[-dustin]

today, i learned that my mom's got some $$ in a mutual fund. i poked around, and found out the info. it sucks, in my opinion. 5 year return = -1.75%. call me crazy, but i would expect a mutual fund to do better than that. over the time that my mom has had it, she would have been a lot better off having put it into a savings (i think...higher return, but i don't know how taxes would work).

my mom's not happy with it, either. she wants to take her money elsewhere. i've never done anything like this, she's never done anything like this (she actually doesn't know what a mutual fund is), so i'm going to do the research. any tips?

here's a link: http://finance.yahoo.com/q/bc?s=AALGX&t=my&l=off&z=m&q=l&c=

are we right in thinking the money would be better off in something else, or should she just leave it in and stick it out?

 

[rooftest]

If she bought it in 2002, she's done well.

Don't use Yahoo finance - something on there is always wrong - use www.morningstar.com to compare mutual funds.

 

[neanderthal]

First of all, you be careful of any financial advice you get online.
(That includes mine.) The best advice is for you to become educated on personal finances. It's something that you will benefit from. Any book by John Bogle is worth reading. I'm begining to sound like my father more and more every day. Crap.

Is this fund in an IRA? If not, the the fund appears to have a high
turnover rate which boils down to your mother has to pay a lot
every year in taxes for capitol gains and divdends. If the fund is in an IRA, turnover doesn't matter. Total expenses for the fund is 1%. This means that if the the fund charges you 1% of the money you have invested just to manage the fund. That's kind of high.
Vanguard mutual funds usually run about .25%. The fund also
charged your mother 5% of her investment just to get into the
fund. That's also crap. Many large mutual fund company like
Vanguard or Fidelity charge nothing.

The fund looks OK but you could do better.

 

[douglas]

diversifiy

sell that 1 & buy 3 different mutuals, a worldwide, a balanced and maybe a growth&income

check out janus.com

 

[SkaredShtles]

What are her objectives in investing this money?

 

[BurlyShirley]

5 years is not long enough to judge anything. What's the long term track record of the fund?

 

[SkaredShtles]

5 years is not long enough to judge anything. What's the long term track record of the fund?

It's reasonable...............

 

[The Toninator]

5 years is not long enough to judge anything. What's the long term track record of the fund?

but if it has a bad record for 5 years wheres the logic in staying with a lame duck?
If your only going to be in to for 20 or 30 years that's 16% and 20% of future devaluement. wft other signifier that your not going to get a quality return do you need?

 

[SkaredShtles]

but if it has a bad record for 5 years wheres the logic in staying with a lame duck?
If your only going to be in to for 20 or 30 years that's 16% and 20% of future devaluement. wft other signifier that your not going to get a quality return do you need?

Do you remember what happened in 2000/2001?

If you look at a *lot* of fund 5-year histories right now you'll see alot of pretty crappy performance. If you looked at the 5-year period from 1995-2000 you'd see some significantly different numbers.

 

[The Toninator]

Do you remember what happened in 2000/2001?

If you look at a *lot* of fund 5-year histories right now you'll see alot of pretty crappy performance. If you looked at the 5-year period from 1995-2000 you'd see some significantly different numbers.

True but to me he's doing the right thing by re-evaluating his/his mom’s investment strategy. What time frame is a good qualifier for reevaluation? 1 year, 5 years, 10 years?
That bull****e where portfolio managers propagandize “Hey put your money with us and forget about it forever is BS.” If every investment made money we’d all be millionaires.
I think inbreed is taking the right steps, but as suggested he really needs to talk to some professional’s.
If it we’re up to me I’d have him take it all out, give it to me and let me go ALL IN on pocket duces

 

[SkaredShtles]

True but to me he's doing the right thing by re-evaluating his/his mom’s investment strategy. What time frame is a good qualifier for reevaluation? 1 year, 5 years, 10 years?

You should evaluate your investment strategies once a year. However, if your fund is tanking like 96% of all funds *and* the indices, it might indicate something more widespread.

He's definitely taking the right steps, I'm just pointing out that taking a historical period like 2000-2005 out of context may mislead you in decision-making.

The likeliest thing to happen is his mom will pull out of that fund and then it will go on an 18% per year tear for the next 5 years.

 

[-dustin]

Is this fund in an IRA?

it is an IRA that she got into in '98.

oh, ****tles and ton, i'm gonna head over to my old finance professor's office when school starts. right now, i'm just doing my own reading and such.

 

[The Toninator]

You should evaluate your investment strategies once a year. However, if your fund is tanking like 96% of all funds *and* the indices, it might indicate something more widespread.

He's definitely taking the right steps, I'm just pointing out that taking a historical period like 2000-2005 out of context may mislead you in decision-making.

The likeliest thing to happen is his mom will pull out of that fund and then it will go on an 18% per year tear for the next 5 years.

like texas that would suck ass

 

[SkaredShtles]

it is an IRA that she got into in '98.

So what has *her* return been over the life of her investment? '98-2001 was probably pretty good?

oh, ****tles and ton, i'm gonna head over to my old finance professor's office when school starts. right now, i'm just doing my own reading and such.

Excellent idea. Assuming he's not some sort of academic freak that has no footing in the real world.

 

[The Toninator]

it is an IRA that she got into in '98.

oh, ****tles and ton, i'm gonna head over to my old finance professor's office when school starts. right now, i'm just doing my own reading and such.

great your on the right path! You should be prepared to answer some questions. Questions a should be: What is my goal for this money? (answers – Growth, retirement etc)
That will help you decide how to proceed investment option wise.
Does your mom have a company 401? If it’s performing well and option would be to roll your IRA (although the tax argument does come into play depending of tax deferment) into that.
I consolidated 2 401’s and together they are performing way better than they did separate.

TechniKyl is wired in pretty well he might be a good source of advice also.

 

[neanderthal]

Hey IB,

There's a good primer on mutual fund investing at

http://flagship2.vanguard.com/VGApp/hnw/content/PlanEdu/InvestorEdu/PEdInvestOVContent.jsp

It sort of is biased to the Vanguard philosophy of investing but it's
pretty good. Any of the big mutual fund houses have a primer
online. Check them out.

Make sure your are knowledgable about what you are about to do
before you make any moves. You're probably the best person to
undserstand what your mothers requirements are. With a little
bit of basic knowledge on mutual funds, you can make the right decission.

 

[SkaredShtles]

When did it become buy high sell low?

That's *always* how it's been for the uneducated investor.