E-Trade Superbowl Ad w/ baby and clown>
You don't see much "E-Trade" crap anymore.
In fact, if you are still doing this nonsense with your money, you are a two year old.
Posted on 02/16/2009 7:17:04 AM PST by george76
Most investors sustained serious damage to their wealth last year -- damage that, in many cases, will be difficult to recover from. Certainly Wall Street titans, reckless lenders and irresponsible home buyers all deserve their share of the blame.
But one part of the financial world has not received much scrutiny for its role in the evaporation of investor wealth, and that is the mutual fund industry.
Sadly, a gullible public has bought into the idea that steady investments in mutual funds, regardless of market conditions, is the way to make their financial dreams come true.
This is one of the biggest fallacies of investing, and why mutual funds are hazardous to your wealth.
To give you a sense of just how flawed the buy-and-hold philosophy advocated by the mutual fund industry was in 2008, just look at the numbers. According to the mutual fund industry's own Investment Company Institute, investors lost almost $3.7 trillion in mutual funds in 2008.
Yet how often do you read about mutual funds leading the public down a losing path? How often do you hear about a fund manager whose performance was drastically lower than the benchmark?
My problems with mutual funds don't stop merely at poor performance or inept fund managers. There are serious problems with mutual funds that have more to do with the design and structure of these investment vehicles.
Advocating buy-and-hold investing is the backbone thesis of most mutual funds. A fund company will never tell you to move to cash when things get tough because it's just not in their best interest. Because most mutual funds must stay fully invested all the time, their concern for managing risk is secondary to their concern for keeping you fully invested.
(Excerpt) Read more at marketwatch.com ...
Vanguard is as good as you can get in the market as far as I remember from my Bob Brinker info.
Well you just accused me and my wife and three major insurance companies of being a frauds. And our education and planning process of being too complex for you to understand. No wonder you're building your retirement on the stock market. I guess we must have some geniuses for clients.
Should I just leave before the feds knock on the door?
I used to be like you until I did my research and found something safer with a better rate of return and more liquid.
I should have read your last statement first. No use wasting time, if you don't want to know the answer to tour questions and accusations. Good luck.
Just heard barney Frank say he wants to make sure that CEO’s do not receive bonuses when risks they take fail, so as to outlaw taking unecessary risks. Good bye free enterprise system, hello gray poor socialism.
Do Americans even care that they wiped out welfare reform without telling anyone?
Was I clear? The 8% is an average with a guaranteed minimum.
If the shoe fits....just kidding. More on this below.
"In Cal they have a reinsurance program which allows other companies to take over policies."
So I'm supposed to find that inserting the State of California into my financial transactions comforting? No thanks.
"And our education and planning process of being too complex for you to understand."
Yes. I'm a CMC Econ Cum Laude grad, and can hold my own with most MAs and some PhDs in Econ. I've read the WSJ every day for 25 years. I still have no idea what most insurance people are saying. Insurance wrapped around investments is too complex for me. Therefore, most normal people, I believe, are duped into Insurance. That's not to say that a really great Financial Advisor couldn't understand it and guide people into proper vehicles. I'm just saying that virtually all the people so invested have no idea what they've been put into. Might be smart, might be stupid, but they have no idea. While that may not constitute fraud, it is really not a very nice thing to do to people.
Folks may need to insure against certain risks. Fine. Term Life is a good example of simple insuring against risk. Homeowners insurance. Straight and clean.
Separately, investments in straight and clean low cost index Mutual Funds (or ETFs for newcomers) is the prime way to invest in stock markets. Buying CDs, MMFs, and cash in bank is a simple, straightforward way of managing short cash. Individual Bonds, or Bond Funds are a simple, straightforward way of getting bond dampening of stock risk. Owning some ounces of gold or silver gets you exposure and a hedge against inflation.
Each of these classes of things are simplest to address directly. A key problem with insurance is that it wraps so many concepts into one vehicle that you can't disentagle the pure play versus the alternate component (risk mitigation, for example). By the time you have multiple components, it is also extremely easy to bury a poor performing asset, a costly structure, or more risk than the person wants or needs.
