siding installation soffit installation installing vinyl siding woodstock vinyl siding cost mchenry hardie siding .. Chicago Drug testing

Lies, Damn Lies and Mutual Fund Returns

How many times has this happened to you? You're at a social function and the conversation turns to investing. Pretty soon, people are comparing how well their investments are doing. As you might imagine, being an investment advisor this happens to me a lot. However, I recently had an experience with it that startled me.

Bob, one of the guys I was chatting with at a party, asked what kind of returns I had made for my clients with my methodical no load mutual fund strategy during the past year. I replied that they had unrealized gains of slightly over 29%, after management fees, for the 8 months that we were invested.

Bob countered with a smirk that he had made a 40% return. I raised my eyebrows and told him that was darn good-and suggested that maybe he ought to be managing my money. At that point we were interrupted and, as the evening went on, I began to wonder exactly how Bob had gotten his great return.

I cornered him a little later on and, upon digging a little deeper, the story looked somewhat different. Yes, he had made a 40% return on a mutual fund he had some money invested in, however, we were comparing apples and bananas.

He had a total portfolio of $100k. Being cautious, he had invested only $10k into a mutual fund, from which he profited $4k after he sold it. The balance of his portfolio ($90k) was sitting in a money market fund earning some 0.35% per year.

So, while he had made 40% on 10% of his investment, he had only made 4.35% on his whole portfolio. My methodology was also focused on protecting my clients' investments and it had increased their entire portfolio 29% (unrealized). That would be an apple to apple comparison when measuring my returns against his. Bob's one fund realized 40% return. However, had I approached it the same way Bob had, I could have described one of the funds I used that had realized over 49% for the same period.

Actually, Bob's not-so-good-news story didn't stop there. Bob admitted to having followed the losing Buy and Hope strategy through the bear market of 2000 and had finally sold out at a 50% loss a year ago, before committing $10k to a mutual fund investment.

I was pleased to be able to tell him that my methodology had gotten my clients out of the market before the bear took his big bite, and they suffered only minimal losses before finding safety in money markets accounts. And when my trend tracking figures directed us to move back into the market, they still had most of their money poised to start earning for them again-which it did and very nicely, thank you.

The moral of the story is to look past the surface and don't take any numbers thrown at you at face value. Remember, most people returning from a weekend in Las Vegas will shout about their winnings and mumble about their 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:

In The News:

Risk Control

Everything you invest in has risk so you want to... Read More

Price Targets

Every day in any financial publication you will find the... Read More

Market Success

Who are the successful investors?There are those who follow the... Read More

Gurgle Gurgle

Caught in a whirlpool and being sucked under. No life... Read More

Whitewater Stock Market

Ever done any whitewater rafting or canoeing? Long periods of... Read More

Buy and Hold Investment Strategy

"Buy and hold" is one of the most heralded investment... Read More

Shorting Stocks ? The Basics, Part I of II

What does it mean to short a stock?This means that... Read More

What is Involved in Peak Performance Trading?

There is so much involved in developing peak performance, that... Read More

Oil Stocks As A Long Term Investment

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

Analyst Reports

When you become interested in a stock or mutual fund... Read More

The 401(K): How The Insider Has Stolen Your Retirement!

Mutual funds were moderately successful in creating a presence in... Read More

Why Buy and Hold?

Since I can remember, and that's a long time ago,... Read More

The POWER of a Proven Stock Investment Plan

When you invest in the stock market for ever-increasing cash... Read More

Will the Stock Market be Lower in October?

The stock market often closes a week in the middle... Read More

Stock Trading Success

The ABC's of Stock Trading SuccessStock trading success...why is it... Read More

Political Investing

We have two candidates for president that have really different... Read More

The Surgeon General

The Surgeon General of the United States says that smoking... Read More

Bollinger Bands Strategies

The Bollinger Band theory is designed to depict the volatility... Read More

What To Buy?

Now that you have some money burning a hole in... Read More


The spring-loaded rat catcher is the ultimate low-tech device invented... Read More

Successful Trading ? Taking Profits - Part 2

Suppose your position has made a big move and you... Read More

Swing Trading Strategies

Using Swing Trading Strategies and Technical Analysis when Trading Stocks... Read More

Shorting Stocks ? The Basics, Part II of II

After the publication of the first part of this two... Read More


First let's see what protectionism is. According to Mr. Webster... Read More

Online Broker Trade History Not Doing the Job

Let me start by saying that...Most online brokers do not... Read More

induction street lights manufacturers street light fixtures Pete's produce ..
induction street lights manufacturers street light fixtures Pete's produce ..