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Mutual Fund redemption problems? May 6, 2009

Posted by shaferfinancial in Finance, Uncategorized.

A few esoteric mutual funds have stopped redemptions of funds to their investors is being reported by the Wall Street Journal.  Always knew that mutual funds inside 401Ks were not particularly liquid, but always felt like those outside of tax deferral wrappers were liquid!  Of course the massive redemptions has harmed the remaining investors by forcing selling of equities to cover.  Often the best returning stocks are sold to avoid having to report those massive losses in the poorly performing stocks.  The massive outflows from the funds are causing lower profits at those companies engendering layoffs.  Just another sign of the times.

Bottom line is that mutual funds are managed for the profitability of the companies not to maximize return for its customers!

Isn’t it time you considered an alternative to mutual funds?

Call or e-mail me for that discussion.



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