mutual fund
Written by David, February 15th, 2012
“You have to make your money work for you.”
We’ve all heard this old adage, and to be certain, it is the key to income investing success. And while the truth of this statement can’t be argued, it’s definitely a lot easier to say than to actually do.
At Fabian Wealth Strategies, we take the concept of making your money work for you very seriously. But what does it actually mean to have your money working for you, and how can we help you achieve that noble goal?
Answering these questions is what our new report, The Ultimate Income Strategy, is all about.
As a fee-only investment advisor specializing in helping clients preserve their capital while also generating the income they need to live the life they desire, we take both of these objectives extremely seriously. However, conventional Wall Street wisdom usually pits the twin objectives of capital preservation and high income generation at odds.
According to the official party line, you can either A) preserve capital by sticking your money in “safe” investments that offer a pitifully low yield, or B) put your money at risk in dividend stocks and other high-yield equities and be willing to wait out the inevitable market declines that are inherent in these kinds of securities.
Well, we think this conventional wisdom is flawed, and we know there’s a better way to manage your income assets. You see, instead of the either-or choice of safety vs. yield, we’ve developed a strategy designed to maximize income while at the same time managing the various risks inherent whenever you put money to work in the market.
We call it our “Ultimate Income Strategy,” and when you’re finished reading this report, you should have a good sense of how the strategy works, and more importantly, how it allows your money to work for you.
If you’ve been trying to generate high income but have failed to keep your money safe from volatile market swings, then this report is aimed straight at you.
In The Ultimate Income Strategy, you’ll discover why the right mix of income-generating assets—along with the expertise to navigate in and around changing market conditions—are two key components of a truly successful income program.
By downloading this FREE special report, you’ll find out the secrets of how we manage an income portfolio to deliver the capital preservation and high yield every income investor is after.
So, take the ultimate step, and download your FREE copy of The Ultimate Income Strategy today!
Written by David, August 17th, 2011
On Tuesday, I attended an investment conference sponsored by Fidelity Investments intended specifically for financial advisors and money managers. There were several good presentations, including one from the very smart guys at Pimco. But the real takeaway for me from this conference wasn’t any single good idea. Rather, it was the chorus of trite bromides I heard from a panel of three mutual fund company representatives.
I am not going to name the companies here, and the reason why is that nearly all mutual fund companies have the same basic philosophy—and that philosophy is that whatever takes place in the market, investors should just buy and hold and wait for the market to inevitably move higher.
I was so disappointed with this advice that I just had to comment on it for my readers. You see, all three of these mutual fund reps admitted that they thought the market was in for a struggle over the next several months and beyond. All three agreed that the economy was slowing down, and that it was important for their fund managers to select the right stocks in a difficult market environment. Up until then, I agreed with them. Then they each rolled out the same old expired prescription for individual investors.
That prescription, of course, is to just buy and hold. There thesis was that in three to five years everything would be okay. Huh? I put that kind of inane advice along the same lines as telling someone they should buy low and sell high.
The fact is that a lot can happen in this market in three to five hours, let alone three to five years. I don’t know about you, but just sitting back and watching the value of my portfolio drop isn’t my idea of smart money management.
What was perhaps even more disappointing was the failure by this panel to address the potential of a new bear market. What if we were to fall into bear territory and stay there for a protracted period? Should investors just watch the value of their holdings evaporate, or should they go to cash or go short? Their answers were conspicuously absent.
This panel discussion just confirmed for me what I’ve always known, and that’s that mutual fund herd never changes its spots. These days there are just too many other good options for your money, and these are the options we use each day in our investment advisory services.
Written by David, July 21st, 2010
It’s summer, and the weather is heating up all across America. To cool off, many people will pour themselves a tall glass of ice-cold lemonade. Hey, I think it’s fine if your lemons get squeezed into lemonade, but what isn’t fine is if you have lemons in your investment portfolio.
The lemons I’m talking about here are underperforming mutual funds, funds that have earned a spot on the infamous Mutual Fund Lemon List, the list of the worst-performing mutual funds. To be classified as a lemon, the fund must pass strict screening criteria: it must underperform its peer group average for the last 12 months, as well as for the last three and five year periods.
This quarter’s Lemon List includes 1,584 mutual funds totaling $715 billion in assets, and if one of the funds you own is on the list, you need to squeeze that lemon from your holdings.
To see the latest edition of the Lemon List, and to get your FREE update each quarter, just go to the Mutual Fund Lemon List website today.
Hey, all you have to lose is that sour taste in your portfolio.
Written by David, January 25th, 2010
Most investors sustained serious damage to their wealth in 2008 – damage that, in many cases, will be difficult to recover from. Certainly Wall Street titans, reckless lenders and irresponsible home buyers all deserve their share of the blame.
But one part of the financial world has not received much scrutiny for its role in the evaporation of investor wealth, and that is the mutual fund industry.
