Wright Financial Group, LLC

Why Investing in Mutual Funds Could Jeopardize Your Plans for Retirement

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Why Investing In Mutual Funds Could Jeopardize Your Plans For Retirement

Unfortunately, since many advisors who serve clients in the Baby Boomer demographic entered the business during the 1980s and 90s, in what was the best stock market in US history, they became stock market specialists favoring growth instead of income. Many of them also became focused on mutual funds. Mutual funds, in general, are a murky pool
of investments that really only publish their holdings once a quarter.

That means that in the middle of the quarter, you really don’t know what stocks your money is invested in. Sometimes, fund managers will do something known as “window dressing”. Let’s say that during the quarter, a particular stock the fund owns drops in value significantly and receives bad press. The fund manager may not want to sell it because its price is down.