Ask The SEC

Who is the SEC and why should I ask them anything? The Securities and Exchange Commission in Washington, DC is the government bureau that regulates the securities industry. They make the regulations that all stock exchange listed companies, brokerage houses and mutual funds must follow.

My readers know that I am a believer in the purchase of mutual funds for investment and retirement accounts. The reason is that very few people are qualified to choose stocks. Unfortunately that also applies to many mutual fund managers especially when you look at the performance of the majority of funds for the year 2000.

I can excuse the average Joe for not being able to pick winners, but I cannot excuse a fund manager who is paid huge amounts of money (always 6 figures and mostly 7 figures) to lose the cash of the little people who invest. There are 77,000,000 owners of mutual funds and 80% of them have less than $50,000 in their accounts. Why is anyone giving them their money to have them lose it? These are the "experts".

Yes, they are accountable to you, but there is only one way to make that accountability register and that is to close out your account. If you are losing money then take it away from your current "expert" and put it with a mutual fund that is currently going up. And when that one starts down you switch to another one that is going up. My experience shows you will not be changing more than about once or twice a year. But you will not give back 30% to 50% of your money by doing this.

You see mutual fund managers are paid not on performance, but on how much money they have in the fund. That is one of the reasons they always tell you to Buy and Hold. You buy. They hold. They make money. You don't.

Back to the SEC. Here is what you need to ask them. Why can't mutual fund managers be paid a percentage of the profits they generate rather than skimming a percentage off the top every year even when they lose the customers' money? I doubt you will get a satisfactory answer, as you can be sure the mutual fund lobby has more influence than you do. The same may be true if your Congressman were to institute that as a law. He gets campaign contributions from the lobbyists.

This rule is already being allowed for hedge funds, which are very similar to mutual funds; however, only rich people can buy these. Maybe it is time someone had the SEC look after the interests of the small mutual fund investors. If you get an answer please let me know.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005

---

Buying Florida Investment Properties and Where Its Hot

Relaxing in Style: Florida Investment PropertiesIn Florida, relaxing in the... Read More

The Switzerland of Asia Shines

In many respects, Singapore is the Switzerland of Asia.Begun in... Read More

Going Offshore For Asset Protection

There are a number of key reasons why individuals and... Read More

Success Trading: Some Basic Terminology for New Traders

The world of trading can get very complex because the... Read More

College Savings Plans ? Are They The Best Choice For My Child?

College Savings Plans ? are they the best choice for... Read More

Wit and Wisdom on Money, Wall Street and Success - Part #4

Can you concisely summarize your investment philosophy in a few... Read More

Caveat Emptor: You May Owe Taxes Despite 401(K) Losses!

One among many ways you lose money in non-indexed mutual... Read More

Stocks: Reduce Risk Yet Maximize Profits

It is important to note that every smart investor wants... Read More

An Introduction to Offshore Investing

Once upon a time, offshore investment strategies were spoken of... Read More

Numismatics are for Collectors, Not Investors

As a precious metals investor, you may heard much about... Read More

Gold; What Type of Gold to Buy

JewelryThe advantages are:? Gold Jewelry is the easiest of the... Read More

The Economy Is Not The Stock Market

Several days ago, the Commerce Department reported that May's factory... Read More

Diversify!

The best way to avoid being hit hard by a... Read More

Asset Location ? Increase Investing Returns & Reduce Your Taxes

Location ? Once the holy grail only for real estate... Read More

Why You Need To Buy and Sell Gold Coins (Part 2)

How to Collect Rare Coins For Fun and ProfitTime has... Read More

California Deparment of Corporations and Franchise Opportunities Law

What CA Needs To Do To Address Issues in FranchisingWe... Read More

Moving Average Convergence Divergence ( MACD ) Charts

The Moving Average Convergence Divergence charts, or MACD charts for... Read More

Pros & Cons of Investing in Bonds

What are Bonds?A bond is a debt security, by which... Read More

Retirement is Never Urgent Until

If you're like many people, your retirement savings have not... Read More

Almost Anyone Can Open A Roth IRA!

The Roth is kind of weird until you get used... Read More

Learn How to Lose and Risk Management

One of the leading traders on Chicago Mercantile Exchange, because... Read More

IF - The Wonders of Investing

If it seems... Read More

Stock Market Horizons: Gold $3,000, Oil $70

In the last two decades, even though gold prices have... Read More

Angel Investors: Who They Are & When Are They Appropriate

Angel investors are individuals who invest in emerging business ventures.... Read More

Expand Your Pool of Investors for Your Company

If you own a company that sells complicated products and... Read More

Four Key Components To Building A Trading System

Need some insight on what you should really be striving... Read More

Which IRA Is Best For You?

An Ira is one of the greatest ways to save... Read More

Easily Finding A Good Stock

There is a tremendous amount of software, complicated high priced... Read More

Porters Five Forces Analysis

If you've ever listened to Warren Buffett talk about investing,... Read More

What is an Investor Ready Business Plan

A Business Plan, as all good entrepreneurs starting out in... Read More

How to Use Annual Report

There are many steps in calculating the fair value of... Read More

Is Offshore Banking for You?

You've probably heard about people who keep their money offshore.... Read More

How to Analyze the Veracity of Investment Newsletters

When trying to analyze whether a promotional ad for an... Read More