If you've been following the markets the last few days, you might have noticed the slight slide in the markets. My Own Advisor must be getting excited, because I know I am. If you own mutual funds, there's a good chance your "Units" are worth a little less then at the beginning of October. And if your units are worth less, then your return on your investment has gone down as well. A mutual fund supplier or "pusher" would tell you this is a great time to buy more units while the markets are down. After reading a mutual fund investors strategy in the Globe and Mail's Me and My Money article from two weeks ago, I had to read it twice before I believed it.
To quote the article, " Mr. Flynn, who lives in Peterborough, Ont., sticks to very conservative mutual funds. He counts it as a bit of a victory that he’s down between 11 and 15 per cent since 2009. “I’d have to say that’s not that bad. Lots of folks I’m talking to are down 25 per cent.”
He is happy that he's making -13%. In case your reading this post on an Iphone, that's a negative 13%, and he's happy because his friends are doing worse. That's like installing a $10,000 car stereo in a $1000 Dodge Neon; It makes no sense!
I'm making over 5% now with my dividend investment. Notice I said making because I know exactly what my return will be this year. My portfolio could drop 25% and I'd still make over 5% from the dividend income. In fact I would be very eager to buy more common shares if my portfolio dropped that much and I would make even more then a 5% return. If a mutual fund investor's portfolio dropped 25%, panic would ensue but they will feel better knowing their friends did even worse. We need to stop the madness of nonsense investing. I can see the commercial now...
For just two minutes of your time, you too can change the life of a mutual fund investor. Explain to them the theory of dividend investing, and that a negative return is not ok. Save the retirement savings of someone you care about, today.
Do you know someone afflicted with mutual fund investitus?
2 comments:
Hey Addicted - yes, I am getting excited! I have little funds to make any purchases right now, we're going on a trip and moving soon, but I will however be saving what I can to make an ECA or EMA purchase in the months to come. Even 50 shares would be a nice start :)
"I'm making over 5% now with my dividend investment. Notice I said making because I know exactly what my return will be this year. My portfolio could drop 25% and I'd still make over 5% from the dividend income."
Well said my friend. Gotta love it. I wish I was investing like this in my 20s.
To answer your question, my parents used to be inflicted with mutual fund-itis, but that's changed since I stepped in. My parents didn't know what MERs were, how their funds were doing, etc. up until 5 years ago.
Good, fun post :) Enjoy your weekend!
Ya I do ,all those poor Bas...ds I used to work with who are stuck in a mutualfund DC company plan.Sure they're getting a matching contribution but it's small comfort that while you watch your money going down the drain, someone else is adding to it.
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