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Brain-dead Mutual Fund Selection
About this time every year, the personal finance magazines will
perform an annual ritual: Looking at how mutual funds have
performed over the past year--and then using that information to
suggest which mutual funds you should pick for the coming...
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5 Things To Know About The Stock Market
50% Of U.S. Households Invest In The Stock Market Individuals invest in the stock market directly, through mutual funds, their pension plans, profit sharing plans, 401k's, IRA's, etc. Mutual Funds Dominate The Market It is mainly the...
Forex Trading: Investment Secret Of The Rich And Powerful
If you search on the internet you'll find millions of investment programs such as real estate, stock trading, bond trading, mutual funds, CDs, auction programs and various internet programs.
I have not done many internet income...
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The Best Of Stock Market Simulation Games
A stock market simulation game is a great way to practice your investment skills before actually investing any "real" money in the stock market. Simulation games are usually played on the internet, where people can experience the thrill of...
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The Conflict of Interest Game
Disgruntled investors are going after Wall Street once again,
this time accusing one of investment bank Morgan-Stanley's
high-tech mutual funds of making biased stock picks.
Recent lawsuits allege the Morgan Stanley Technology fund was
influenced to buy and hold stocks of companies that delivered
huge investment banking fees - or could potentially bring big
business - to the investment bank.
According to the lawsuits, the Morgan Stanley fund followed
the biased recommendations of the firm's analysts - decisions
that have cost shareholders millions of dollars since the
portfolio's October 2000 inception.
The fund lost 48 percent in 2001 and was down another 50
percent during the first nine months of 2002. While Morgan
Stanley strongly denied the allegations, I fail to see how the
management of the fund is somehow distinct from the other
divisions of Morgan Stanley. Ultimately, they all work for the
same boss.
The suits further claim that the tech fund failed to disclose
that the firm had investment banking ties with a number of
companies whose stocks were part of the portfolio. They also
failed to reveal that those links could affect the fund's buy
or sell calls.
Why bring all this up? For one thing, it
is interesting to
note that Morgan Stanley offered four of these types of funds
in October 2000. Just around the time when we sold all of our
positions (Oct. 13, 2000) and it became clear, at least to
those of us who were tracking long-term trends, that a major
trend change had taken place.
More recently in the news it's been Merrill Lynch who had a
questionable deal involving transactions with failed energy
trader Enron. Of course, the financial services industry
regulates itself so well, that an $80 million payment to the
SEC is sufficient to wrap up this case without admitting or
denying wrongdoing.
What's the moral of this story? While it is impossible to
predict these alleged conflict of interest schemes, it is
definitely possible to follow a disciplined approach and be on
the “right” side of the market so you can avoid jumping aboard
a sinking ship.
About the Author
Ulli Niemann is an investment advisor and has been writing
about objective, methodical approaches to investing for over
10 years. He eluded the bear market of 2000 and has helped
hundreds of people make better investment decisions. To find
out more about his approach and his FREE Newsletter, please
visit: www.successful-investment.com
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