Can Your Own Mutual Fund Do Better?


In the long run is it better to create your own income mutual fund, or just buy the most popular ones being sold by the banks and mutual fund companies?

To answer this question, I refer to Tom Connolly from

Tom Connolly recently wrote a post about building your own portfolio versus buying an income fund.

One reason Tom Connolly, myself and others run our own portfolios is because we can perform much better versus the "store-bought" funds:

1. We can invest in specific superior dividend growth stocks - funds over diversify.
2. In aggregate our income rises each year - most funds do not increase distributions annually.
3. In our own portfolio we receive all the dividends - some funds don't pass along all the dividends.
4. We reduce risk with at least fair price purchases by using yield, G%D and cape - most funds are always fully invested.
5. We are disciplined and patient - fund managers often follow the crowd to keep their job.
6. We hold for the growing yield - fund managers trade (eight month average hold with funds).
7. Once established, we don't see the need for bonds - a 60% - 40% split is common in the fund industry.
8. There's no tax on gains until we sell - they pay annual tax on gains.
9. We count on dividends - they hope for higher stock prices.

There you have it, 9 solid reasons to invest for yourself by yourself......and we at Simply Investing can help you get there....just ask us.

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1 comment

Derek at

I also prefer investing by myself versus going with mutual funds with higher fees. I prefer using ETFs for the better tax positions and lower expense ratios.
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