Investing in
Individual Stocks or Mutual Funds?

I was a mutual-fund advocate for years. I thought funds were the best answer to certain investment dilemmas. Right now "my love affair" with the mutual funds is over!

Funds have let me down!

They've become too expensive!

They cost too much!

Shareholders are paying the bill for fund companies to advertise to bring in more shareholders! First they told us that it would benefit us because of economies of scale. Ha! How many fund companies reduce expenses when funds grow larger?

Many people just assume that mutual funds are the best way to save, but like most "conventional wisdom," it's often wrong.

Conventional wisdom will tell you to put your money in a mutual fund.

Well, conventional wisdom does not apply in the stock market! Today, there are more mutual funds out there than there are stocks to buy! A mutual fund can be your worst investment decision!

There is an enormous amount of money being put into mutual funds every year.

These so-called "safe" investments have been consistently under performing the markets over the years.

That's right!

When the market goes up 40%, your mutual fund probably returned 25%.

What happens when the market goes down? And believe me, it does go down! If the market is down 20%, your fund will probably be down 30%.

You lose both ways!

If there are almost more mutual funds than there are stocks, then how do you pick a mutual fund?

Do you need a mutual fund that helps you pick a mutual fund? Sounds silly, doesn't it?

Guess what, they ALREADY EXIST!

There are mutual funds that take your money and pick different mutual funds to invest in. Isn't this getting a bit ridiculous?

With all the free information available today, you're better off picking the stocks yourself. You would save yourself a lot of money.

You can dramatically reduce your investment expenses by cautiously selecting your individual stocks, and minimizing the number of your trades.

The average mutual fund has fees and expenses of over 1.00% per year for the privilege of underperforming the market. Between 85% and 95% of mutual fund managers underperform the indices, depending on who's doing the counting.

One of the big advantages of mutual funds is diversification. Your mutual fund manager pools your money with thousands of other people and builds a portfolio containing hundreds of securities representing companies in dozens of industries.

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