Mutual Fund Problems

pspr · Nov 3, 2003

Many may think the problems we are seeing with mutual funds are new. Not so. In 1978 when I was a new stock broker mutual funds had such a bad reputation that we were told not to use the term "mutual fund" but instead "investment trust" so customers wouldn't just hang up on us when suggesting mutal fund investments.

Wally

IndexTrader · Nov 3, 2003

Why did they have a bad reputation back then?

Quote from pspr:

Many may think the problems we are seeing with mutual funds are new. Not so. In 1978 when I was a new stock broker mutual funds had such a bad reputation that we were told not to use the term "mutual fund" but instead "investment trust" so customers wouldn't just hang up on us when suggesting mutal fund investments.

Wally

pspr · Nov 3, 2003

Quote from IndexTrader:

Why did they have a bad reputation back then?

I don't recall all the problems (25 years ago) but basically investors were big losers in mutual funds during the bad markets of the 70's. There may not have been many regulatory scandals but front end loads of 8.5% to 9% were common, management fees were higher and funds mostly underperformed the overall market significantly.

Wally