How To Beat The Mutual Fund Companies At Their Own Game

You'd have had to be living on a desert island with no TV, newspaper or internet connection to have missed hearing about the great mutual fund scandal of 2003.

The issue was that some mutual fund companies allowed certain hedge funds to engage in after-hours trading, sometimes incorrectly referred to as market timing. Unfortunately, some companies have used the confusion about the term "market timing" to further their own cause. How?

They have used this issue to pretty much ban all forms of trading their funds, and some companies are imposing hefty short-term redemption fees-penalties for all intents and purposes-in the name of avoiding impropriety. But the real idea behind it all is: Buy our fund and never sell it!

These companies advocate a stubborn Buy & Hold philosophy despite the devastating effects that approach had on investors' portfolios during the recent bear market. Performance is immaterial to them-they want your money in their fund whether it's going up or down.

With all of the negative press over the months you'd think that mutual fund companies would have cleaned up their act and started giving more consideration to the individual investor. Not so.

This was brought home to me when a fund manager of an $800 million mutual fund called me to see what my plans were in respect to holding our positions with his fund (about $2 million).

I explained my trend tracking methodology and he got very angry when he heard I would protect my clients' accumulated profits by selling his fund if it were to drop 7% off its highs.

His blustering made it quite clear that he did not like anyone managing for the benefit of their clients; he only cared about what was best for him and his company.

So, what can you do to prevent being taken advantage of? For one thing, do what your mutual fund company does - not what they tell you to do. Adopt a strategy for following trends, such as I do, and use the mutual fund manger's superior stock picking ability to your advantage by buying and holding only as long as the fund is performing well.

Remember, the fund manager has one big disadvantage over you: He always "has to" be invested so that the public can purchase shares in his fund. You don't!

If market conditions dictate that you are better off in the safety of a money market account because we are in a severe downtrend, then you can take your money and run for cover. He can't. He is constantly trying to adjust his portfolio to ever-changing economic conditions so that his potential losses are minimized. At the same time you are being told that his fund is the investment for all seasons. Don't fall for it!

You as an individual investor are really in the driver's seat. Unfortunately, you have probably been conditioned to think that Buy & Hope is a good investment strategy, when in fact it is a losing proposition.

Bottom line is, use a well performing mutual fund during strong up trends and get over to the sidelines during trend reversals. (That's exactly what I did for my clients in October, 2001, and we retained the lion's share of their profits while Buy & Holders kept insisting the emperor was wearing new clothes.) Pretty soon you will feel that you are in charge of your financial destiny and any chosen mutual fund is merely a tool to bring you closer to your goals of maximizing your gain and minimizing your losses.

About The Author

Ulli Niemann is an investment advisor and has been writing about objective, methodical approaches to investing for over 10 years. He eluded the bear market of 2000 and has helped countless people make better investment decisions. To find out more about his approach and his FREE Newsletter, please visit: www.successful-investment.com.

www.successful-investment.com

Alexis limo rentals ..
In The News:

