Bad Mutual Funds

Mutual Funds are bad for Americans. We all want our Mutual Funds to earn high rates of return for us. We justify the return because we 'risk' our money in the fund.

In the mean time, our friends and relatives are getting laid off, working more overtime, and generally turning into stress-buckets. Of course, while employed they're feeding the 401K Mutual Fund machine.

What's going on with that 401K Mutual Fund? Well, they take money from tens of thousands of Americans and buy really large quantities stocks in US corporations. Of course, the Mutual Fund Manager, who may be with the fund from months to a few years really only has one objective. Make money this quarter for the quarterly bonus review and payout. So, that manager, using the leverage of thousands of individuals money can leverage large stock purchases/sales to persuade the CEO to drive for quarterly profit, at the expense of long term planning.

So while we employees wonder what the Corporate big-wigs are thinking when they down-size, demand OT, fail to invest in R&D and Capital equipment... The CEO is turning the money saved in the short run over to the "stockholders" who now happen to be Mutual Fund Managers. Who, by the way, sell the shares after the quarterly dividend payout driving down the worth of the shares that our companies compelled us to buy through a Company Match in corporate stock program.

And we plow more money into Mutual Funds, 401K's, IRA's... all of us hoping to get rich... working desperately longer hours for less while the CEO and the board of directors take handsome bonuses in the face of dismal news on the corporate front.

Yes, this yarn contains contradictions, however, some of it rings true... and makes rational sense out of otherwise apparently irrational acts.

Moral: Invest in stocks of sound companies and eschew Mutual Funds!