Author: Jason

Last Thursday, Chris wrote about Big Mother Mutual Funds and pointed out some reasons why you might not want to buy the “biggest and best” when it comes to mutual funds. Another problem with large mutual funds is that they lose their flexibility to invest in small-cap stocks. These funds are making investments in the tens of millions, which could add up to a sizable percentage of a small-cap’s total shares. It’s hard for a larger investor to make (or pull out of) an investment worth 5% or more of a company.

If large mutual funds won’t invest in small-caps, who will? We will.

Pulling out of Index Funds?
In last Tuesday’s article, I talked about John Mauldin’s book Bull’s Eye Investing which speculates that we are in the beginning of a secular bear market. I’m just now getting to the part of the book where he talks about what to do about that situation. Among other things, Mauldin suggests buying small-cap stocks for value. Ben Stein suggests this kind of investing in any market: Want Big Returns? Think Small by Ben Stein.

SIRI is Downgraded After a Recent High
I was getting snug in my SIRI investment. Then some bozo at Bank of America downgraded the stock from “neutral” to “sell”.

I’m now four chapters through Bull’s Eye Investing by John Mauldin. I’ll post a full review once I’ve finished the book, but the basic message is that we are in a secular bear market¹. What that means is that, despite the fact that in any given year the market could be up or down, over the next 7-15 years the market will post a loss overall. Mauldin asserts that broad investments in the stock market over the next 10 years should expect returns of 0% (if we’re lucky).

Ouch.