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How many times has this been discussed here in the past? And curious whether those discussions have altered anyone’s behavior in regard to buying and selling funds?
My guesses are that seasoned/frequent visitors have not adjusted their fund count much if at all and that new visitors might be interested in the topic. I haven't a clue as to when the topic was last posted/discussed.
If I have time I’ll spend couple bucks and purchase the WSJ this is out of so can read it. My prejudice is showing through on this one, but for the life of me I’ve never been able to understand why the number of funds matters much to the average investor - as Dave Ramsey suggests. More ain’t better. If it were, than having 5 of Hussman’s would be better than owning one from T. Rowe.
But it’s the final return that matters over time. So if you own 5 or 10 exceptional funds that march to different drummers over the short term but get the job done over 10, 15, 25 years, than why is that inferior to owning fewer? And this question seems to beg the larger question of what is the investor’s situation in life and what is he attempting to accomplish through his investments?
Some folks have legit reasons to own a larger number of funds. Might have to do with estate planning, tax situation, what’s offered (now or previously) by their employer. Personally, I can’t come to grips with handing everything over to a single fund house. Would rather have a few different outfits managing my money. Now, the likelihood one of these guys will turn into idiots overnight or do something unscrupulous with my money is slight. But we don’t carry a life jacket in our boat expecting it to sink, or keep a fire extinguisher in our home expecting to ever use it.
For those so moved, Google the subject. I’ll guarantee you’ll find 2 or 3 dozen articles on the question in rapid succession - a good many from intelligent sources. So, the question gets a lot of play for whatever reason.
It's just possible that some of us have too many funds because we just enjoy accumulating them, almost collecting them. I'm guilty of buying too many, but I do so in other parts of my life. I've owned so many golf clubs that I had to sell a whole bunch at a garage sale, yet that didn't solve the problem. Golfers buy (or in my case assemble from parts) new clubs in search of improved performance, even though it's a fruitless pursuit. Golfers buy new putters in the way we men try out new razors, to no avail. My golfing buddy used to say, "It's not the putter, it's the puttee." I dare say I have bought funds in the mistaken belief that my returns would improve. Some men buy more cars than they can ever fully enjoy, once again in search of some elusive performance target. I have an old sports car that is perfect for me and is a great joy, nonetheless I spend time on Bring a Trailer following all manner of exotic cars that I covet. My wife buys/collects Asian antiquities; they are all nice, but we have too many. I started to catalogue them and gave up in despair. I think there's a hoarder lurking below the surface in each of us; successful people must know how to keep the beast at bay better than I.
Comments
FWIW - Dave Ramsey weighs in ...
https://www.bing.com/videos/search?q=video+how+many+mutual+funds+is+too+many?&&view=detail&mid=736C33EDCC55E0613158736C33EDCC55E0613158&&FORM=VDRVRV
If I have time I’ll spend couple bucks and purchase the WSJ this is out of so can read it. My prejudice is showing through on this one, but for the life of me I’ve never been able to understand why the number of funds matters much to the average investor - as Dave Ramsey suggests. More ain’t better. If it were, than having 5 of Hussman’s would be better than owning one from T. Rowe.
But it’s the final return that matters over time. So if you own 5 or 10 exceptional funds that march to different drummers over the short term but get the job done over 10, 15, 25 years, than why is that inferior to owning fewer? And this question seems to beg the larger question of what is the investor’s situation in life and what is he attempting to accomplish through his investments?
Some folks have legit reasons to own a larger number of funds. Might have to do with estate planning, tax situation, what’s offered (now or previously) by their employer. Personally, I can’t come to grips with handing everything over to a single fund house. Would rather have a few different outfits managing my money. Now, the likelihood one of these guys will turn into idiots overnight or do something unscrupulous with my money is slight. But we don’t carry a life jacket in our boat expecting it to sink, or keep a fire extinguisher in our home expecting to ever use it.
For those so moved, Google the subject. I’ll guarantee you’ll find 2 or 3 dozen articles on the question in rapid succession - a good many from intelligent sources. So, the question gets a lot of play for whatever reason.
Now that's a change for the better!