Mutual funds control the majority of Americans’ retirement assets through 401(k)s, IRAs and annuities. Sadly, a gullible public has bought into the idea that steady investments in mutual funds, regardless of market conditions, is the way to make their financial dreams come true. This is one of the biggest fallacies of investing, and why mutual funds are hazardous to your wealth.
In my latest special report entitled, Mutual Funds are Hazardous To Your Wealth, I expose the five serious flaws of these investment vehicles and talk about how exchange traded funds are a far superior alternative.
Why? Because ETFs are less expensive to own than mutual funds and more diversified than individual stocks. For most people looking to grow their serious money over the long term, ETFs are quite simply the best investment vehicles available today.
Click here to download this free special report as a PDF.
As a bonus to this report I would like to offer you a free Mutual Fund Assessment – this includes an in-depth review of your investment goals and analysis of all the funds in your portfolio.
This offer is available for goal-oriented investors with more than $250,000 in their investment portfolios. Contact us for a brief introduction and to schedule a phone call time with you to get some help.
To schedule your free Portfolio Review, call us at 800-391-1118.
Sincerely,
Doug Fabian
President, Fabian Wealth Strategies &
Host, Doug Fabian’s Wealth Strategies Radio Show
Note: Fabian Wealth Strategies, Inc. is a registered investment advisor with the U.S. Securities and Exchange Commission. Doug Fabian is a registered investment advisor representative. The information expressed by Fabian Wealth Strategies is for informational purposes only and should not be construed as a recommendation to buy, sell, or hold any specific security.
Written by David, January 20th, 2010
It’s time again for our quarterly lemon-squeezing ritual. That’s right, it’s time for us to expose the worst-performing mutual funds for what they really are — sour investment vehicles that will make your portfolio pucker.
For Q4, 2009, the Mutual Fund Lemon List contains 1,566 mutual funds totaling $651 billion in assets! Now to be classified as a lemon, the fund must pass strict screening criteria: it must underperform its peer group average for the last 12 months, as well as for the last three and five year periods.
Incredibly, out of this quarter’s universe of 1,566 lemon funds, over 38% (a total of 605) actually had negative annualized returns over the past five years.
It’s becoming increasingly clear to me that investors need to wake up to the reality that many mutual funds just can’t perform as well as those exchange-traded funds (ETFs) with the same investment objective. Sadly, the result is that many investors are losing money that they really cannot afford to lose.
There really is no reason to continue investing in under-performing mutual funds. To find out if you own a lemon fund, simply click here.
Written by David, May 01st, 2009
It’s time again for our quarterly lemon-squeezing ritual. That’s right, it’s time for us to expose the worst-performing mutual funds for what they really are — sour investment vehicles that will make your portfolio pucker.
For Q1 2009, the Mutual Fund Lemon List contains 2,335 mutual funds totaling $718 billion in assets! Now to be classified as a lemon, the fund must pass strict screening criteria: it must underperform its peer group average for the last 12 months, as well as for the last three and five year periods.
Incredibly, out of this quarter’s universe of 2,335 lemon funds, over 30% (a total of 730) actually had negative annualized returns over the past 10 years. Even historical stalwarts like Fidelity Magellan (FMAGX) and Fidelity Growth & Income (FGRIX) failed to outperform the S&P 500 (SPY) over the past 10 years.
It’s becoming increasingly clear to me that investors need to wake up to the reality that many mutual funds just can’t perform as well as those exchange-traded funds (ETFs) with the same investment objective. Sadly, the result is that many investors are losing money that they really cannot afford to lose.
The following table shows examples of how much you could have saved if you invested $100,000 over the past five years in ETF equivalents instead of these 10 Lemon List laggards. (click table to view larger)
As you can see, there really is no reason to continue investing in under-performing mutual funds. To find out if you own a lemon fund, simply go to www.MutualFundLemonList.com for my complete Q1 Lemon List.
Written by David, February 16th, 2009
Mutual funds control the majority of Americans’ retirement assets through 401(k)s, IRAs and annuities. Sadly, a gullible public has bought into the idea that steady investments in mutual funds, regardless of market conditions, is the way to make their financial dreams come true.
This is one of the biggest fallacies of investing, and why mutual funds are hazardous to your wealth.
Click here to view my recently published MarketWatch article on the five fundamental flaws of mutual funds.
Written by David, August 20th, 2008
The greenback is back!
That’s right, the value of the U.S. dollar versus rival foreign currencies has surged over the past several weeks, and that surge has caused quite the dust up in the international equity markets.
Just five weeks ago the dollar had been languishing at record lows against the euro. But last week the dollar hit a six-month high against the euro and a two-year peak against the U.K. pound sterling.
The chart here of the U.S. Dollar Index tells a revealing story.
So, why the quick turnaround in the greenback’s fortunes?
I think the basic reason is that the economies of Europe are slowing way down. In fact, the eurozone economy is now flirting with recession. To see the evidence of this we need simply examine the numbers. The 13-nation eurozone economy contracted 0.2% in the second quarter. That was the first decline since before the euro’s introduction in 1999, with the economies of Germany, France, and Italy all contracting.
