Mutual Funds

In my years of analyzing portfolios and speaking with investors, I have found that a single number often creates more confusion than clarity: a mutual fund’s annual return. A client will show me a statement boasting a 12% gain and beam with pride. My first question is always the same: “Compared to what?” Without a […]

I have spent countless hours across my career staring at performance reports. A client or a board member will lean forward, point to a number—say, an 8% return for the year—and ask the only question that ever truly matters: “Is that good?” On its own, that number is meaningless. It is a ship in a

In my practice, I find that evaluating domestic mutual funds is a straightforward endeavor compared to the labyrinthine complexity of assessing their foreign counterparts. The challenge isn’t just about picking stocks in London or Tokyo instead of New York; it’s about defining the very market you’re trying to beat. A foreign mutual fund’s benchmark index

In my career, I have seen billions of dollars flow in and out of mutual funds based on a single, often misunderstood, data point: performance against a benchmark index. Investors cheer when a fund “beats the market” and despair when it lags, but few pause to ask the most critical question: “What, exactly, is ‘the

In my years of analyzing equity funds, I’ve found that no discussion is more deceptively simple than the one surrounding large-cap benchmarks. Most investors, and even many advisors, accept the S&P 500 as the default bogey without a second thought. While this is often correct, this complacency can be a critical mistake. The choice of

I have analyzed thousands of mutual funds over my career, and I can state with confidence that the single most critical, and most often misunderstood, component of performance evaluation is the benchmark. Investors and advisors often glance at a fund’s fact sheet, see it has “beaten its benchmark,” and take that as a signal of

I have spent decades analyzing investment vehicles, from the simplest index funds to the most complex hedge strategies. In that time, one question from investors has remained a constant: “How do I pick a mutual fund that will beat the market?” The allure is undeniable. The idea of a skilled manager, diligently working to secure

In my career, I’ve learned that successful investing isn’t just about maximizing returns; it’s about managing risk in a way that lets you sleep at night. The term “below average risk” is often sought after by investors, particularly those nearing retirement or with a low tolerance for volatility. However, this label is not a guarantee—it’s

I understand the intuitive appeal. It feels logical. If a fund’s share price is $8 and another is $80, the $8 fund seems more “affordable.” You could buy more shares, and if it goes up, you’d make more money, right? This is the same psychology that draws people to penny stocks. It feels like a

I have spent my career analyzing financial statements, but the most revealing stories are never found in the numbers alone. The numbers are the aftermath; the cause is always human behavior. The sudden failure of a multi-billion dollar mutual fund is a rare and catastrophic event. It’s not a mere dip in performance; it is