Investment Jungle

16 Reasons and Counting!

1. It is your money and nobody cares about it as much as you do.

From Stephen Jarislowsky’s “The Investment Zoo: Taming the Bulls and the Bears” - Published 2005

2. “Unfortunately, ripping off clients is very common in our industry today. I’m not talking just about investment counseling but to a large extent about underwriting firms and mutual fund companies. It’s pretty evident what they’re all about: charge the highest fees possible and make as much money for themselves, not the client.” page 27.

3. “Stockbrokers and investment advisors, for their part, too often have their own interests, not those of their clients, uppermost in their minds.” page 75

4. “…most brokers are judged by the commissions they bring in rather than by how well their clients do.” page 76

5. “And the reality is that financial advisor fees and mutual fund management and sales fees - just like brokers’ commissions - come straight out of the investors’ wallets.” page 77

6. “Clearly for investors, all things being equal, the fewer fees you pay the more your total wealth is maintained.” page 77

7. “Simply put, most mutual funds are very expensive, with up to half your expected long-term gain siphoned off in fees at no risk to anyone but you.” page 81

8. “My basic conclusion is that it is supremely important to minimize the expense of investing, since each annual 0.25% makes a big difference over a 20-year period.” page 84

9. “The broker looks for maximum commissions; the financial planner looks to maximize his fees, either directly or through commissions from products recommended; banks are usually unimaginative; the mutual fund takes far too large a ‘load’ at entry and exit and charges an excessive operating fee, etc… A lawyer and an accountant may also get into the act. The result is a lack of clear policy, lack of clear objective, excessive attention to tax rather than investment, and so on. Time and money that should be compounding the investment are wasted.” page 149

From Phil Town’s “Rule #1″ - Published 2006

10. “If you own mutual funds that are attempting to beat the market, and you’re hoping your fund manager can give you a nice retirement, you’re highly likely to be the victim of a huge scam. You’re not alone - 100 million investors are right there with you. Fortune magazine reports that since 1985 only 4 percent of all the fund managers beat the S&P 500 index, and the few who did it did so by only a small margin. In other words, almost no fund managers have done what they’re paid by you to do - beat the market. That significant fact went unnoticed through the roaring 1980s and 1990s as the stock market surged with double-digit growth, bringing your fund manager along for the joyride. But now the ride is over, and investors are starting to notice that their fund managers are pretty much useless.” page 13

11. “In fact, in 1996 a monkey was hired to compete with the best fund managers in New York. He beat them two years in a row.” page 13

From Joel Greenblatt’s “The Little Book that Beats the Market” -Published 2006

12. “If your stockbroker is like the vast majority, he or she has no idea how to help you! Most get paid a fee to sell you a stock or a bond or some other investment product. They don’t get paid to make you money.” page 113

13. “Mutual fund management companies need to charge a fee for their services. Basic math says that average returns minus fees equals below-average returns. Not surprisingly, after subtracting fees and other expenses, the vast majority of mutual funds do not beat the market averages over time.” page 114

14. “…there is no relationship between a fund’s good past investment record and its future returns. Even companies whose business is to rate mutual funds have a poor record of determining which funds will perform well in the future.” page 114

15. “A good past investment record isn’t much help when predicting future returns, and picking a good manager is likely no easier than picking attractive individual stocks.” page 115

16. “…I was sure a brokerage firm could and would help me a lot.  After all, wasn’t that what they were in business for?  Finally I got it; they were in business to make money (generate commissions) and despite what they say or do, brokers that generate huge commissions get huge rewards.  The incentive is all about commissions, not customers.” from Trade Stocks and Commodities with the Insiders by Larry Williams, 2005. 

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