OT:Migrating Mutual Funds

[JohnS]

I'm getting sick of mutual funds that change their investing strategies. I've had two mutual funds with (previously) good morningstar ratings that have changed focus and now suck. One was a LV (Clipper) and the other was an MV (Weitz). They are now both LB's and suck. Why do they do this? Are they chasing the market? Just when you get a good portfolio, they throw a wrench into it. Where are the good Value funds? I just bought Gabelli, and they immediately went to a Blend! Am I just having bad luck?

[thejen12]

Have you thought of trying a non-managed index fund? It will always track whichever index you pick, total stock market, S&P 500, etc. Expense ratios are super low and no churning, so you don't get hit with a big capital gains tax at the end of the year.

I haven't looked for a "Value" index fund, but they might be out there. Vanguard has a lot of index funds.

Good luck,

Jenn

[regularguy412]

I own a couple of Davis funds that have been quitely plodding along at about 7.5% apy. I rolled part of my 407(k) from a previous employer into these abput a year ago. 'Course, I'm in this for the long haul,, being it's an IRA. So, 7% - 10% is quite satisfactory for me.

I put the major part of the IRA into bonds,, I'm a bit squeamish about the market re: retirement accounts. And seeing as now China owns about 1.3 trillion in USA frns, I've actually considered buying precious metals. :crap:

Mike in AR

[gasman]

I think part of the problem isthat the boundries between growth/value/large/medium/small cap become very blurred over time. Your value funds may not have changed their strategy so much as the stocks they purchased may have grown-the P/E would rise and hence could no longer be called value stocks.
This is a simplistic answer only if you analyze the portfolios over time can you tell why they changed. Index funds and ETFs keep looking better to me over the years as the costs are very low for these and they tend to perform fine (well average returns by defintition) over the long run compared to actively managed funds.

[JohnS]

I have an S&P 500 index fund as the core of my IRA, but I like to dabble with some actively managed funds. It seems the Growth funds stay in a sector but the Values bounce around alot. I'm not so concerned about them moving from Small to Mid to Large but more the Value to Blend shift, wich seems to be an alteration of their core strategy...

[keno]

Dodge & Cox has always been one in my sites, and for many years.

keno

[93legendti]

You need to get away from Mutual Funds and get into managed accounts to avoid the old switchero--or just buy stocks yourself.

[Louis]

John,

If you listen the B-school finance guys and folks like Malkiel (sp?) this is what they say:

If you think you're smarter than the pros and have access to information which they don't have, then pick your own stocks, trade options, and speculate in the commodities markets. If you don't think that you're smarter than everyone else buy low expense-ratio index funds and keep buying them over time and don't worry about it.

Louis

[norman neville]

I'm getting sick of mutual funds that change their investing strategies. I've had two mutual funds with (previously) good morningstar ratings that have changed focus and now suck. One was a LV (Clipper) and the other was an MV (Weitz). They are now both MB's and suck. Why do they do this? Are they chasing the market? Just when you get a good portfolio, they throw a wrench into it. Where are the good Value funds? I just bought Gabelli, and they immediately went to a Blend! Am I just having bad luck?

index fund.

index fund.

index fund.

index fund.

index fund.

find a few you like. index fund.

[Yukonjack]

Sounds like your problems could be solved with index funds. Take a look at vanguard.com They have quite an impressive selection of index funds with very low expense ratios. Good luck.
The financial forum at diehards.org is also helpful.

[Bud_E]

My understanding is that over the long haul index funds do as well as managed funds but because of the low costs they actually do that much better. Also if you are holding them outside of your 401k or whatever, they are tax efficient because there is relatively less turnover of the stocks they hold compared to managed funds.

The problem with mutual funds and stocks is that you always hear about your friend or coworker who happened to be holding the fund that went up 200% in one year and the tendency is to chase the funds/stocks that already had their run. I always think about how easy investing would be if I could just tell the future. :beer:

[Too Tall]

+1 Vanguard.

[keno]

in my view, there is some good information in this thread but it is incomplete. Contrary to what has been said, there is a small class of fund managers who have statiscally proven over a long period of time that they do better than the market (it is quite a long time, on the order of 12 years, or so, of performance in order to draw this conclusion statistically). Such stars are as rare as hens' teeth and not worth chasing in my view (they also create their own "wall" inasmuch as over time their funds attract amounts of capital that emasculate their ability to invest according to their style, examples being Warren Buffett and Peter Lynch). Many funds, and what has become somewhat usual, is a team of managers associated with a fund in order to eliminate "stars," who may up and leave, and the team creates and perpetuates a consistent investment decision making process over a long period of time.

In any event, if I were going to construct a portfolio of index funds, I would first read William Bernstein's "The Intelligent Asset Allocator" (http://www.efficientfrontier.com/) and use it as my guide. Similar to investing in stocks, a level of diversity is necessary in investing in index funds. Bernstein provides great insight in portfolio construction and rebalancing, usually on an annual basis. Incidentally, "The Four Pillars of Investing" is excellent and readable and fully explains index investing. The other information and links he provides on the website are excellent, as well.

Good luck,

keno

[BURCH]

I have been pleased with American Funds (http://www.americanfunds.com/funds/returns/alphabetically.htm) for close to 7 years now. Some of their funds have performed well for decades.