Mutural Funds or Stocks?

Question

okay, they say that mutual fund managers are professionals and are very good at where they put your money. they know more than the average joe, correct? then please explain this to me;

i have an substantial amount of money in my mutual fund and it has lost a ton of money, i have stocks that i picked out myself and all of thous are making money? why is this, why am i making more money than this professional who apparently knows where to put my money?

Answer 1

My, you are smart.

Answer 2

Read this study:

http://www.people.hbs.edu/ptufano/bbenef...

Brokers make you broker.

Answer 3

There might be a couple of reasons for this discrepancy.

1.  you might be smarter at picking stocks than the fund managers.  Don't laugh.  It might very well be true.

2.  you manage what?  maybe 100k?  Some mutual funds are in the billions of dollars.  When you have that much money to invest, your choices are somewhat limited.  I would hate to have to invest that much.  

3. you might have picked lousy funds.  There are 4 bad funds for every 1 good fund, just as there are 4 bad CEOs for every 1 good CEO.  Unfortunately,  I think there might be 1000 bad politicians for every 1 good politician.  Maybe not.  I am not sure there are any good politicians.

Answer 4

I'm going to go with the " birder" on this one...and reason number three...you probably picked " cautious" mutual funds...with your real money....and I'm guessing the stock picks are not real...right? It's usually the case, because everyone's a wheeler- dealer when the real money isn't involved.

I could be wrong...and if I am, I hope your stock gains at least cover your fund losses...in any case...the funds may come back... we're getting ahead on things that were absolutely BURIED in Feb/Mar... takes time.( I hope that's on your side !)

Answer 5

Judgment is relative

Go with a good index fund and make money off the collective wisdom of Wall Street

Answer 6

mutual funds are smart and the money under amc are subject to market conditions

mutual fund will recover  but you can not recover if you money invested in stocks, try

Answer 7

I wonder how long you have been doing it.  If you can keep that up for the long term, ten years or more, then you might have something.  Mutual funds have certain constraints.  They have a lot of money to invest and they can only invest 5 percent of their capital in on stock and cant own more than 10 percent of the voting stock of a company, for a diversified fund.

Answer 8

View It Now    FinanceExtends (dot) com

Answer 9

their management fees kill.. they know more but their costs outweigh their benefits.. you may have just picked the wrong fund.. or one loaded with fees and such