Use The KISS Principle

Media / Blog

Use The KISS Principle


Five Vices That Could Ruin Your Financial Future

August 20, 2014

Today it is more complicated than ever for the average investor to really understand how to pick a mutual fund. Most novices may choose a fund if it has a 4-star or 5-star ranking. Or they decide to pick a fund because they did a Google search for best returns and then select one from the top of list. The truth is, most investors today would be lucky if they could name one or two actual positions that their mutual fund owns if they were asked. In my opinion fund companies could become more friendly if they used the Keep It Simple Stupid principle.

  1. First, mutual fund companies should provide consumers some sort of simple x-ray software so when they choose to buy multiple funds from a fund company, an investor can at least have some idea about how much the different funds overlap. Far too often, I see consumers who own three or four different mutual funds only to explain to them how many of the holdings from the funds are the same.
  2. Second, no more asterisks. I detest the asterisks. I know, fund companies will say that this is just part of the regulatory process, but when you have footnotes that start reaching 10 or more at the bottom of an ad it's likely you haven't made it easy for consumers. Unfortunately most investors won't ever read them to get the real scoop about the funds.
  3. Last, make everything transparent. The easier it is for an investor to be able to compare apples to apples, the better the experience will be. Fund companies often use obscure benchmarks consumers won't understand or state returns in a fashion that is difficult for a consumer to see exactly what they would have netted from investing in the fund.

Written by: Ted Jenkin
Request a FREE consultation:

If you would like to receive more information on making smart money moves for your future, be sure to contact us today!


Listen To What The Baby Has To Say

Sign Up

Sign up for our exclusive Sunday Paper with a weekly market commentary, insightful personal finance blogs, and life changing education guides.

Email sign up

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.

This site is published for residents of the United States only. Registered Representatives of Kestra IS and Investment Advisor Representatives of Kestra AS may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed. Not all products and services referenced on this site are available in every state and through every representative or advisor listed. For additional information, please contact Kestra IS Compliance Department at 844-553-7872.

PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. Kestra IS and Kestra AS makes no representation as to the completeness or accuracy of information provided at these web sites. Nor is Kestra IS and Kestra AS liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.