What’s the Story on Mutual Funds?

September 25th, 2014 by John Murphy

Mutual funds have been around for years and were created to allow small investors to have their money professionally managed in order to diversify and protect their savings. The funds allowed investors, who were just getting started, to put money away without taking on high risk.             

Most company retirement plans utilize mutual funds as their primary investing tool. They are, once again, used as an easy alternative for investing money and having it managed in a diversified manner.  Participants can choose from a menu of many funds. Over the years allocation funds, and then target date funds, were created to make investing even easier for people with little or no investing experience. So, mutual funds became a great way for the new investor to get started.

Are there drawbacks?  

Fees.  New investors often say the fees they have to pay a fund manager are a drawback. But no matter what investment strategy you take, there are going to be costs involved with professional money management.

Loss of control. Dealing with a salesperson or middleman is a drawback. Many new investors deal with salespeople that put them in unfamiliar mutual funds, and they seldom know what they own on a daily basis. The salesperson may help you with financial planning needs, but when you want real answers to how your money is invested, you may be disappointed. Why? Because the salesperson only has a prospectus and lacks direct, on-demand access to the money manager. He simply doesn’t have the answers at hand.

We do things differently…

The main difference between a mutual fund and how we manage money at B&C Financial is, our clients have direct access to the people managing their money.  One of the barriers to properly diversifying someone in individual stocks is one needs to have at least $100,000 to invest. At that level you can have your own mutual fund built, based on your own goals.

At B&C Financial investors receive excellent personalized service. You will always speak to a human being, and receive direct access to the people making the investment decisions on your account. In fact, you’ll have access to our entire team for financial planning. Good service, good performance and a competitive fee are our value propositions, and that has not changed for nearly twenty years.