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MarketWatch Senior Columnist Chuck Jaffe on what to consider when deciding whether to keep your mutual fund manager.
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Right now some time a year you may be -- -- about dumping your mutual fund manager.
Because people then the measure performance after they look at -- at year -- statements that's what I'm doing right now.
But is it a mistake Chuck Jaffe is a senior columnist for MarketWatch.
-- -- -- years for a long time what in what -- invites you get people out there who are looking at that year and sat at that statement and sank.
Swap I started the year -- the year where I began it should be more than.
Well if you started the year where it hit yet end of the year where you began.
You may be -- feeling all that bad would think that that MSCI world index was down last year and a but the problem becomes.
That you need to.
Be benchmarking everything against your your own self rather than the market and that's where people go wrong they take a look at say -- things went down.
And they're not looking at.
What did the fund do what what was it supposed to do aren't a lot of headway -- say he had benchmark -- against yourself what does that mean.
-- what it really means is when you put together a portfolio every fund has to have a job.
And there's not a real purpose in saying okay let's go put together a collection of funds and I think -- be hot right now because what's gonna happen is the minute that you're wrong.
Your entire portfolio goes in the tank.
One of the biggest mistakes that people make is they look at the end of the year and they say OK well this fund was down.
But what -- the fund do what was supposed to -- was supposed to diversify you internationally so that if international funds were down didn't do better than the average international fund.
It may have lost money.
But it still gave you right sort of better exposure than you expected and so you have to say here's why I put it together let's look at that.
-- but so what does that fund is a losing money how long should I be patient I -- -- fire those guys right away that's I don't have a lot of patience for losing money.
Well the problem becomes that if you fire right away what you're gonna look at is what's been hot lately and your pride in a -- of your asset allocation go buy this stuff that's right they -- right now.
And -- by the way the market's gonna turn on that tomorrow so you'll just be repeating this likely be buying high and selling low top what you want to do is you wanna say.
-- make -- a fund a couple of years.
And again if it's losing money -- question is is it actually doing as well -- better than you would have expected in the asset class if it is.
You get more time if it's -- lagging it's not really losing your money but it's doing worse than average and its peer group.
That's when you start to say maybe it's time to get rid of this guy and get a better -- how long do you give them.
I would be -- some big surprise at the -- surprises you all bets are off the barring some big surprise.
I'm typically looking at funds that you want to hold for at least three to five years and so.
They're sort of on the clock the minute that they get there and oh by the way they're always on the clock at that point so that even if a fund was good to you once.
But now it's it's fallen apart you don't want to stick around more than somewhere around three years.
Are well that's -- seems like good advice you know at every expert I talk to says all Jerry Jerry Jerry market's gonna go up 10% this year.
Are you one I think she -- we're gonna have a big gain in stocks.
You know to me it almost does a negative but I do think we're gonna see the market go up I'm not sure I would say 10%.
But the fact is that -- the average person it's still the best place to be invested.
But not because of what it's gonna do in the next twelve months book because of what's gonna do next twelve years or 24 years right number that the market doesn't know when your kids are going to college or when you're retiring so -- that's it gets gets back to that benchmark for yourself point.
The big problem people have is that they blow up their long term strategies I need to go from here to there they blow it up somewhere out here because -- that.
-- had a -- -- let me get right out of the way up I agree.
Look you're asking a different question now we've been covering -- Norman's preapproved card the approved card.
And it's getting a lot of attention from a lot of people out there.
And I frankly we've covered a lot of stories very critical of it I -- -- a big using fan but is there a reason to like this card.
Yes there aren't some reasons to like discarded it is hard for me to say that because -- -- -- -- you radio we had a segment called why it -- your mind.
I don't.
There -- some reasons why he sees -- is okay it is not the worst cart in the world if you're gonna be a light user of it.
So you know if you're gonna be the kind of person who you need to have a prepaid card and -- going to go -- -- and use it occasionally and and you understand what you're doing that's great and if you follow her instructions you can keep the cost of three dollars a month.
You know which is which is pretty good but.
All that said.
Is Suzie Orman is that is the most recognizable personal financial advisor in the country.
She is taking credit for trading this -- and this is the best she could do.
I mean she -- my radio show years ago and she said you know chuck hate is a strong word.
-- can go to our website for the card it says -- hates fees.
Really Susie that why did you create a card that has -- -- album before you actually even include a couple of others that are really charged by the card.
But the job the pay if you wanna -- -- the quarter.
How would you answer that question.
All right you know.
-- -- Tell you that when because I can tell you that well I would never endorse a product like this I think it's a a difficult place for somebody who functions as a journalist and so he's not really a journalist but -- has that that.
You know sort of network -- that goes with -- you know I would suggest that.
You either needed to get something that was that much better and use -- power or you need to come out and say I don't wanna do it remember that there are cards out there.
That have eight fees for their cards that have one -- in fact.
And I think she could have done better and that's the biggest problem -- -- I think.
That people will stop shopping around -- this is the approved card from -- Well I noticed that you wrote the problem with Susie is you don't know when the advice ends in the advertising begins.
It's concern for a lot of people out there chuck thanks for coming on tonight pleasure having on the show I think that's the first time.
I have a great afternoon thank you.
Thank you say there's the Jerry I think.
