Comments on: What To Look For When Buying Mutual Funds

By: jim25

jim25 — Thu, 09 Dec 2010 06:37:47 +0000

JR can u explain to us what is the Sharpe Ratio..?

By: JR

JR — Tue, 13 Jul 2010 18:05:50 +0000

@Noel…. If I read your input correctly, you are about to be scammed. Please do not buy ANYTHING investing related with Fees higher that 1.5% ….

The best of the best Money Managers in the world charges 2% off of assets.

@ Tyrone, you missed the most important factor when choosing a mutual fund – Sharpe Ratio.

To all Mutual Fund investors the Fund fees is your road map, the Sharpe Ratio is your car to get you to your destination. You need both a “Good Map, and a Reliable Car.”

By: JR

JR — Tue, 13 Jul 2010 17:52:46 +0000

The best time to invest is during a recession! “Be greedy when others are fearful, be fearful when others are greedy.”

Also, buying low, selling high and timing your purchase and exit points defeats the purpose in “investing” in a diversified mutual fund. Please refrain from this tactic.

Ask yourself are you an investor or a speculator?

By: Tyrone

Tyrone — Wed, 16 Dec 2009 03:51:18 +0000

Hi Noel,

That’s not a “normal” mutual fund. Are you sure it’s a mutual fund? Or is it a variable life insurance? Did you fully understand the contract and asked the agent why the fees were that high? Variable life insurance is an insurance products that has an investment allocation. Thus it somehow mimics that of a mutual fund.

For instance, you availed of a variable life insurance that invests in equity funds. Part of your investment would be used to pay for the life insurance premium and another part of it would be invested in mutual fund (i.e. equity fund). This kind of investment acts more likely as a retirement fund.

I suspect that it is a variable life insurance and that the “fees” that agent is talking about are actually the deductions that will be invested as a premium in life insurance. You really need to ask further questions and ask the agent in detail about that kind of investment.

By: noel c. villaceran

noel c. villaceran — Wed, 16 Dec 2009 00:30:37 +0000

dear tyrone,

I am an avid reader of your blog.
I try to invest in mutual fund through ‘PHILAMLIFE ABUNDANCE”
The story goes like this.The agent presented me the facts.The whole package of the contarct is 10 years. I will invest every year P50,000.00, in the first year the will charge my investment 60%,in the 2nd year 40% and 3rd year 30% and the remaining year 4th to 10 yrs is all waht i got, no charges at all.I feel so strange as i am neophyte in this investment is it really taht high the professional fee being ask throught the client when investing this product.Can you give some advice so i can pursue this investment as not to watse my hard earned money.

thank you,

You can reach me my email add:ncv1215@yahoo.com

By: Tyrone

Tyrone — Thu, 26 Nov 2009 06:33:32 +0000

Hi Tim, yes, your broker should disclose the fund manager’s professional profile. I am invested with Sun Life Mutual Fund and they sends me a nice-looking glossy booklet of the fund’s performance. The professional profile of fund’s managers are there.

By: Tim

Tim — Thu, 26 Nov 2009 03:56:33 +0000

Would my broker disclose their fund managers’ professional profile? I’m also planning to invest in Sun Life.

By: Tyrone

Tyrone — Tue, 24 Nov 2009 05:09:57 +0000

The sales fees are one of the reasons why I prefer UITFs over mutual funds. In UITFs, all the fees are already imputed in the Net Asset Value Per Unit (NAVPU) of the fund. However, I believe that mutual funds are more transparent in terms of disclosure of investments, etc.

By: cris

cris — Tue, 24 Nov 2009 04:06:24 +0000

They’re just a month old.
Maybe after a year or two, I could see some results.

By: Tyrone

Tyrone — Tue, 24 Nov 2009 02:21:57 +0000

So what are your findings? Which fund gives the best return between the two? My guess would be equity funds. Am I right?

By: cris

cris — Tue, 24 Nov 2009 01:28:37 +0000

I recently invested in mutual funds. Back then I was choosing between a balanced fund or equity.

Heck, for the “fun” of it, I placed an equal amount in both, hehehe, just to see to who will give the higher and more stable return.

By: trader

trader — Mon, 23 Nov 2009 16:49:30 +0000

I think it’s hard to “buy low and sell high” when you’re invested in mutual funds because you still have to factor in their insane sales fees. If you’re sure that this is already the “market low” and that in 5 years you’re sure that it will be the “market high,” then maybe you can do just that (since the fees are usually waived in 5 years time).

Btw, I’m a professional trader, and even I can’t say that the market is already topish at 3000. The market can just go on further and may even hit 6000. Or it can go back to 1000. No one can tell. So, I agree, if you’re a long-term investor (which means you suck at timing) and you have a constant stream of cash, just do peso-cost averaging and invest a set amount in your mutual fund every month (do not miss!). Eventually it will work out. Do not strive to buy low or sell high because there’s no such thing as “low” or “high” in the market.

By: Tyrone

Tyrone — Mon, 23 Nov 2009 16:11:36 +0000

@ Reyjr. Your strategy is correct. Had you pulled out your mutual fund investment during the height of recession last year (I guess it was September to December), you might have incurred a big loss back then. Since you held at your investment and the stock market has appreciated a lot since then, you just minimized your potential losses.

By: reyjr

reyjr — Mon, 23 Nov 2009 16:03:59 +0000

yep, now we are on the same page. my investment was since last year. I did not bother to pull out the money during the recession – which was a mistake.

I agree with your strategy – actively taking advantage of highs and lows is a must for any mutual fund investor!

By: Tyrone

Tyrone — Mon, 23 Nov 2009 15:55:10 +0000

No, it’s not low. Instead, it’s high and the probability of gains is low while the probability of loss is high.

If you invested within the year, I guess you are better off right now since the stock market has picked up in the 3,000+ index already.

I guess one of the strategies that should be implemented in mutual fund investing is “cost averaging”. That is, an investor should regularly invest taking advantage of the highs and lows of the Net Asset Value Per Share (NAVPS) of a mutual fund.