Furthermore, inflation in the eurozone is running at almost double the European Central Bank’s (ECB) target rate, which makes it unlikely that the ECB will cut interest rates anytime soon. The result is that both European economies and the euro are likely to fall on hard times for a while.
Of course, the other result of the dollar’s surge has been a sharp sell off in international equities. Just look at the recent plunge in one of the biggest international exchange-traded funds (ETFs), the iShares EAFE Index (EFA). Year-to-date EFA is down 20.9%! Now that’s what I call an international bear.
Surprisingly, EFA is actually one of the best-performing international funds so far in 2008. The iShares MSCI Emerging Markets (EEM) has plunged 21.6% this year, and big international markets like China, as measured by the iShares FTSE/Xinhua China 25 Index (FXI), have collapsed 30.6%.
But it’s not just international ETFs that have been hit so hard this year. International equity mutual funds have also languished. Three of the biggest international mutual funds are the Oakmark International fund (OAKIX), down 19% for the year; Fidelity Advisor Diversified International (FDVAX), down 20.3%, and the Bernstein International Portfolio (SIMTX), which has fallen 23.1% year-to-date.
Not surprisingly, all three of these funds are on my Lemon List, the list of America’s worst performing mutual funds.
The bottom line here is that when the dollar is in a bullish mood, international equities tend to turn bearish.
Written by David, August 20th, 2008
The headline above may make you recall the classic movie “Out of Africa.” But even if you’re not a film buff, you need to know that Africa now has become a region with growing appeal for its intriguing investment opportunities. A case now can be made that Africa offers vast potential for economic improvement that could reward intrepid investors who are not timid about taking a bit of risk.
One of the newest opportunities for investing in the region is the Van Eck investment firm’s recently rolled out fund, Market Vectors Africa (AFK). The ETF launched during July, tracks the Dow Jones Africa Titans 50 Index. That index is used for companies that derive more than 50% of their revenues from 11 countries in Africa.
The ETF seeks to tap a fast-growing, emerging region that is becoming increasingly sought after by savvy investors who want to diversify their portfolios. The continent of Africa offers diversification by virtue of the array of the countries there. For example, the fund is most heavily weights companies in Nigeria, 25%; South Africa, 25%; Egypt, 13%; and Morocco, 11%. But the ETF also includes companies in Canada, Norway, Kuwait and the United Kingdom that conduct a majority of their business in Equatorial Guinea, Zambia, Angola, Mali, DR Congo, Kenya and Ghana.
Africa presents a unique growth opportunity for those willing to enter a new investment frontier for a chance at heightened returns. Just how big is the growth potential? Well, Africa boasts 15% of the world’s total population and 20% of the world’s land mass. Yet, the region currently is one of the world’s poorest and least developed. Expect that disparity between the developed countries and the developing African nations to change.
No, it won’t happen overnight. But it will take place in time.
Of course, I will keep my eye on the new Van Eck ETF for possible future investment. However, it currently has a limited track record and falls short of the trading volume of 100,000 shares a day that I like to see before entering a position.
Other reasons that I like the African region for investment exposure include increased trade flows, improved economic leadership, strengthening foreign demand for its goods, economic development initiatives and rising liquidity. At the same time, people in Africa are starting to enjoy increased incomes that will better enable them to buy cell phones, appliances, and cars. In addition, government policies and economic reforms are promoting growth.
The result is that Africa has enjoyed strong growth for much of the past decade. Sub-Saharan Africa’s economic growth has averaged 6% per year since 2004. The region also has produced the fastest pace of growth anywhere in the world during the past three decades. Growth during the last decade has been less volatile and more evenly distributed among the region’s countries than in the past.
As a result, I consider Africa a place to look to find emerging market investment opportunities—and the new Van Eck ETF might be one way to do so.
Written by David, August 11th, 2008
After having just come back from the latest MoneyShow in San Francisico, I want to share with everyone the three presentations that I conducted for hundreds of individual investors.
ETF Strategies In a Difficult Market
Some pundits are saying that we are in a recession; others call it a mere economic slowdown. The answer in my opinion is what difference does this technical distinction make to you? The one thing everyone agrees on, bull or bear, is that were living in uncertain times. As a result, it is of utmost importance for us to take a cautious approach. These ETF strategies in a difficult market will teach you the importance of managing risk, having a sell discipline, and benefiting from new opportunities.
Structuring a Portfolio for Income and Safety
How do you get a decent income return without risking your principal? Are you tired of putting your money in poorly paying CDs or money market accounts? I reveal my favorite income producing tools in this presentation to boost the yield in your portfolio without taking on excessive risk. Learn how to use exchange traded funds, unit investment trusts, and closed end funds to properly manage your income assets.
Seven Secrets of Success for ETF Investors
In this presentation I reveal the seven secrets for successfully managing your portfolio using my favorite investment vehicle, exchange traded funds. ETFs are simple, easy, inexpensive, diversified, and fun. Learn how to manage any size portfolio using these proven methods to manage risk and maximize returns.
