Mutual Funds

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Question: Do Active Investment Managers Buy Their Own Funds?


Incentives matter when it comes to financial products. Hat tip to Meb Faber whose podcast I was listening to earlier today and reminded me about this 2008 research report titled “Do Managers Eat Their Own Cooking?” from Russ Kinnel at Morningstar. As the title suggests, Kinnel analyzed whether mutual fund managers actually invest their money in their own funds. Recall that the promise of active management, and the reason that investors pay fees of around 1%, is that they can beat the market (but, alas, almost none do!). Recall also that getting the market return through an S&P500 index fund costs about 0.10-0.15%. Ok, so active managers charge high fees which makes it difficult for them to beat the market. Guess what, someone has figured this out, and it’s not who you might expect…it’s the actual managers running the funds. How do I know? Well, Kinnel found the following:

“At U.S.- stock funds, 47% report no manager ownership. And it gets worse from there. Fully 61% of foreign-stock funds have no ownership, 66% of taxable bond funds have no ownership, 71% of balanced funds put up goose eggs, and

By |January 11th, 2017|Index Funds, Investing, Mutual Funds, Research, Stocks|

Infographic: How is Buying a Car Different From Selecting An Investment?

From Vanguard and seen on Visual Capitalist (hat tip to Big Picture Blog):

By |November 13th, 2016|Behavioral Finance, Investing, Mutual Funds, Purchase Decisions, Stocks|

NGPF Podcast: Tim Talks to Personal Finance Author and Journalist Dan Kadlec


I really enjoyed the conversation that I had recently with Dan Kadlec on the NGPF podcast. With over thirty years as personal finance columnist (you’ve probably seen him in TIME and Money), we had a lot to talk about. When his dreams of being a sportscaster didn’t come to fruition, he focused his efforts on the business beat during the go-go 1980s. Dan describes what motivated him to shift his focus to educating young people about money through his work as a journalist, author and Dad. He shares his favorite columns, the advice he gives to young people about investing and how he brings the topic alive for young people. You will also learn about his new project to serve as an information hub cataloguing the global efforts underway to improve financial literacy. I look forward to meeting Dan in person this weekend as he delivers the keynote address for the Jump$tart National Educator Conference in Dallas. Enjoy!


Chart: Can the Pros Beat the Stock Market?

Think again! Here’s some data showing how the professionals are doing over a 1 and 5 year period vs. a passively invested benchmark:



Activity Idea: Personal Finance Around Me

Here’s an activity idea for your Instagram-obsessed students. Have them take pictures of personal finance that they notice in their everyday lives. Here are a few I came across this weekend while wandering around the Bay Area:

  • In the new world of work, many choose to have a “side hustle (here’s the NGPF podcast with Ash Cash who popularized the term and a recent post on the topic),” an additional source of income. Here’s a sign I saw at a Re-Maker faire in San Francisco:

These 16 Pages Will Teach Your Students All They Need to Know About Investing…

download-15Here’s a free (and simple) guide to investing from Dr. William Bernstein that brings some clarity to investing. The title tells it all, If You Can – How Millenials Can Get Rich Slowly (it’s really only 14 pages of text and well worth the 15 minutes). Will be a great extension activity and/or long-form reading assignment at the end of your investing unit. Here’s the tantalizing question that the booklet opens with:

Would you believe me if I told you there is an investment strategy that a seven-year old could understand, will take you fifteen minutes per year, outperform 90% of finance professionals in the long run and make you a millionaire over time?

Article: Help Me With My 401(k)!


Ok, I have to admit that this headline caught my attention “Help! I have no ideas where my 401(k) is, or what to do with it.” The article goes on to describe an individual who has had several jobs and lost track of her 401(k)s along the way. I like the plain English language the writer uses to describe the elements of a 401(k).

Here are a few highlights:

  • Regrets from the innovator who created the 401(k):

The man responsible is Ted Benna, and he’s currently in his 70s and semi-retired on a horse farm in Pennsylvania. In 1978, he realized that a newly passed tax code — yes, section 401(k) — left a loophole for retirement savings that we’ve been exploiting ever since. Then, in 2011, he startedtelling reporters that he’d accidentally created “a monster”: a giant finance vehicle fueled by hidden fees that Americans are blithely packing their hard-earned money into, unaware that their savings are just spinning wheels in the mud. It’s all become too complicated and confusing, Benna said. People can’t understand their own retirement plans anymore.

  • Taxes and 401(k)s:
By |September 27th, 2016|Article, Career, compound interest, Index Funds, Investing, Mutual Funds, Stocks|

Short Investing Videos As Discussion Starters

  • Millenials investing for retirement the wrong way (USA Today)
    • Why is cash the wrong place to invest for retirement?

  • Want to sell your future earnings potential (an investment in yourself) in return for current cash (sky1)
    • Would you consider this arrangement? Why or why not?
By |August 31st, 2016|Current Events, Investing, Mutual Funds, Stocks, Video Resource|