The Three M's of Mutual Funds

Geoff Cook - CFP, CHAIP

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Mutual funds get alot of flack, and dont get me wrong they should there is a lot of terrible funds out there...

But dont kid yourself, there is also great money managers out there who can do a far better job than you, me, or most stock brokers out there. (dont believe me, come see me and I will prove it to you)

Which brings me to my Three M's of Mutual Funds, to help you figure out which ones make sense for you...

Manager - This in my opinion is most important. The manager is the captain of the ship, the idea guy/gal, the brains of the operation, the professional and who at the end of the day is managing your money. If you are going to get a specialized surgery, are you going to go online and get the easiest, quickest, cheapest surgeon on the market, or are you going to do your research and get the surgeon who has the best track record of long term performance, consistency, and sticks to what he knows?

Mandate - Mutual Funds have to follow certain protocol to be able to pass regulation. Every fund has a mandate of terms that it needs to follow. Some are very loose (manager can invest in anything but not have more than 10% in any one security). Some are tight (fund cant invest more than 10% in any one sector or outside Canada. I personally usually like the first one, but its important to find what matters most for you.

Motto - What is the overal investment firms values, and motto? Do we agree with it and are they going to stick around and continue to thrive? Every firm has beliefs, it is important that those align with yours, and of course they make sense in todays environment.

For a full blown guide on Mutual Funds click here

When dealing in financial matters, you are urged to consult an advisor for legal, tax or investment advice. Every effort has been made to present information in a clear, exacting manner. However neither the publisher nor the authors can be held responsible for any losses incurred due to the actions of any individual as the result of this post or any errors or omissions contained herein.

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