What Are You Waiting For?
Do you own any mutual funds? In an IRA or 401K or wherever. Privately or at work.
Have you called your fund manager to find out what is going on with your fund? Are they under investigation for late trading, improper pricing, deviation from length of sales defined in the prospectus or stale trading? Are my questions too hard?
Please don't be confused. It seems that most fund owners haven't done anything. There is a serous bout of complacency going around. Forget the flu; this is going to affect your pocketbook. Oh well, it's your money and if you don't care if some crook in a suit with a manicure is handling it then that is your loss.
Now we find out that even those foreign funds have bandits for managers. The British mutual fund industry called unit investment trusts has been doing almost the same thing as our home-grown thieves. It seems the little investor has his wrists tied to his ankles all over the world. The regulatory agencies such as the SEC (Securities and Exchange Commission) have NOT been doing their job. If you have questions about your funds you can call them in Washington at 202-942-8088. They must tell you as this is public information.
The late trading scandal hit first and has been misnamed as market timing. Late trading is illegal whereas market timing is legitimate. Late trading allows order entry at today's price as long as 3 hours after the market has closed. During that 3 hours news of financial importance regarding stocks in a particular fund could be affected by legal decisions, profit pronouncements, etc.,etc. That news could make the fund go up 2% to 5% the next day when the late trade is then offset taking a disproportionate amount of profits from the regular fund holders. That does not sound like much, but when you are dealing with big numbers it is plenty. What is nice for the crook is there is almost no risk.
In many funds there are classes such A, B, C and other strange letters. These have to do with how much and when the commission is charged. If you put in $25,000 or more you are supposed to get a better price, but many funds have been charging more.
In the prospectus it may say you are required to hold a fund for X numbers of days or pay an extra amount called a redemption fee. Their friends, the big money folks, have not been so charged.
Stale trading is the new one. It seems the buy or sell orders are not entered on the day they were placed, but done so at a more favorable time to allow for a better profit.
These practices and ones not yet reported and those I have not heard of are stealing money from your account. What are you waiting for?
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
Copyright 2005
More Resources
Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 404, exitingMore Stocks & Mutual Funds Information:
Related Articles
Stock Market Investing: Knowing When (and when not) to Sell
One of the greatest challenges of investing in stocks is developing a "sell discipline". Some of the most adept investors struggle with the decision of when to sell.
The 401(K): How The Insider Has Stolen Your Retirement!
Mutual funds were moderately successful in creating a presence in the stock market until the advent of the investment retirement account and in particular the 401(k). Corporate insiders persuaded the federal government to allow for the 401(k) in lieu of offering employees the traditional pension.
You Wont Like This
Why? Because I am going to shatter your conventional wisdom as I have many times in previous columns about the lies that Wall Street continues to tell you. This time we are going to go deeper into the economy to unearth the truth about lies the politicians are telling you.
365/7/24
What does it take to be a stock trader? It takes a total mental commitment to the task. It becomes a complete way of life.
Mousetrap
The spring-loaded rat catcher is the ultimate low-tech device invented more than 100 years ago and remains the best demouser in the world. It is so simple anyone can master it and best of all you can keep on using it year in and year out.
Trading Baskets II: The Crapolio, A Roll of the Dice in the Stock Market
In a previously written article, we expanded the use of the term "Trading Baskets" to include stocks from different sectors or industries. Now I want to share with you an approach to day trading or swing trading that I had some success with back in the wild and woolly, pinnacle days of day trading that may still work today.
Trading vs Investing
I often hear from people, "I don't trade. I invest.
The Seven Mistakes All Novice Traders Make and How to Correct Them
We learnt the following the hard way! If any of these things applies to you, don't worry - there is an easy solution!MISTAKE ONELack of Knowledge and No PlanIt amazes us that some people expect to trade the stock market successfully without any effort. Yet if they want to take up golf, for example, they will happily take some lessons or at least read a book before heading out onto the course.
Analyzing Growth Stocks: An Important Focus For Any Investor
Analyzing growth stocks is an important focus for any investor. This is especially important, since stocks are an irreplaceable part of any good investment plan, and since unbiased stock research is hard to find.
Money, Insanity and Wall Street
Money: the most charged word in the planet. It means something to everyone.
Patterns
The Law of Chaos is the theory of random unpredictable action applied to the cosmos, mathematics, mechanics, almost everything. Those who believe it will definitely think the stock market is in chaotic state at this time.
Mutual Funds: The Modern Den of Thieves!
Mutual funds were created with the idea that one person can specialize and manage the investments of a large pool of money from multiple investors. Before the great depression mutual funds were called investment pools and mutual fund managers were called pool operators.
Trading Tips No 8: Picking the Best Stock Market Price
Carefully thinking through your goal as a trader is of prime importance, when picking the best stock market price. It is very difficult if not impossible to meet a goal that is ill defined.
Momentum
One of the basic laws of physics states that a body in motion will continue in motion in the direction it is going until interrupted by another force.That basic physics law also applies to stocks and mutual funds.
Online Investing & Stock & Share Trading: 4 Reasons Why Most Online Investors & Traders Go Broke
Are you attracted to the idea of being in control of your financial future, but confused about how to start investing in the stock or share market, while avoiding costly mistakes?Or maybe you're disappointed with your performance so far?Does it sometimes feel like every time you take the plunge and buy into the market, the price goes down?That's understandable..
Option Trading Basics
Options trading can increase the profits you make when trading Stocks if you understand how to use them and know what you are doing. Options can be a very useful tool that the average investor can use to enhance their returns.
Bull or Bear?
Cat or dog? Maybe Zebra. Shucks, I don't know, but my broker keeps telling me it is a bull and to buy this and that.
My Stock - Right or Wrong
We all know the expression, "My country, right or wrong", but have you ever thought about the stocks or mutual fund you own and said to yourself, "My stock - right or wrong" and held on to your position even as you saw your hard-earned money disappearing?This is the Buy N Hold strategy and, in case you haven't noticed, lost from 40% to 60% and more of investors' money from 2000 to 2003. Fortunately, for the past year stock markets around the world have gone up and folks have recovered about 25% to 30% from those low numbers.
Trading as a Business
What can I expect to make my first year of trading?We get questions like this one quite often. We find that most aspiring traders don't have a clue as to what to expect from the market.
Choosing a Stock Broker
If you were to find that you had some severe illness that required surgery, would you attempt to perform that surgery upon yourself? What if your car broke down and needed a valve job? Would you get out the Craftsman tool set you got for Christmas three years ago and start tinkering under the hood even though you know absolutely nothing about engines? Of course you wouldn't do either of these things because there are times in life when we know we must seek the assistance of a professional. So why is it that so many people try to make their own investment decisions without consulting a professional stock broker?A stock broker is a trained financial professional who knows how to watch the trends of the stock market, is kept up to date on financial developments by her brokerage firm, and knows how to make wise and sound investment decisions.