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Archives for July 2011

Little Known Secret of Fund Managers

07/29/2011 by

What’s the Little Known Secret that many mutual fund managers wish you didn’t know? You won’t believe itwhen I tell you. Many mutual fundmanagers do not invest in their own funds. Kind of unbelievable, isn’t it!

Investment News, a trade publication that guys like me readat the breakfast table, recently ran an article about a new Morningstar study.(Morningstar is a company that tracks and rates mutual funds.)

According to Investment News, the Morningstar study foundthat only about 40% of fund managers actually invest in their own funds.

Would you like to know what percent of mutual fund managershad ownership stakes in the study Morningstar conducted two years ago? It was 49%. Not exactly going in the right direction.

Filed Under: Clarity Coaching Tagged With: ,

Home Bias Investing

07/13/2011 by

Whenever I review a prospective client’s investment portfolio, I rarely see one that is truly globally diversified. The biggest problem I see is that most people are woefully over-weighted in US stocks. To make matters even worse, its usually exposure to just large US company stocks.

Their advisors might have placed them into General Motors, GE, Verizon, Proctor & Gamble, Johnson & Johnson, and similar large stocks.

The problem here is that the investor thinks he or she is properly diversified, but in reality, they have several sectors representing only two asset classes. So when one of the stocks rises, generally they all rise. But when one drops in price, more often then not they all drop. The result: unintentional wild swings in account values.

Filed Under: Clarity Coaching Tagged With: ,

What’s Your End Game?

07/01/2011 by

I often get the deer in headlight stare when I ask that question. My father was a taskmaster my whole life….to the point of annoyance as a young person. The […]

Filed Under: Town and Gown Tagged With: , ,