IFO beats mutual funds! They lost $$$ this year, IFO didn’t

 What did we tell you?

Almost everyone – even Dave Ramsay!!! — says you should buy one or maybe even many mutual funds. It’s safer. You aren’t an expert, so you couldn’t possibly do as well as the clever analysts who are paid to pick stocks for their mutual funds.

Yet, in USA Today, we read: Most stock funds post losses this year; bonds gain.

The average diversified U.S. stock mutual fund has fallen 5.9% this year, vs. a 1.4% loss for the Standard & Poor’s 500-stock index, says Lipper, which tracks the funds. Out of 8,036 funds, 7,399, or 92%, are showing a loss — and some are doozies.

After reading that, we rushed to our financial software, Quicken, which tracks, well, whatever IFO wants, but in this case, we were tracking “Average Annual Return (%) One Year.” Result: UP 10.83 percent. And that doesn’t include stocks held less than one year, of which there are a few. We didn’t do much trading this year. Trading usually loses money.

So, what did IFO tell you? Hmm? Now will you listen to us? We have never gone as high as the DJI or as low. We’ve always been somewhere in between. Just where we want to be. We’re not diversified. We have kept legacy stocks, though we heard a quick intake of breath when we explained to a wannabe advisor that we didn’t want to sell them.

We could almost hear him thinking, “She’s a dotty,  unsophisticated  female investor. She’ll get very poor returns. She should let me advise her.” Hyar, hyar, hyar. Oh, and we’re not “diversified” either.

BTW, one of the worst performers in the portfolio (the real one, not the pretend one) is a legacy mutual bond fund! It’s up 6.78 percent. A gold stock is negative for the year, but up overall.  About three stocks are negative for this year, but all are up overall.

Investment lesson: look for good and rising dividends, worthy CEOs, solid industries (no financials or real estate), hang on to the companies you like, dump the ones you don’t.


About InvestingforOne

I've been investing in various assets by myself using a discount broker for many years. Over that time, I've developed some theories that others might find useful. Plus, there is more to investing than money. Time, talent, work, friends, family all go into developing a good and satisfactory strategy.
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