money Sun, 27 Apr 2008 20:37:10 +0000 http://www.thefinancialblogger.com/the-real-benefit-from-mutual-funds/#comment-2353 By EFT's don't you mean ETF's? By EFT’s don’t you mean ETF’s?

]]> By: Customers Revenge http://www.thefinancialblogger.com/the-real-benefit-from-mutual-funds/#comment-2334 Customers Revenge Tue, 22 Apr 2008 14:01:34 +0000 http://www.thefinancialblogger.com/the-real-benefit-from-mutual-funds/#comment-2334 Probably there are a few managers that are good and deserve their 2% or 3%. However, your article talked generically of mutual funds, and the generic group of mutual funds are not very good for the reasons that most people already know. Market beats them in the long run, even those who show several years in a row are just lucky, survivorship bias favours the lucky, etc. Why not just recommend Helen Bond or McLean Budden instead? Someone might read your story and go to their banks to buy mutual funds :) Probably there are a few managers that are good and deserve their 2% or 3%. However, your article talked generically of mutual funds, and the generic group of mutual funds are not very good for the reasons that most people already know. Market beats them in the long run, even those who show several years in a row are just lucky, survivorship bias favours the lucky, etc.

Why not just recommend Helen Bond or McLean Budden instead? Someone might read your story and go to their banks to buy mutual funds :)

]]> By: The Financial Blogger http://www.thefinancialblogger.com/the-real-benefit-from-mutual-funds/#comment-2326 The Financial Blogger Tue, 22 Apr 2008 00:58:08 +0000 http://www.thefinancialblogger.com/the-real-benefit-from-mutual-funds/#comment-2326 CR; If you take a fund manager like Helen Bond for example; over the past 12 years, she beat the TSX by 3% (annualize) with less volatility. It is rare, but it does exist. This is why you must make your research carefully. Mclean Budden did the same thing with the S&P 500... CR;
If you take a fund manager like Helen Bond for example;
over the past 12 years, she beat the TSX by 3% (annualize) with less volatility. It is rare, but it does exist. This is why you must make your research carefully.

Mclean Budden did the same thing with the S&P 500…

]]> By: The Financial Blogger http://www.thefinancialblogger.com/the-real-benefit-from-mutual-funds/#comment-2322 The Financial Blogger Mon, 21 Apr 2008 16:10:47 +0000 http://www.thefinancialblogger.com/the-real-benefit-from-mutual-funds/#comment-2322 CC; and then you have to live with the fluctuation. I completely agree with your point, the problem is that people can live with EFT's when they are up and they sell the minute they go down 10% ;-) CC;

and then you have to live with the fluctuation. I completely agree with your point, the problem is that people can live with EFT’s when they are up and they sell the minute they go down 10% ;-)

]]> By: Canadian Capitalist http://www.thefinancialblogger.com/the-real-benefit-from-mutual-funds/#comment-2321 Canadian Capitalist Mon, 21 Apr 2008 15:11:50 +0000 http://www.thefinancialblogger.com/the-real-benefit-from-mutual-funds/#comment-2321 Let's not make a virtue out of necessity. Mutual funds tend to hold some cash but an index investor can achieve the same thing by splitting her portfolio into cash, bonds and equities and lower the volatility. Why would you pay a manager 2% or more on the cash portion just because you want lower volatility? "Chance to beat the market". Yes, definitely. But a high probability of lagging the market too. "you are ready to do your research carefully". I don't know what research you need to do. You pick a suitable index and buy the lowest cost fund to track that index. End of story. Let’s not make a virtue out of necessity. Mutual funds tend to hold some cash but an index investor can achieve the same thing by splitting her portfolio into cash, bonds and equities and lower the volatility. Why would you pay a manager 2% or more on the cash portion just because you want lower volatility?

“Chance to beat the market”. Yes, definitely. But a high probability of lagging the market too.

“you are ready to do your research carefully”. I don’t know what research you need to do. You pick a suitable index and buy the lowest cost fund to track that index. End of story.

]]> By: Customers Revenge http://www.thefinancialblogger.com/the-real-benefit-from-mutual-funds/#comment-2318 Customers Revenge Mon, 21 Apr 2008 13:10:14 +0000 http://www.thefinancialblogger.com/the-real-benefit-from-mutual-funds/#comment-2318 I don't understand this article ... how do mutual funds have both less volatility and higher performance? Remembering my MBA finance, volatility and returns move in the same direction. To get high performance you need to get into something more volatile. Of course, it is very very easy to get into something MORE volatile with LOWER returns, which is where I consider managed mutual funds compared to the market. I honestly don't know how ETFs work and why anyone would buy those over an index fund. What about the transaction costs? MER still applies too no? If you know enough to get into sectors like resources, or developing economies, then learn a little more and get into specific companies. With even 50K you could get a 10K stake in 5 equities, which is more than enough to find some decent and diverse exposure. Keep the rest invested in indexes. I don’t understand this article … how do mutual funds have both less volatility and higher performance? Remembering my MBA finance, volatility and returns move in the same direction. To get high performance you need to get into something more volatile. Of course, it is very very easy to get into something MORE volatile with LOWER returns, which is where I consider managed mutual funds compared to the market.

I honestly don’t know how ETFs work and why anyone would buy those over an index fund. What about the transaction costs? MER still applies too no?

If you know enough to get into sectors like resources, or developing economies, then learn a little more and get into specific companies. With even 50K you could get a 10K stake in 5 equities, which is more than enough to find some decent and diverse exposure. Keep the rest invested in indexes.

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