Volatility and disruption kills value. Learn about asset allocation, risk reduction and diversification optimization in the age of the post 2009 Global Financial Crisis and now the 2020 COVID-19 Pandemic. Make effective investments to protect, grow, and preserve capital.
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Figure 1 (click to enlarge) The mutual fund industry consists of a complex web of connections, many to many relationships, wherein information is exchanged for value. Dissecting each class of member in this diagram, you can imagine what type of information trades for what types of value. Value is created at the source, where mutual funds are generated and managed. Better fund cosntruction results in better value. Skilled fund managers tend to attract more assets under management (AUM). Even unskilled fund managers can too, if they have really good marketing, and good distribution via the channels. Skilled and unskilled investors gain access to that value thru a variety of channels, and are willing to pay management fees for that value. Some call this value "alpha", that is, the amount of return gained above what the market would otherwise bear. We can't forget risk, so investors are also 'buying' a certain degree of mitigation of risk which is another form of v...
!!! PLEASE HELP VICTIMS OF THE MASSIVE JANUARY 12, 2010 EARTHQUAKE IN HAITI !!! Please Donate Now http://www.unicef.org/ http://www.care.org/ http://www.doctorswithoutborders.org/ http://www.redcross.org/ And many other organizations here … http://www.google.com/relief/haitiearthquake/ For more information see the U.S. Department of State Official Blog http://blogs.state.gov/ God Bless, David Kuketz
No one wants a transparent money manager, in the sense of not adding value. ETFs and Indexes are available to match performance with market averages. No, we want returns above and beyond those. Funds should have incremental (relative) returns that exceed fund incremental costs, significantly. Otherwise, why would we pay so much for funds? We could compile a list of all funds and their true diversification scores. We could also measure the true Return on Investment (ROI) of each fund's incremental returns. This is not unlike calculating the ratios for publicly traded companies, to assess the performance of one versus another, in making investment decisions. One might say "my fund's ROI was 20%, because I put in $10K and it grew to $12K". Let's assume the market returned 10%. Your $12K is in comparison to $11K, so your relative return is $1K or 10%. If you cash out you'll be paying a redemption fee. You probably paid a sales commission up front and there were pr...
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