This is the age old debate among active and passive investors. For those that don’t know what “funds vs. stocks” means, it is asking, “is it better to own individual stocks or just buy a fund and let the manager decided what to buy”.
The answer, well, it depends on how active you are in investing. As you can probably realize, the fund manager does not work for free, in fact, they earn a very good living based on how much money they manage. So who pays the managers? The long and short of it, is that you do. Those are those fees and fee schedules you see on the mutal fund prospectus.
If you are willing to put your own time and research in, you can do exactly what the fund manager does, and that is pick stocks. The best part is, every 90 days, the fund has to publish it’s top 10 holding so you can see what the fund manager likes, and doesn’t like. Most funds don’t trade stocks like individuals, so whatever their top 10 holding are 90 days ago, 8 or 9 will be the same this time around.
Another area affecting your decision in “funds vs. stocks” is your personality. Some people just don’t like to manage their investments and would rather pay a professional to do it. So, it is up to you. How much time can you spend managing your investments? Do you have the stomach for the market’s twists and turns?
The fees on funds tend to run higher than ETF’s and ETF’s can get you almost the same returns and diversification that mutal funds can get you.
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December 6th, 2010 at 4:47 pm
As you know, you have many opportunities to speak to a prospective client whether you are giving a lecture/seminar, or you meet someone out at a party, a restaurant, etc., the circumstances really do not matter, there are things you should say and NOT say in order to express your value.
Try to eliminate YOURSELF from the conversation and make it all about them. Avoid saying “I” if at all possible. Avoid talking about the specifics of the services you perform or provide. Instead, focus on the value that the prospective financial advisor lead will obtain/enjoy/receive as a result of using your products or services. This is a really important point. Many of us tend to focus on, “I do this”, and “I do that”. What your prospective client, really wants and needs to hear from you is, “By coming to my office/business, here is the value you will receive as a result of using me, my products, or my services.”
In other words, it’s all about the value of what you offer and not necessarily the specifics of your products and services.
Dr. Len Schwartz
President/CEO - Pro2Pro Network
http://www.Pro2ProNetwork.com