Below is the introduction to a free e-book, I’m set to release very soon.
Before the release, I wanted to hear your opinion on mutual funds. How have investing in mutual funds made your life easier? Has the array of mutual fund options made investing harder? Give this short post a read and let me know in the comments.
The simplicity of investing in mutual funds was supposed to make our lives easier. For a number of reasons, mutual funds have done anything but that.
In an article from About.com in April of 2009, they found that there were a total 803 mutual fund companies (think Vanguard, Fidelity, etc…) in the year 2000. At the end of 2007, there were only 683 companies.
Less is better right? Not exactly because the number of mutual fund options provided by those companies went from 4,818 open-ended mutual funds in 2000 to 8,064 open-ended mutual funds at the end of 2008.
With over 8,000 options to choose from, how does someone start finding the best fund for them? Should they rely on rankings from websites like Morningstar? Would it be easier to rely on a hot tip you got from a coworker? Why not just listen to the people on T.V. who recommend a different mutual fund every day?
As you know, the mutual fund industry has become a very difficult one to navigate. It’s getting harder and harder to separate the good from the bad.
This ebook was meant to get you back to what mutual funds were first intended to do – make your life easier.
Let me know your thoughts in the comments. If you leave a thoughtful comment, I will try to incorporate it into the ebook.
Thanks
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{ 3 comments… read them below or add one }
I recently started a mutual fund through Vanguard and can’t even tell you what funds are in it. Did a lifecycle fund where it does the work for you and there were limited options and picked one.
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Twitter: OnlineInvestAI
January 7, 2010 at 4:53 pm
I think that managed mutual funds are one of the worst investments people can make. There is no way to predict future performance (track record doesn’t mean anything). People are paying most of the potential profit in fees, but take all of the risk. They people who sell and manage them make money, but the people who buy them tend to make very little money, at best.
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I’m about mutual funds because they are less risky than individual stocks. You’re investing in a family of stocks instead. I think you have to watch for excessive fees and high turnover, but I’ll take them over stocks anyday.
Ken´s last blog ..Being Faithful in the Small Things