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Whose making money from mutual funds? July 28, 2008

Posted by shaferfinancial in Uncategorized.
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Individual mutual funds are down significantly.  As in all down markets fear rules and folks also pull money out of the market.  Should be bad times for mutual funds companies.  But, not surprising, mutual fund companies are having banner years.  Fidelity made $478M in the 1st quarter. Janus and Black Rock also reported increased profits.  Let me put this in black and white.  It matters not how well individuals’ do with their mutual funds or stock portfolios to these folks.  They make their money whether individuals do well or poorly.  That is the system, that is the way it has been for a long time.  This is laid out in “Where are the Customers Yachts,” written in the 1940’s.  Its a pretty funny classic, unless you lost your sense of humor along with your money on Wall Street.  Warren Buffet famously quipped,  “Wall Street is the only place that people ride to work in a Rolls Royce to get advice from those who take the subway!”  Same sentiment.  And one of my favorites, “”First, many in Wall Street – a community in which quality control is not prized – will sell investors anything they will buy.”

So stay away from the Wall Street Channels and magazines.  Don’t listen to Suze Orman, Dave Ramsey (unless you are in big time debt and just want to learn how to get out of debt), or any of those other “financial experts” who are getting rich giving out advice rather than getting rich investing.  Quit paying these sharks for bad advice.  Know that you can do a better job yourself and even if you do the same job, you won’t be paying the sharks, which means you are doing better. Understand that financial planners, no matter what their designations after their names, represent Wall Street or Insurance Companies interests, not your interests.  Understand that mutual funds are sucker bets sold by sharks!

 

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