Saturday, May 9, 2015

Just do as I say….


“Put your money where your mouth is” certainly isn’t right at the top of the list of pearls of wisdom on investing.

However, Morningstar recently reported that half of all mutual funds are managed by folks who don’t have even a dime of their own money invested in their own funds.

Morningstar, the high-profile investment research and management company, says “After all, like a chef who won’t eat his own cooking, a fund manager who doesn't personally invest in the fund he manages tells us something important about confidence and commitment.” Funds whose managers have $1 million-plus of their own cash invested have a better track record than funds with no holdings by their own managers.

This detail about managers’ personal investments is available in each fund’s Statement of Additional Information in the annual report.

I think it’s rather dumb for a mutual fund manager to fail to put her own cash into the fund. It's an integrity thing....









Copyright © Richard Carl Subber 2015 All rights reserved.

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