Mutual Funds are for Losers "Opinions Please"

**rooskers** · 05-01-2007, 09:41 PM

Sorry if this post should have gone in the Investing section oops.

**Scanner** · 05-01-2007, 10:14 PM

I have to say, the more Pat Kisoyaki speaks, the more he demonstrates how ignorant he is. It's really unbeleivable and fantastic he has a best selling line of books.

Omigosh, I don't know where to even start but I'll just hit some key points.

I visit yahoo's forum regularly and read some of the experts there. I have to say hands down, his advice/philosophy/knowledge is some of the worst out there. I know people around here hate Suze Orman but Suze Orman looks like Warren Buffet compared to him.

Yet, I'll admit, he has a "cult following" with his seminars and other peripheral products. He's got fans who just adore him and I can't figure why because many people lost their shirts following his real estate flipping advice.

He's very anti-mutual funds and he has in the past claimed that 80% of the profit is just taken by the institution but doesn't really explain how this is so (compared to the .5-2% management fee +/- loads). These funds are required to produce accounting statements to the SEC or some regulatory body, I would imagine.

He also seems to be mixing up "pensions/annuities" with mutual funds in his essay here as he keeps referring to the gov't.

He has little to no comprehension of "risk and reward" which are fundamental tenents to investing.

For instance, he says mutual funds are gambling. Well, not exactly. Gambling is risking money on an outcome, let's say "Red" in a spin of Roulette in Atlantic City. Investing is actually ownership. When you own a mutual fund, you are part owner of many different companies. It's not really the same as gambling although there is certainly risk present.

Sure. . .I can maybe see a roundabout point in that you can own a crappy mutual fund that just loses year after year after year (1 star Morningstar Rating I would imagine). So. . .some due dilgence is necessary to pick funds that are 3, 4, or preferably 5 stars (my Janus Overseas Fund had dropped to 3 stars one year but has a great track record for the long haul).

I do think there does come a time to jump ship and just concede the manager in charge was bad.

Well, without going into a dissertation here on Kisoyaki, let me give my testamonial - my mutual funds have made me money and I don't liken it to winning the lottery. I don't think I am some kind of genius at Roulette.

**safari** · 05-01-2007, 10:23 PM

How can this guy be considered an expert is beyond me.

Also, why is Yahoo paying him for the article he didn't write? The article was lifted from Tom Wheelwright's Blog, where it was originally posted on March 15. Kiyosaki only made small changes to the article before publishing it on Yahoo.

**disneysteve** · 05-11-2007, 08:32 AM

What a moron. Stuff like this is incredibly irresponsible. Especially because there will be those who actually believe him. Some poor schlub will stop contributing to his 401k, start buying lottery tickets and end up living on the street eating cat food in retirement. I'm amazed that anyone considers him an expert on anything if this is what he believes.

What is his preferred alternative? Individual stocks, perhaps. They do offer advantages to mutual funds from a tax standpoint, but they certainly can't replace the benefit of a company plan with a 50% match from the employer.

**Ima saver** · 05-11-2007, 11:07 AM

I read his book and didn't really like it. I have been in mutual funds for almost 20 years and I have been pleased with most of them. Index funds make it easy.

**thekid** · 05-11-2007, 01:21 PM

This guy is just plain dangerous. I can't believe Yahoo Finance accepts to publish this garbage. I understand that it gets them hits, but the hit to their credibility is much greater.

**jmjj215** · 05-21-2007, 08:58 AM

As soon as I saw the author, I disregarded the content. He thrives on saying contrarian things, while at the same time not really saying anything at all.

**buzz** · 05-22-2007, 11:21 PM

I was actually going to read "Rich Dad, Poor Dad". I'm glad I read the Yahoo column first. I was barely into it and my bs detectors were going crazy. What a con artist.

**jmjj215** · 05-23-2007, 04:26 AM

Originally posted by buzz View Post

I was actually going to read "Rich Dad, Poor Dad". I'm glad I read the Yahoo column first. I was barely into it and my bs detectors were going crazy. What a con artist.

Besides the fact that I think 90% of that story is fabricated, I do like some of his ideas in that book. I've read two others (cash flow quadrant and investing something or other) and they were absolute garbage. He said the same thing (nothing) over and over again.

**Broken Arrow** · 05-23-2007, 05:14 AM

I've complained bitterly in the past about Robert Kiyosaki.

I've got nothing against him, as he seems a like a very affable guy (which is probably why he has a following).

However, I most definitely do not agree with many of his financial advices.

**JBinKC** · 05-23-2007, 06:11 AM

I agree with him to a point. 401Ks are only good to what your company offers in investment options and you are relying on a very narrow selection of options even though it is so called "diversified".

I calculated my return over a 13 year period using mutual funds at work and excluding company matches was barely over 1.5%. That is absolutely pitiful a monkey and a dartboard probably could do better.

Fortunately since January, I have control over that money now in a self directed IRA and over that time my return has bettered the cumulative of the 13 years.

**sweeps** · 05-23-2007, 12:27 PM

JB, but you're an extraordinary stock picker, so any mutual fund would be a waste for you. Not all of us can be that lucky. I'm not sure what funds you had available in your 401k, but it would be pretty hard to only earn 1.5% over 13 years -- were you 100% invested in commodities or something?

**JBinKC** · 05-23-2007, 01:56 PM

BTW the 1.5% is the compounded return of the fund.

PBHG Growth and Janus Worldwide were the only two growth choices within my 401K and was stuck with for the first 10 years of the plan. Nothing at all plain and simple like a Vanguard fund ever offered. It was always a fund with a catch. Then we had a plan switch and I said screw it and did a GIC for the remaining 3 years.

By the way I am not totally against mutual funds. I wish I had the option to invest with Sprott Asset Management out of Canada.

**scfr** · 05-28-2007, 03:54 PM

I just briefly scanned this article when it was first posted and thought it sounded like a bunch of BS, but since I had the time thought I would go back and re-read it thoroughly. Sometimes you can find a pearl of wisdom buried in a pile of manure. Not this time tho'. No pearls anywhere. It's just a great big pile of manure.

Mutual Funds are for Losers "Opinions Please"