Earlier this year we penned a couple of columns that, more or less, beat up the mutual fund industry. We will add one more now, with a bit of an extension to highlight what’s wrong with the investment industry in general as well as mutual funds. Then we’ll give our friends and former colleagues in the business a break, but until then here are five more things we don’t like about the business.
1. There are simply too many choices.
There are at least 15,000 mutual funds to choose from in North America. Funds were supposed to make investors’ lives easier, not more complicated. But with so many funds, there are hundreds of funds that just duplicate others. Add it all up and it makes for a confusing mix of choices for investors. Read More…
There have been countless studies on the pitfalls to getting involved with mutual funds which is why its so sad that so many people keep jumping into them. When will people learn that ETFs are a better way to go?
If they’d just lower the fees and streamline to knock off with the silly front and back end fees it wouldn’t be so bad.
Bingo! The problem is the deluge of choices out there. Which to choose? And at the end of the day the big winners are the money managers. ugh!
I still find it funny that peopel will pay 2.5% fee for nothing. Most funds lose money and the smart thing is to invest in Index Funds which don’t require a human at all since it just follows the market itself. Beats the managers every time.
I’ve been a long time proponent of mutual funds. The best i’ve seen are under the TD e-series. Low fees and no fuss. Just buy and hold and you are good to go for decades.
Hey there is always the low interest bank accounts. If you don’t invest and take risks, including losing on silly funds with lousy management, you won’t reap the rewards.
I tend to invest in real estate funds mostly and after about 5 years i am up 3%. Not much but it is an area of interest of mine.
I have been hearing about the bubble bursting soon here in Vancouver but its still thriving.
My concern is that because the 2008 crisis hasn’t been really fixed (derivative trading in the US) we Canadians are still stuck with not being too sure if we should invest in funds or into bonds or gold.