Mutual Fund Investors Need Another Investing Strategy

This Business Week article sums up why.

Of the 11,585 stock mutual funds that Morningstar tracked this year, all but one lost money - and the sole exception just broke even. I've listened to a great stock trader and radio host named Phil Grande the past couple of months, and he makes more sense than almost anything you hear from the mainstream financial media.

Phil says that almost all mutual funds are going nowhere for the next few years, because fund managers can only invest long in these funds. And the general stock market will struggle in the short-to-medium term future because the earnings aren't there to justify higher stock prices.

The current stock market is a trader's market - not a "buy and hold" market, like most stock brokers and financial planners advise you to invest. Most of the time, their compensation is based upon how much money you have invested in the stock market with a financial professional - NOT on how well your portfolio performs.

And a lot of folks in the industry are still looking for the "best-performing mutual fund" to recommend. That's like recommending the "fastest horse-and-buggy" in 2008. Employees with 401(k) and IRA accounts need to get educated on commodities and exchange-traded funds (ETFs) that will perform better in this current commodities bull market cycle.

Or - take the time to learn how to trade stocks wisely. And that's what Phil Grande shows you how to do. I know it's difficult to learn a new skill, with the time and effort you have to invest. However, if you learn to trade stocks and options profitably today, it'll more than pay off in the next few years - compared to other investors possibly losing their shirts because they didn't know the financial technicals and fundamentals.

I know this sounds like an advertisement for Phil, and maybe it is. However, his advice is some of the best out there. If you're looking for some "done for you" investment advice, check out what Bill McKinley and Doug Newberry have to offer at The Market Toolbox.

Doug also has a weekly webcast every Sunday evening, and their newest edition of the Research Lab can help you make more profitable stock picks in less time. That's something every investor can use.

Had a great time this past week, attending four Christmas parties. Today it was snowy and cold, and a good day to stay inside, relax and watch football.

Please check out Phil Grande and Doug Newberry's sites, they can definitely help you become a better (and more profitable) investor.

The Big Three Bailout Debacle

I'm no fan of General Motors, Ford or Chrysler, even though my uncle was a GM truck and Pontiac car dealer a few decades ago. I always thought that I'd never buy a foreign car or truck in my lifetime. That was until I realized Detroit wasn't serious about competing in the auto marketplace... at least until they realized they were almost bankrupt, and needed help from Washington to keep their companies going.

Management has had the vision of Stevie Wonder to keep up with foreign car companies, and rising gas prices. They remind me of someone you'd meet at a party who hears a joke, then laughs five minutes after the punch line. The UAW is equally as culpable - they've made unreasonable salary and benefit demands (which management usually capitulated to), and haven't been willing to budge on existing contracts - at least until the threat of bankruptcy and/or going out of business became a distinct possibility.

What's odd about this situation is the debates and delay from Congress, being concerned about $25-34 billion in loans or other assistance, which is a pittance compared to the $850 billion Wall Street bailout that sailed through Congress quickly back in September.

I'm glad to see Congressmen and Senators asking tough questions, and doing their due diligence. Democrats seem to be pushing hard for the bailout, Republicans appear to support the bankruptcy option. I agree with letting these firms fail, and going through bankruptcy proceedings.

If Chrysler had to go through bankruptcy back in Iacocca's day (and feel the consequences of their actions through the pain of restructuring), the Big Three might have paid more attention to their business, and not be in the shape they're in today.

Eventually, these big, dumb, slow companies will have to go out of business, be sold off in pieces, or restructured another way. Their current business model just isn't viable. These companies (or future spin-offs) will need to have non-union labor with reasonable salary and benefits packages, different and more forward-thinking management who can adjust and adapt to current and future trends in the auto business, and most of all: Building good-quality, reasonably-priced cars and trucks that Americans actually want to buy.

Out of our country's economic and financial problems, I hope this will be the catalyst of a new era of more competitive American business.