Do you own any mutual funds? In an IRA or 401K or wherever. Privately or at work.
Have you called your fund manager to find out what is going on with your fund? Are they under investigation for late trading, improper pricing, deviation from length of sales defined in the prospectus or stale trading? Are my questions too hard?
Please don't be confused. It seems that most fund owners haven't done anything. There is a serous bout of complacency going around. Forget the flu; this is going to affect your pocketbook. Oh well, it's your money and if you don't care if some crook in a suit with a manicure is handling it then that is your loss.
Now we find out that even those foreign funds have bandits for managers. The British mutual fund industry called unit investment trusts has been doing almost the same thing as our home-grown thieves. It seems the little investor has his wrists tied to his ankles all over the world. The regulatory agencies such as the SEC (Securities and Exchange Commission) have NOT been doing their job. If you have questions about your funds you can call them in Washington at 202-942-8088. They must tell you as this is public information.
The late trading scandal hit first and has been misnamed as market timing. Late trading is illegal whereas market timing is legitimate. Late trading allows order entry at today's price as long as 3 hours after the market has closed. During that 3 hours news of financial importance regarding stocks in a particular fund could be affected by legal decisions, profit pronouncements, etc.,etc. That news could make the fund go up 2% to 5% the next day when the late trade is then offset taking a disproportionate amount of profits from the regular fund holders. That does not sound like much, but when you are dealing with big numbers it is plenty. What is nice for the crook is there is almost no risk.
In many funds there are classes such A, B, C and other strange letters. These have to do with how much and when the commission is charged. If you put in $25,000 or more you are supposed to get a better price, but many funds have been charging more.
In the prospectus it may say you are required to hold a fund for X numbers of days or pay an extra amount called a redemption fee. Their friends, the big money folks, have not been so charged.
Stale trading is the new one. It seems the buy or sell orders are not entered on the day they were placed, but done so at a more favorable time to allow for a better profit.
These practices and ones not yet reported and those I have not heard of are stealing money from your account. What are you waiting for?
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
If you are a baby boomer, time is not on... Read More
In his wonderful book, 'Multiple Streams of Income', best selling... Read More
TOO OFTEN, INVESTORS SIMPLY CHOOSE TO follow the crowd. This... Read More
If you're a normal human being, your need to feel... Read More
Spread trading is a technique that can be used to... Read More
Every day in any financial publication you will find the... Read More
Much like the middle child, mid-cap stocks have long struggled... Read More
I read a comment by a forum member on another... Read More
Let's say you are interested in this one company. You... Read More
1. Do not spread your money too thin.My friend has... Read More
The spring-loaded rat catcher is the ultimate low-tech device invented... Read More
It depends on your level of understanding of the market... Read More
Unfortunately, most of you who are reading my column are... Read More
One of the things people are always asking me is... Read More
You'd have had to be living on a desert island... Read More
Ever jumped out of an airplane? It's OK if you... Read More
The big bad bear is stirring again. So far he... Read More
What the heck am I talking about?It is often said... Read More
Picking a beaten-down stock requires a different kind of selection... Read More
Investing in long-term financial vehicles give you the most gains... Read More
You read and hear a lot about hedge funds. Unfortunately,... Read More
No, this is not a symbol for some Latin number.... Read More
People are always asking me when should I sell my... Read More
I use the P/E ratio as a secondary indicator for... Read More
The Bollinger Band theory is designed to depict the volatility... Read More
It is difficult to make money in a bull market,... Read More
"If you don't know where you are going, any road... Read More
After the publication of the first part of this two... Read More
Every year I go to the Money Show in Orlando,... Read More
Inverted interest rates? What's that? Who cares? Even if you... Read More
For years I have been saying you must have a... Read More
Being wrong is OK, but let's not carry it to... Read More
If you are going to be a winner in the... Read More
You have a lock on your house. You have a... Read More
I cringe every time I hear a novice investor tell... Read More
Much like the middle child, mid-cap stocks have long struggled... Read More
During our travel down life's path we come to many... Read More
When you become interested in a stock or mutual fund... Read More
Professional stock options traders use the term lean to refer... Read More
What does it take to be a stock trader? It... Read More
Are hedge funds a suitable investment for you? Hedge funds... Read More
Mutual fund investing is a lot like Thai cooking. Everyone... Read More
If you go to Haiti or other places in the... Read More
If you want one.And I don't recommend any broker with... Read More
With the internet such a huge part of our daily... Read More
On the 40 year journey through the turmoil of a... Read More
The recent criminal fiasco in the mutual fund industry is... Read More
Economists know more about how the fragments of society work... Read More
Most stock market traders have a favorite technical indicator.The one... Read More
It takes a total mental commitment to the task. It... Read More
Stocks & Mutual Fund |