In a recent segment of 60 Minutes on CBS the benefit of investing in mutual funds, particularly in retirement plans, was called into question. Several of the individuals interviewed seemed shocked that their retirement plans, invested in mutual funds, had experienced such a dramatic decrease in value due to the recent bear market.
A similar situation occurred during the 2001-2002 bear market when many mutual had become over weighted in technology stocks. Investors thought they owned diversified stock funds, when in fact those funds had become proxies for a technology index.
Individual investors must pay close attention to what their funds are actually invested in, and be certain that their funds are adhering to their stated strategy. It is possible to monitor mutual fund holdings by going online, using a mutual fund research company like Morningstar, or obtaining the information directly from the fund company.
Knowing what you own will keep you from unwanted investment surprises.
Related Posts
Mutual Funds and Asset Allocation – Do you know what you own? (2nd in a Series)
Concentrated investing but no big bets
Crossvault Concentrates. Why We Focus on 20 Great Stocks.
Crossvault Conversations with Marc Flaster – Founding Principal, Sandler O'Neill – Part V- Crossvault Conversations with Marc Flaster – Founding Principal, Sandler O’Neill – Part IV
Ask before you invest
{ 1 trackback }
{ 0 comments… add one now }