Well, just look at it this way. The more options you have, the more research you have to do. Let’s say fund A, what is it all about, how was the previous stats, who is handling it, what’s the history, and what are the companies the fund manager invests (normally) in. Then go on and check these companies 1 by 1 ….. if you really want to go to that extent.

Compare this with going to the stocks that you’re interested in and do research on these companies…. i seriously don’t see any difference. If one really wants to do a thorough research, I can say the research into mutual fund can be more challenging.

So what most people do in the end? They listen to the so-called fund agent who will always promote the latest funds and some even encourage you to trade often.

Does that sound “safer” to you as compared to stock investing?

I think at the end of the day, what I really want to say is that when given too many options, people tend to be lazy and not do any proper research for themselves. They just listen to others. And the current mutual fund world is like that which is, IMHO, not much different from stock investing.

Last but not least, the mutual fund industry in the US is much larger than ours. Before this, this industry prospered and helped investors earn. Then people started to introduce more n more funds…and the losses keep going up as well. And not surprisingly, only 30-40% of the fund introduced in the last 5 years managed to survive. Before this, the so-called ‘success rate’ was higher.

p/s…. to add on, Seth Godin did mention also that people are afraid of having too many options. They’re afraid to pick the wrong one. Ask people why they don’t dare to go into stock investing, they will tell you it’s either they don’t know which right stock to buy, or they’re scared of the amount of money involved.

jz my 2 sen.

I prefer stock rather than mutual fund for the time being. XD
Mrcoolku´s last blog ..Stock Market Welcome You