Performance Funds

 

Mutual funds are doing more and more to discourage investors from leaving them and taking their money to a better performing fund. What does better performing mean? It has nothing to do with who the manager is, what the expense ratio is or how well they performed over the past 5 or 10 years.

Remember the old one, "What have you done for me lately?" That is the ONLY thing that counts. If you ever expect to make money in the stock market you must take the time to find the best performing no-load, no-redemption fee funds that are going up the fastest during the past 3 and 6 months. Usually any fund that has done well for a year or more has just about run its course and once it starts weakening in its upward movement, goes flat and starts down it should be sold and replaced. This can easily be seen in a chart on your computer or at the library at www. bigcharts. com.

Most full service brokers will not sell you no-load funds so you will have to own an account with a discount broker such as Ameritrade, Scottrade or Brown & Company. Many of the well known discount brokers such as Fidelity, Schwab and Waterhouse have adopted hidden fees.

Brokers and financial planners will tell you not to switch around, but that is because they have not learned their trade. It also might mean they are too lazy to do their job. If you remain with a weak fund you will have a weak return or even lose money.

I may sound too harsh in my criticism of brokers and financial planners, but I have hired more than 300 brokers when I owned a brokerage company and I know that only about 1% (yes, one) know how to make money and protect capital. You have to find a good one or take charge yourself.

Knowing how and when to switch will double or triple your returns and most importantly you will not lose profits you have made. Stay with the best performers at all times.

Copyright 2005

 



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