Whenever I see mutual fund comparisons in the trade publications and in the financial section of the newspaper they almost always mention a specific fund and tell you how good it is in relation to its peer group. A peer group is a specialized sector of mutual funds that all invest in about the same type of stocks or areas of the world or size of companies or some such categorization.
Does this help you make money?
No.
Why?
You have several dogs. A minature poodle, a regular poodle and a very large poodle. On the outside they look very similar, but in performance they can be very different. In a race with a greyhound they will all lose. In a tracking contest with a beagle they will not be able to find the possum. In a contest with a retriever they will not get the bird as quickly. However the large poodle is bigger stronger and can do more than its counterparts. So what? You have the wrong dog for the job.
When you go hunting you don't want a poodle you want a pointer, setter or beagle depending upon the prey. When you invest your hard-earned money in a mutual fund you want the best performer for the type of hunt in which you are engaged and that hunt is for maximum appreciation of your investment. Your prey may change form (from a duck to a possum) and as the prey changes so should the animal (fund) you use (invest) also change.
If you had stayed invested in the best technology fund you could find a year ago, the best one in the entire peer group, I can guarantee you have lost money. The sector has lost more than 75% of it value. It makes no difference if you have the best dog of that breed. If it can't do the job you must change dogs. (Pun intended.)
The important thing to remember when choosing a mutual fund is to find one that is in a sector that is strong NOW, not a year or 3 years ago. When you go back for 3 years or 5 years you will find that there has been a period of time when that sector had or has a very big decline in value. When ANY fund starts down more than 10% to 20% (you decide) it is time to sell it for another fund that is still increasing in value.
When we are in a bear market, as we are now, you may not be to locate one that is going up. Do not listen to any broker who says that a group cannot go any lower. You must wait until you see it increasing in value every week for at least 2 months or more before committing any funds.
You only want to be invested in the best no-load fund in the strongest peer group at all times.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
Copyright 2005
Oswego taxi to Midway .."There is nothing more frightful than ignorance in action!" Johann... Read More
It depends on your level of understanding of the market... Read More
There are so many kinds of work that needs to... Read More
Are you paying any attention to your retirement savings? Do... Read More
We are already in it, but you can't see it.... Read More
If you have been dealing with mutual funds for any... Read More
I feel that an investment strategy in the stock market... Read More
People are constantly asking me why is the stock market... Read More
The ABC's of Stock Trading SuccessStock trading success...why is it... Read More
If you have not back tested your trading system, you... Read More
The trading method you employ to approach the stock market... Read More
Just 30 years ago the stock market was a shadow... Read More
As the man said, "I've got some good news and... Read More
Are you attracted to the idea of being in control... Read More
Well maybe that's overstating it a little, but it's certainly... Read More
Suppose your position has made a big move and you... Read More
When it comes to buying a stock or mutual fund... Read More
There are many good penny stock investments available, which could... Read More
There is no question that the stock market is being... Read More
Because there are so many stocks that are NOT paying... Read More
Every stock market investor faces one primal enemy. An enemy... Read More
One Saturday morning, while he was sitting at his computer... Read More
Wall Street has been preaching the doctrine of Buy and... Read More
We've all heard of the stock market and probably have... Read More
Have you been listening to the talking heads on CNBC-TV?... Read More
shuttle from Midway Morris ..If you have been dealing with mutual funds for any... Read More
Duck! No I don't mean a quack, quack. I meant... Read More
How many times has this happened to you? You're at... Read More
I feel that an investment strategy in the stock market... Read More
If you go to Haiti or other places in the... Read More
As an investor you will want to check out any... Read More
When an individual investor wants to roll up his sleeves... Read More
Everyone who invests in the stock market wants to be... Read More
Hello Inflation, it has been awhile, I see you on... Read More
Now where have I heard that before? I know. It... Read More
Have you seen all those big full page ads for... Read More
If you were to find that you had some severe... Read More
This is a rather simple strategy with which I am... Read More
Peter is a professional trader, Paul is not. Peter has... Read More
What account size do I need?How much money can I... Read More
Options trading can increase the profits you make when trading... Read More
Among the largest forces that affect stock prices are inflation,... Read More
Sometime in the third quarter of 1997, someone told me... Read More
I am sure that if you have a brokerage account... Read More
Whenever I see mutual fund comparisons in the trade publications... Read More
It has been said that low cost or even free... Read More
Congress recently passed another new law that is supposed to... Read More
There is no question that the stock market is being... Read More
Most people think the stock market is a zero sum... Read More
I constantly hear the talking heads on CNBC-TV, the radio... Read More
Stocks & Mutual Fund |