I don't have a problem with insurance. People should insure against risk. But I don't ask my banker to manage my stock investments. I don't ask Vanguard to carry my insurance. I don't ask my Gold Broker to hold my cash. I don't ask my grocer to provide me with a haircut.
I wonder why he left out the main culprits, the politicians, of both parties.
The man probably should find a new vocation....say sports writing or something
If so, then they were improperly invested.
One should match their investments to their spending obligations. If you can't stand the risk of loss (heat), stay out of the stock market (kitchen).
For your education, you show a lack of knowledge of ways to build retirement on an insurance platform. You must have missed that day in school. And the day they taught ethics about accusing people you don't know.
Your accusing people of fraud in anonymity is despicable and dishonorable, especially when you obviously are not conversant with what you're talking about or the people and companies your accusing. But hey, it's the internet, so it's okay to do anything, right?
Building your retirement on the stock market is a mistake, as far as I'm concerned. I learn from history, not ignore it.
Have fun, I have a client to defraud.
You said it, not I.
Does Old mutual have a comparison chart against the stock market since the 1920's or 1930's?
I'm not anti-term life insurance, but everything I have seen leads me to believe it is a little higher than snake oil.
Yes I have the Old Mutual info. I'm off to show some houses. I'll get back to you tonight or tomorrow.
Thank you. I will rely on this statement for myself and anyone else to form their judgments of your approach.
E-Trade Superbowl Ad w/ baby and clown>
You don't see much "E-Trade" crap anymore.
In fact, if you are still doing this nonsense with your money, you are a two year old.
Yep, this was part of the problem. Investing became “amateur hour”, how else could you account for the ridiculous P/E ratios that were out there. Also the amateurs are much more easily swayed by emotion, than sound financial principles.
Mutual funds were supposed to be the savior for amateurs. Spread the risk, diversify across sectors.
Amen.
The Bernie Madoff's had their Ponzi Scheme. But that was peanuts compared to Social Security, Medicaid, and the rest of this %$%& - and everyone knows it.
The "Community Reinvestment Act" under Clinton gave birth to "Redlining" - which meant banks were forced to give bad loans to people who could never hope to pay it back.
Americans who signed "Liar Loans" are guilty of their own greed, and deserve to live on the street. Now, Obama the Hitler is vowing to "FORGIVE" their loans this week based on income and race.
The REST of us will pick up the Tab. There is going to be a Tax Revolt in America the likes that no one could have foreseen. Moreover, Alaska will succeed and become its own Nation.
Good mutual funds did what they were designed to do. They do spread risk and diversify.
However, the key diversification is asset classes, which diversification usually occurs before you get into any one mutual fund. So, if a person was well diversified among Cash, Bond, U.S. Stocks, International Stocks, and perhaps alternate investment classes (commodities, gold, etc.) then Mutual Funds performed as expected.
Good mutual funds also keep costs low and at least mimic their benchmark. It is rare for any mutual fund to regularly exceed its benchmark.
I will agree with you though that the average dude is not capable of making good portfolio allocation decisions. The only thing worse than stupid people mucking with their 401Ks is people expecting Social Security to pay out. On the whole, I’d prefer people be left with the freedom to make mistakes, rather than centralize assured mistakes in a government somewhere.
Sounds like a money making opportunity!
I moved 90% of my IRA funds into a money market fund after the mid-term election of 2006 when the democrats made big gains. I predicted higher gas prices (correct), gridlock between an unpopular president and traitors in congress (correct), a drag-on war with no definable victory aims (sort of correct), problems due to unsustainable housing prices (correct again) and high interest rates (ok, this was not correct).
When it looks like we’re at or near a bottom — I agree not yet — I’ll roll these funds back into stocks. I don’t expect to have any guff on this from the IRA people at Equitable.
"shorting" and the option market and day trading has killed the mutual fund....
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