A Google DeepMind team has developed an artificial intelligence system that can play video games like a human and take native language commands from players.
Four of the largest school boards in Ontario, Canada have launched lawsuits against TikTok, Meta, and Snapchat, claiming that they have impacted students' thinking and behavior.
Finalists for the inaugural Women’s Prize for Nonfiction, aimed at addressing the gender imbalance in nonfiction publishing, were unveiled on Wednesday.
Tech guru Kurt "CyberGuy" Knutsson breaks down whether the government is watching citizens and what they can do to protect online privacy.
A benchmarking group for artificial intelligence has released new results evaluating the speed of hardware in running AI applications and responding to users.
Sierra Space’s Dream Chaser spaceplane provides a glimpse into the future of space travel. Traveling to space may become a part of everyday life.
The new European Hyperloop Center in the Netherlands aims bring in a new era of transportation. The center will use a steel tube as a proving ground for testing the new vehicle.
Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.
While it may be incredibly tempting to have a “go with the flow" mindset like the rest of your vacation, your technology definitely should not be compromised while traveling.
Have you ever accidentally deleted an app from your iPhone that you’ve already paid for? Don't worry. We’ve got a trick that will help you get it back without having to buy it again.
Apple's new Journal app has raised privacy concerns among Apple's userbase. Tech expert Kim Komando examines social media rumors and explains what steps to take to protect yourself.
Although Facebook has denied that our phones listen to us, they do have other ways of finding out what we are talking about, listening to and searching for.
With the integration of OpenAI technology, Figure 01 has taken a significant leap forward, showcasing the potential of robots to understand and interact with us on a personal level.
Port Ellen, newly reopened whisky distillery in Scotland, is using SmokeDNAi technology to understand mouth-feel and flavors during the whisky maturation process.
Telly, a smart TV firm, is promising to give out their 4K 55-inch TV for free. What must you give in return? The innovative, yet potentially unsettling, answer might shock you.
The moment a spam invite hits your calendar, it’s like an uninvited guest at a party. So, what do you do? Show it the door.
Identity thieves are now targeting children and are making large sums of money by exploiting children's identities, possibly hurting their financial future.
There's a clever way to change the notification sounds on your Android without having to look at your screen. Kurt "CyberGuy" Knutsson explains.
If your bank accounted has been hacked, there are a number of steps you can take to prevent it from happening again. Kurt "CyberGuy" Knutsson explains.
Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.
The Wave House, a data center in Heidelberg, Germany, is the the largest 3D-printed building in Europe. Its walls were built in about 140 hours.
Some government agencies around the world are struggling to meet their staffing goals when it comes to hiring artificial intelligence experts.
Google Maps' recent upgrades have introduced real-time ETA and turn-by-turn directions to your phone's lock screen while you are traveling.
Kat Cammack says AI could disrupt the 2024 election. A report says shared AI image tools generate election disinformation in 41% of cases and voting disinformation in 59% of cases.
Deepfakes have become commonplace, and the technology is only getting better, but there are certain elements that might give away the fact that an image is AI-generated.

The Stock Market Investor?s Worst Enemy

Every stock market investor faces one primal enemy. An enemy... Read More

The Inside Scoop on Mutual Fund Rip Offs

The bear market that showed up at the end of... Read More

Oil Stocks As A Long Term Investment

The demand for world oil is increasing while world reserves... Read More

Enron Cure

Let's hope you did not have any of the Enron... Read More

A Stock Market Investment Strategy

I feel that an investment strategy in the stock market... Read More

Attitude Is [Almost] Everything

I often play a little game with myself when I... Read More

Overseas Investing: Going Against the Mainstream

TOO OFTEN, INVESTORS SIMPLY CHOOSE TO follow the crowd. This... Read More

Stock Market Course .... Day Trader Online Seminar ... Can You Generate Profits Trading from Home?

When it comes to stock market trading it PAYS to... Read More

Forces that Move Stock Prices

Among the largest forces that affect stock prices are inflation,... Read More

?Fears Only Enemy Is Action?

What a great statement!I just heard someone use it in... Read More

Small-Cap Stocks: The Beginning of the Journey

When an individual investor wants to roll up his sleeves... Read More

9 Deadly Trading Mistakes!

The following are a list of nine things you want... Read More

Successful Trading ? Taking Profits - Part 1

So you're started trading, you bought some positions with your... Read More

Price to Earnings Ratio - P/E

After finding the price of a particular stock, usually the... Read More

Selling

The stock market has been going up for more than... Read More

Momentum

One of the basic laws of physics states that a... Read More

Race Horses and Mutual Funds

For years investors have been taught to look into the... Read More

Value Investing: Selecting From The Bargain Bin

Picking a beaten-down stock requires a different kind of selection... Read More

Boiler Room 7/17/00

On Friday or Saturday evening my wife gets a movie... Read More

Exchange Traded Funds Primer

Exchange Traded Funds (ETFs) are a group of passive index... Read More

10 Tips For Creating Wealth From the Stock Market

1. Do not spread your money too thin.My friend has... Read More

Stock Analysis

I receive emails from Morningstar. This company provides statistics and... Read More

Financial Crime

Congress recently passed another new law that is supposed to... Read More

What To Buy Now

I am sure that if you have a brokerage account... Read More

The Value of Stocks of a Company

The debate rages all over Eastern and Central Europe, in... Read More

car service from Midway Alsip ..