Mutual Funds – Do you know what you own? (1st in a Series)

by Laura Ehrenberg-Chesler on May 12, 2009

in Asset Allocation,Crossvault Capital,Economic Indicators,Investment Strategies,Mutual Funds

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.




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