Mutual Funds are for Losers "Opinions Please"

[cptacek]

Well, I forwarded the John T. Reed article on to some family, and one of my sisters completely blew a gasket when she read it. I guess Rich Dad, Poor Dad is her favorite book, and Robert Kiyosaki is hugely important to the cult she calls her business (Quixtar - formerly Amway). I thought it might open her eyes, but I think it just added more "fire to her desire" to prove us all wrong.

[essyweb]

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?

[bjl584]

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?

4 year old thread.

[elessar78]

On my NFL team forum a new thread entitled "stocks/shares/investments" popped up. The vast majority out there, let's just say, don't think like we do here.

There is even a huge disconnect between concepts like saving, time, and investments. One guy told me that he wasn't looking for advice on how to utilize his time when I mentioned 15 and 35 year "horizons." He didn't see his investments as a form of savings. There's a vast love of market timing and individual stocks and plenty of derision for mutual funds and index funds. Everyone out there just believes in their own ability to beat the market.

[Joan.of.the.Arch]

elessar78, that reminds me of the effect that was being written of in all kinds of applications about three months ago: That the less competent one is, the more competent one tends to think one is. One thing I cannot abide is financial talk embroidered with a lot of bravado. On the internet, fortunately, all I have to do is *click*, and it's gone.

[elessar78]

sample of a response that encapsulates that discussion:

"I have no doubt that I'm right and that the entire bond market, most of academia, the BLS, and AARP are wrong so I guess if I strike out it wont be due lack of confidence."

this is said with no sarcasm, when confronted about his theories on precious metals as hedges against inflation.

[dczech09]

Just because the guy is a "New York Times Bestselling Author" does not mean that he knows what he is talking about; it just means he did his homework and figured out how to effectively market and sell his product.

I totally find the article alarming. First of all, if its not possible to win with mutual funds, then someone please explain how I got 20%+ returns in 2010 and my father is pretty close the millionaire mark with his investments? Explain why there are mutual funds on average going up 10 to 12% per year but the house only takes a >1% vig?

His tax statement does not make sense. I agree that yeah he seems to be confusing mutual funds with annuities/plans; does he realize that the arrangements are just specifications for how the investment is organized and taxed? Also, there is no mention of Roth IRAs in the article. Seems to me like he avoided that topic for a reason.

The statistical expected return on lotto or a slot machine is negative; you're expected to lose money on a statistical stand point. The odds of hitting it big in power ball is less than getting struck by lightning. Now, I have never been struck by lightning and don't plan to; what does that say about my chances of "winning big?"

It definitely is a fascinating POV, but totally faulty. If mutual funds are supposedly not gonna help you retire with dignity, then what will? I guess we have to check out his website for his next "genius idea."

I have read RDPD. I liked some of the philosophy but did not like the logic.

[MrPolarZero]

Well, I don't really agree with his assertions. The thing is, how you handle the investment is the single biggest factor that will determine whether it succeeds or not.