Get Your 2023 Mutual Fund Report Cards on Every Fund in Every Category!

Bang for Your Mutual Fund Buck

Uncategorized Oct 24, 2018

Looking for bang for your mutual fund buck?  These 41 funds have very few holdings - as few as four! 

Listed by category:

Continue Reading...

Even Long-Term Past Performance Fails as a Fund Selector - Update!

 While many investors and financial publications alike gravitate towards funds with a recent hot past - like last year - investment professionals prefer to look at the consistency of long-term past performance.  But is long-term past performance any better at predicting future mutual fund success?  I have been researching the answer since 1997.

 I have examined the in-category performance of every equity mutual fund in every category during consecutive 5-year periods.  The first survey looked at the returns of the period 1988-1992 with the follow up performance of 1993-1997.  Since then, I have conducted ten such surveys.  The conclusion — long-term past performance is terrible at predicting future fund success!

Not trying to be too demanding, I only asked top quartile funds from the first period to repeat top quartile performance in the second period.  Combining all ten surveys, I found that only 21% of the top quartile funds of...

Continue Reading...

You Won’t Know It’s a Good or Bad Year In the Stock Market Until the Year is History

Uncategorized Feb 21, 2018

Everyone wants to know what the market is going to do this year.  They wanted to know what it was going to do last year, and they will want to know what it is going to do next year.  Most investors base the year’s fortunes on the current day, week or month.  I believe the market will not let us know if it is going to be a good year or a bad year until the year is history. 

 The S&P 500 has produced 68 “Up” years; however, 30% of the months of those up years produced negative returns.

even-more-confusing, Of the 24 "Down" years in the history of the S&P 500, 40% of the them produced positive returns.  In particular, the year 1976 produced an impressive return of 23.61%, but 7 of the year’s 12 months produced negative returns.   If that was 2018, good luck hanging in during the 24/7 news cycle!

Deciding what to do based on what is currently happening in the market might feel right, but history would suggest...

Continue Reading...

A Classic Example of Front-Running Media Hype


While this piece is dated, we post it to the blog from time to time, lest we all forget!

 In 2002, we authored a piece entitled A Classic Example of Front-Running Media Hype.  We wrote the piece because we were outraged by all of the media hype surrounding the American Heritage Fund (AHERX) and its manager Heiko Thieme.  Here is why.

In 1989, Mr. Thieme, known as the Rocket Man, (no, not that rocket man!) was named “Best Investment Advisor” at the International Investment Congress.  I guess his past record at American Heritage was an inconvenient truth:

1984 - lost 25%
1987 - lost 19%
1985 - lost 14%
1988 - made 2%
1986 - lost 26%
1989 - lost 3%

In the first quarter of 2002, the American Heritage Fund was #1 in the world, putting Thieme back on all the talk shows, and, true to form, in May of that year, Business Week said Heiko had “a sixth sense for stocks.” In spite of an awesome record of success from 1991 through 1993,...

Continue Reading...

The Forbes Honor Roll - a history of failure!

Forbes Magazine’s annual honor roll of mutual funds is met with great anticipation by much of the investing public.  After all, the fund research from such a prestigious publication should provide investors with a great opportunity to assemble a most prosperous portfolio; but, is that how it turned out?  Did Forbes Magazine succeed in providing investors with an outstanding tool with which to choose mutual funds?  Answer in a word:  NO!

From 1990, Forbes placed 292 funds on its most prestigious annual Honor Roll, with annual qualified listings of 10 to 20 funds.  Over the years, the honor roll actually consisted of only 104 funds, with many of the funds making repeat appearances.   Surprisingly, it would be difficult to build a properly allocated portfolio out of the honor roll funds, as they represent only a few of the different investment categories.

 The simple mathematical odds of a fund achieving a certain performance quartile...

Continue Reading...

50% Complete

Two Step

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.