So let's dissect the "mutual fund" issue first.
IRA's and 401's et al --- are all about getting people to save SOMETHING! ANYTHING! They are pretax auto deposits for people getting paychecks. I'm all for that - because without them - people wouldn't save at all.
Add to this - the "company match" which is basically free money.... and that can't be all bad. In the strictest sense that something is far better than nothing.
Mutual Funds are the pablum of investing because people don't have to get involved - they don't have to think - they just pick off a list - throw money at them and hope like hell that when they need the money - it will be there.
Here's the problem with all of that.... the lack of actively THINKING about and being involved with something that is so fundamentally important (or sure as hell should be!). Our retirement... where we hope to live 20 or 30 or more years.
I think they're (Mutual Funds) fine until you gather up about 10 grand. At that point - you can pick 10 stocks and invest 1 grand a piece and probably do far better overall on a compounded return.
What I've tried to do in this thread since day one is to get people involved - take some of the fear of making CHOICES out of the game - and get people to look at their investing differently. It's not scary or hard - in fact - pick the right stuff and it couldn't get more simple. Just the mere act of getting people to look at the mutual fund in their IRA -- you know, the one they haven't looked at for 10 years... is monumental.
I wouldn't just NOT LOOK AT any kind or style of investing --- as my personal belief is that as long as you're thinking - comparing - looking - and then acting on your investments is the biggest "move" that people can make. So if you think -- and I pretty much agree with this -- that investing in a mutual fund in an effort to diversify your holdings -- and do so in an area where you have no knowledge (say healthcare - or drugs etc), then I'm all for that kind of investing. My anti Mutual Fund is more about people pick three in their IRA and letting them sit for 20 years and then wake up and find out they didn't do very well. Most don't! But if you're active in the picking and have a valid reason and thought process for why you're buying THIS particular fund. Then great! It's just another act of investing and that's the secret to all of this.
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