Stop Buying Mutual Funds

DSCF0021Anyone will a little education and experience can invest on their own.

When hiring a painter, drywaller or plumber, you'll have a good idea of the costs for parts and labor. You will also be guaranteed that the job will be done professionally and with the highest degree of integrity and quality. When it comes to investing, people are generally not as informed. Fees have a major impact on returns to investors. The higher the fees, the lower the expected return. Financial planners and advisors like fund products with yearly fees. This means bigger incomes for them and lower returns for you. They also aren't likely to share information that will help you make better informed decisions.

"Mutual fund companies rarely discuss individual stocks and companies in any detail, because they wouldn't want you to get too familiar with the names of companies in Canada and around the world. The fund companies don't want you to get the notion that you could buy these stocks on your own."

Chapter 4: Why Stocks and Bonds are Better than Mutual Funds

Once you become an independent shareholder, an annual report gets mailed right to your door. This contains a multitude of useful information and highlights that are critical to the success of long-term investors. Lists of companies in Canada that make up the Toronto Stock Exchange's 300 composite index, the Dow Industrial Average and the S&P 500 in the United States, and the most successfully foreign multinational firms are grouped by industry along with a brief description of the products and services they provide to the public.

Mark J. Heinzl is a reporter with the Wall Street Journal and the Dow Jones Newswires in Toronto. He has also written for the Globe and Mail. Topics covered include Canadian business, finance and investments. The inspiration for this book was partly due to the author's grandmother, who had received bad advice from a professional and as a result, lost most of her life savings.

Go to top