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Sound Financial Group - Bothell, Washington


SFB035 Illusions of Investing Part 1 - What Your Mutual Fund Won't Tell You

| September 27, 2016
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Episode Summary

This episode is part one of a six-part series on the illusions of investing. Paul admits that he believed many of these common illusions during the early years of his financial career and wouldn't be surprised if your current financial advisor still believes them today. This episode dives into the illusion of stock picking and how mutual funds sweeten their success rate by closing their poor-performing funds down. Find out more on today's episode.

What Was Covered

  • 03:20 - Feel free to jump on a call with Paul. He and his team are ready to help you no matter where you are!
  • 04:10 - There's a good chance your advisor doesn't know about these common illusions either.
  • 06:50 - Paul also believed in many of these illusions for a good part of his career.
  • 07:15 - The first illusion you should be aware of is stock picking. Is there somebody out there who can really pick stocks?
  • 07:50 - To understand what's happening today, let's take a history lesson from World War II.
  • 12:40 - The brightest minds on Wall Street know they can't out predict the market.
  • 14:30 - By 2001, we regularly had 1,000 mutual funds close every single year.
  • 16:20 - By the end of 2013, 23,000 mutual funds were closed.
  • 18:00 - So, what's the real impact of this on you and your money?
  • 21:15 - Shouldn't you first look at somebody's track record before investing in them? Wait, not so fast.


"What does it really cost to invest? Are we aware of the costs to investing?"

"Much of the education that occurs for financial advisers comes directly from mutual fund companies."

"The brightest minds on Wall Street know they can't out predict the market."

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