Comments on: Risk of selecting a poor mutual fund

By: Life Insurance

Life Insurance — Sun, 13 Dec 2009 22:47:37 +0000

What is wrong with good old fashioned Guaranteed Interest rates as part of an investment in these speculative times?

By: Intelligent Speculator | Financial ramblings

Intelligent Speculator | Financial ramblings — Sun, 13 Dec 2009 21:52:16 +0000

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By: Plan B Economics

Plan B Economics — Sun, 13 Dec 2009 07:38:04 +0000

Research has shown a couple of things:

1. Manager outperformance is random. In general, managers will outperform some years and underperform other years. Very few consistently outperform over time.

2. It is impossible to forecast manager performance. This basically means that investors buy funds and hope for the best.

3. MERs eliminate any outperformance over time.

By: Brendan

Brendan — Sat, 12 Dec 2009 18:35:39 +0000

Criminal. A MER of 3.48 for that kind of performance?

The TD e funds are looking better everyday.

By: Giveaway Reminder and Weekend Reading | Million Dollar Journey

Giveaway Reminder and Weekend Reading | Million Dollar Journey — Fri, 11 Dec 2009 10:30:48 +0000

[...] Risk of selecting a poor mutual fund @ Canadian Capitalist [...]

By: Canadian Capitalist

Canadian Capitalist — Wed, 09 Dec 2009 16:10:21 +0000

Welcome back Phil. Personally, I find myself below target on bonds, so that’s where all my recent contributions are going. If we get another market downturn, the bonds will be a source of funds to invest in stocks.

By: Phil S

Phil S — Wed, 09 Dec 2009 01:39:33 +0000

I’m normally with Doctor Stock in terms of avoiding funds and just making my own portfolio by buying stocks directly.

That said, I recently got into ETFs mainly because I don’t like stocks right now – I think we’re going to see a second dip when the governments stop juicing the market with truckloads of cash. At some point, it’s going to have to stop, or else go bankrupt a la Iceland or Dubai.

Anyways, the reason why I like ETFs is because my trading account isn’t set up to trade on the derivatives market. But, since I can buy either short or long ETFs of commodities, it’s been a wonderfully interesting new marketplace!

By: Big Cajun Man

Big Cajun Man — Tue, 08 Dec 2009 17:46:38 +0000

Now is the time to buy it then!!!

By: Canadian Capitalist

Canadian Capitalist — Mon, 07 Dec 2009 20:16:18 +0000

@Mike: I got a chuckle out of the manager of fund saying investors shouldn’t buy and hold. Here’s my response: you think? What’s surprising is this fund is still around. Isn’t it standard industry practice to quietly merge poorly performing funds?

@Doctor Stock: Provided investors can do at least as well as the benchmarks. It is all too common to find investors badly trailing the stock indexes.

@MER: “Go anywhere” in the sense that the fund can buy *any* sector of the Canadian market. Currently, the fund is mostly small cap.

@ghandy: Unbelievable. I’ve never heard of a fund underperforming by 25% annually every year for 10 years.

@Dave Lester: See my comments for @Doctor Stock.

@Daniel: I’ve never tried Interactive Brokers but that may be the broker Dave is referring to.

@TEMPLE: Ha ha.

By: Smac20

Smac20 — Mon, 07 Dec 2009 20:14:57 +0000

Most mutual funds are a joke and so is the compensation formula for fund manager bonuses. For example, the fund manger manages to perform at -20% while the market dropped by -30% so he/she gets a big bonus for doing less poorley than the market. What a joke. Bonuses should only be paid for positive performance based on making money or not making money.