AboutWarren Boroson Expertise Author of "Keys to Investing in Mutual Funds" (Barrons), "Ultimate Mutual Fund Guide" (Probus), "How to Pick Stocks Like Warren Buffett" (JKLasser), and "The Reverse Mortgage Advantage" (McGraw-Hill). Former financial columnist for Gannett News Service.
Experience Author of 20 books; winner of 1996 Personal Finance award from Investment Company Institute and Washington University. Formerly on staffs of Money and Sylvia Porter's Magazine. Had a radio program (on WEVD) about mutual funds and a newsletter, FundDigest.
Is it true that most mutual funds lose money,and do not deliver any growth. My second question
is are mutual fund managers also investing money
in bonds and stock options in foreign markets.
yours
Marc
Answer Dear Marc:
No, it isn't true that most mutual funds lose money.
According to Morningstar Mutual Funds, the average U.S. stock mutual fund has returned 9.59 percent a year over the past 10 years (through 10/31/04). Foreign stock funds have returned 4.98 percent a year. General bond funds have returned 6.5 percent.
It's true that LARGE GROWTH funds, over the past five years, have done poorly--down 6.1 percent. But over 10 years, they're up 7.83 percent a year. The five-year record reflects the tech wreck.
Mutual funds are a good way to invest in the stock market because you get (a) a diversified portfolio, and (b) a manager who probably knows what he or she is doing (unless you spring for an unmanaged index fund).
Yes, many mutual funds invest in bonds of different types--corporate, government, foreign, and so forth. I don't know of any U.S. managers who invest in stock options in foreign markets, though.
