Move your personal investments and retirement funds to socially responsible investment (SRI) funds that support only those corporations that uphold higher standards of behavior. Returns on SRI funds are usually equal to, if not better than, many of the well-known traditional mutual funds.
Our capitalistic scheme in the latter years of the 20th century seems to have lost its way. We've had a "pathalogical change" from traditional owners capitalism where most of the rewards have gone to those who make the investments and assume the risks to a new and deeply flawed system of managers capitalism where the managers of our corporations our investment system, and our mutual funds are simply take too large a share of the returns generated by our corporations and mutual funds leaving the last line investors - pension beneficiaries and mutual fund owners at the bottom of the food chain.
I think we have in Germany too many sickness funds. We started with more than 1,000 sickness funds. But the fewer sickness funds there are, the less bureaucracy and the easier the system is to operate. But it is important that the best sickness funds survive.
Wall Street, with its army of brokers, analysts, and advisers funneling trillions of dollars into mutual funds, hedge funds, and private equity funds, is an elaborate fraud.
There were two qualities about the mutual funds of the 1920s that made them extremely speculative. One was that they were heavily leveraged. Two, mutual funds were allowed to invest in other mutual funds.
I think those who invest in mutual funds want someone else to do the thinking for them. But the fact that they can move the money around the family of mutual funds just through a phone call lets them feel that they can play tycoons.
In a word, unions are not entitled to use retirement funds to raise costs at the companies where the funds are invested. And unionized corporations are not required to permit this. Rather, management trustees and the Labor Department are obligated to prevent it.
Even fans of actively managed funds often concede that most other investors would be better off in index funds. But buoyed by abundant self-confidence, these folks aren't about to give up on actively managed funds themselves. A tad delusional? I think so. Picking the best-performing funds is 'like trying to predict the dice before you roll them down the craps table,' says an investment adviser in Boca Raton, FL. 'I can't do it. The public can't do it.'
In general, the hedge funds were clobbered by the 1969 bear market, ending up in many cases with records that were worse than those put together by aggressive mutual funds denied the luxury of short sales.
Millions of mutual-fund investors sleep well at night, serene in the belief that superior outcomes result from pooling funds with like-minded investors and engaging high-quality investment managers to provide professional insight. The conventional wisdom ends up hopelessly unwise, as evidence shows an overwhelming rate of failure by mutual funds to deliver on promises.
With actively managed funds, people have big behavior problems. With funds that have done well, they put their money in, and when it has done bad, they want to take it out.
Plenty of funds have fine long-term returns despite being tax-inefficient and generally costly. But a dirty secret is this: Average, no-load fund investors do much worse than the funds - or the market.
When you diversify your mutual funds, you are diversifying something that is already diversified. Diversifying mutual funds is like taking high octane gasoline & adding water & then adding orange juice to it.
If you don't like the idea that most of the money spent on lottery tickets supports government programs, you should know that most of the earnings from mutual funds support investment advisors' and mutual fund managers' retirement.
If we observe the performance of only those funds that remain active, we will tend to find that the average performance of the surviving funds exceeds that of the market.
I'm sometimes accused of being hostile to mutual funds. That's not fair, really. There is a place for them. Still, I am hostile to one thing, which is trying to use funds to time your way in and out of the market. That's a recipe for very bad results.
Hedge funds try to produce above-average investment returns using tactics ranging from traditional stock-picking to complex derivative and arbitrage plays. High minimum investments, redemption restrictions and aggressive strategies make them suitable mainly for more sophisticated and well-heeled investors.