Comments on: Don’t some active mutual funds beat index funds? http://www.iwillteachyoutoberich.com/blog/dont-some-active-mutual-funds-beat-index-funds/ Personal finance blog for college students, recent graduates and everyone else -- including entrepreneurship -- for getting rich. Featured in the Wall Street Journal and New York Times. Fri, 19 Mar 2010 05:24:42 -0700 http://wordpress.org/?v=abc hourly 1 By: Sean http://www.iwillteachyoutoberich.com/blog/dont-some-active-mutual-funds-beat-index-funds/comment-page-1/#comment-36790 Sean Fri, 12 Oct 2007 15:14:29 +0000 http://www.iwillteachyoutoberich.com/blog/dont-some-active-mutual-funds-beat-index-funds#comment-36790 Ryan's points are ridiculous. As a recent graduate with a BSBA in finance, it is a shame to hear that somebody is advising their clients to invest in loaded mutual funds. There is absolutely NO reason to be invested in front-loaded funds. In one aspect, Ryan is correct: some loaded mutual funds do beat index funds. My guess is probably about 5% of all available funds. In the case of the front-loaded fund, the investor is paying a front-load fee, then a management fee, and probably a 12 b-1 fee. If a client really wants to invest in an actively managed fund, they should at least invest in a no-load fund. It is a shame that Ryan has to make a living this way. In my opinion, Ryan should leave whatever parent company he is selling mutual funds for, start his own firm, give people hourly investment advice and charge a percentage of their assets under management, which would be just as valuable to him, and cheaper to his clients. Ryan’s points are ridiculous. As a recent graduate with a BSBA in finance, it is a shame to hear that somebody is advising their clients to invest in loaded mutual funds. There is absolutely NO reason to be invested in front-loaded funds. In one aspect, Ryan is correct: some loaded mutual funds do beat index funds. My guess is probably about 5% of all available funds. In the case of the front-loaded fund, the investor is paying a front-load fee, then a management fee, and probably a 12 b-1 fee. If a client really wants to invest in an actively managed fund, they should at least invest in a no-load fund. It is a shame that Ryan has to make a living this way. In my opinion, Ryan should leave whatever parent company he is selling mutual funds for, start his own firm, give people hourly investment advice and charge a percentage of their assets under management, which would be just as valuable to him, and cheaper to his clients.

]]> By: Carlin http://www.iwillteachyoutoberich.com/blog/dont-some-active-mutual-funds-beat-index-funds/comment-page-1/#comment-82 Carlin Sat, 11 Mar 2006 06:31:07 +0000 http://www.iwillteachyoutoberich.com/blog/dont-some-active-mutual-funds-beat-index-funds#comment-82 "I use loaded fund because I don’t get paid otherwise." One, he needs to work on how he presents himself through his communications, especially since he's dealing with clients. Nothing says I don't know what I'm doing like a poorly written email (even if you are the best at what you do, misspellings and poor grammar draw attention away from the purpose of what you are writing, and also reduce the reader's trust that you know what you are doing) Second, that reaffirms a point that many people have made, especially Warren Buffet (the Greatest of all Time). Ryan isn't recommending a loaded fund because it's good for you. He's recommending it because it's good for him. Unfortunately in the investment advisory industry, their commissions aren't tied to your returns. If they were, then Ryan wouldn't be selling you load funds. He'd be trying to make you as much money as possible, because then he'd make more. Isn't that a novel idea? “I use loaded fund because I don’t get paid otherwise.”

One, he needs to work on how he presents himself through his communications, especially since he’s dealing with clients. Nothing says I don’t know what I’m doing like a poorly written email (even if you are the best at what you do, misspellings and poor grammar draw attention away from the purpose of what you are writing, and also reduce the reader’s trust that you know what you are doing)

Second, that reaffirms a point that many people have made, especially Warren Buffet (the Greatest of all Time). Ryan isn’t recommending a loaded fund because it’s good for you. He’s recommending it because it’s good for him.
Unfortunately in the investment advisory industry, their commissions aren’t tied to your returns. If they were, then Ryan wouldn’t be selling you load funds. He’d be trying to make you as much money as possible, because then he’d make more. Isn’t that a novel idea?

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