As the man said, "I've got some good news and I've got some bad news. What do you want to hear first?" It was replied, "Tell me the good news first". The good news is that they are going to make some changes in the mutual fund industry reporting to help the investor and the bad news is it isn't going to make any difference in your bottom line.
It seems that us small investors are getting the usual window dressing to make it seem that we are getting a good deal, but when you go in the store to try on the merchandise it still doesn't fit any better.
Here is what the Securities and Exchange Commission passed as a new regulation for registered mutual funds. Instead of 50% of the Board of Directors being from outside the company they now must select 75% from outside the company. Can anyone tell me what difference that is going to make? The guys who own the fund will pick people who are friendly to their goals. Will they care any more for the investors than they do now? Window dressing.
One new regulation I do agree should help a little (but very little) is the requirement to provide more information to shareholders about their contracts with investment advisors and how they are approved. Big deal. The mutual fund industry said this will raise their costs. How? They have the information. All they have to do is add it to their prospectus. Also remember that the prospectus was written for the Dilbert lawyers at the SEC to meet the regulations and not to give you understandable information.
Do you remember what happened to your funds from 2000 to 2003? Most investors lost from 40% to 60% of their money. Let's hope they don't hire back those same analysts again, but they probably will. Just their contracts will be different. It is doubtful their results will change.
Furthermore these new fantastic, wonderful rules (sic) will not go into effect for 18 months. I guess as one of the 95 million mutual fund owners I will have to wait, but I'm not going to hold my breath.
What I did not hear from the SEC was that mutual fund managers should be paid on performance of how well they do with your money. Now they get paid by how much money they have or can get and keep in the fund. Sounds backwards to me. See if you can get your broker to refund all commissions if your fund does not make money. Don't hold your breath on this one either.
Eighteen months from now investors are going to feel a lot better when all that good news goes into effect. Yeah.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
Copyright 2005
![]() |
|
![]() |
|
![]() |
|
![]() |
For the last 12 years we have seen the Japanese... Read More
Well maybe that's overstating it a little, but it's certainly... Read More
Recently I was invited to appear on a live CNNfn... Read More
For the last few weeks we have seen the stock... Read More
This is the continuing story of our two imaginary traders,... Read More
How do you invest? What do you really pay? At... Read More
THERE'S SOMETHING TO BE SAID FOR standing firm in the... Read More
Most advisors will tell you they can beat the market.... Read More
Everyone who invests in the stock market wants to be... Read More
Every broker and financial planner will tell you that you... Read More
All of the talking heads have been telling us that... Read More
When it comes to buying a stock or mutual fund... Read More
Three little pigs went to the market to stock up... Read More
What is leverage?Here is a definition of leverage from an... Read More
Jack and Jill went up the hill to fetch a... Read More
How many times have you said to yourself, "I'd like... Read More
If you are serious about making and keeping money by... Read More
There is nothing more exciting than finding an undervalued stock... Read More
Most stock market traders have a favorite technical indicator.The one... Read More
04/28/2005NASDAQ dropped -12.5% year to date in 2005. S&P500 index... Read More
If you go to Haiti or other places in the... Read More
In November of 2000 when the NASDAQ was trading at... Read More
Stock trading can be a very profitable activity. You can... Read More
When the stock market is going up and all your... Read More
This article describes the model of a natural relationship between... Read More
Every day I hear from the "experts" on CNBC-TV and... Read More
I have been trading for several decades and was an... Read More
You have heard about a particular mutual fund from a... Read More
Who are the successful investors?There are those who follow the... Read More
Before you buy another car you walk around the lot,... Read More
On Monday, November 25, 2000 Investor's Business Daily listed on... Read More
What a great statement!I just heard someone use it in... Read More
You have decided to buy some stock or mutual funds,... Read More
One of the main reasons many of us get into... Read More
What is the Series 7 Exam? If you... Read More
When you invest in the stock market for ever-increasing cash... Read More
Just about everything you have been told about Social Security... Read More
If you go to Haiti or other places in the... Read More
Ever jumped out of an airplane? It's OK if you... Read More
When the stock market is going up and all your... Read More
I often play a little game with myself when I... Read More
Both the stock market and oil prices rallied recently, which... Read More
Fundamental analysis.Fundamentals analysis says the best way to predict the... Read More
It is commonly reported that the stock market averages about... Read More
One of the great "secrets" of successful people is discipline... Read More
Picture one of those clubs where only the real heavyweights... Read More
When it comes to buying a stock or mutual fund... Read More
You should ignore analysts on TV, the radio, the newspaper... Read More
Today we are inundated with tons of information about the... Read More
On Friday or Saturday evening my wife gets a movie... Read More
Recently I watched my favorite football team lose a vital... Read More
There is so much involved in developing peak performance, that... Read More
∙ Make every investment in the stock market a long-term... Read More
Let's hope you did not have any of the Enron... Read More
Many people would like to diversify their portfolios to expand... Read More
Four blind men were asked to give a description of... Read More
It takes a total mental commitment to the task. It... Read More
We keep hearing about this bear market and that the... Read More
(1) CHK stock price $16.74, NAV $32.5CHK is my favorite... Read More
The debate rages all over Eastern and Central Europe, in... Read More
When an individual investor wants to roll up his sleeves... Read More
The stock market has not been very kind to your... Read More
So you're started trading, you bought some positions with your... Read More
Ever turn down a street, get half way and suddenly... Read More
We learnt the following the hard way! If any of... Read More
Profitable day traders recognize that momentum trading is among the... Read More
Stocks & Mutual Fund |