How important is the manager's length of experience?

But just because a fund has a good year, doesn’t mean its management will repeat the results the following year. Take a look at the top performing managers of 1998:

#1 in 1998 came in. ... #2,898 in 1999

#2 in 1998 came in. ... #7,261 in 1999

#3 in 1998 came in. ... #45 in 1999

#4 in 1998 came in. ... #7,283 in 1999, and so forth.

As you can see, picking a top performing manager from last year is a lousy way of choosing a fund. You want consistent results, over many years.

Who chooses the Manager?

A mutual fund’s board of directors hires or fires the funds management. Their duty is oversight. They also decide what new funds, if any, should be created, and any failing ones that should be closed or merged.

As in any corporation, since directors are nominated for shareholder election by other directors or corporate management, the board is filled with friends, business associates, or even may have a celebrity such as an ex-sports star.

Other Stock Market Basics Topics:

1. Mutual Fund Advantages
2. History of Mutual Funds
3. NAV
4. Dollar Cost Averaging
5. General advice about choosing a fund
6. Mutual Fund Ratings
7. Evaluating Mutual Fund Investment Risk
8. Mutual Fund Share Classes
9. Mutual Fund Fees
10. The Mutual Fund Prospectus
11. How important is the manager's length of experience?
12. Why is the prospectus hard to understand?
13. Mutual Fund Annual Report
14. Comparing your fund to the competition
15. Comparing funds on an after-tax basis
16. Average Return on Investment
17. How Not to Pick a Mutual Fund
18. Cashing in Your Fund
19. When to Sell Your Fund
20. Mutual Funds and Asset Allocation
21. When to get started with a mutual fund
22. Types of Mutual Funds
23. Value Stock Funds
24. Growth Stock Funds
25. Small and Micro-cap Stocks
26. Mid Cap
27. Large Cap Companies
28. Income Stock Funds
29. Mutual Fund Index
30. Enhanced Index Funds
31. Sector Mutual Funds
32. Stock Market Sectors
33. Defensive Stocks
34. International Funds
35. Real Estate Mutual Funds
36. Socially Responsible Funds
37. Balanced Funds
38. Tax-Efficient Funds
39. Bond Convertible Funds
40. Junk Bond Funds
41. Mixtures of stock types
42. Closed End Funds
43. Exchange Traded Funds (ETF’s)
44. Stock Picking Strategy - Picking your own stocks?
45. Fund names, and what they really invest in
46. How to get started
47. Where can I start investing with no money?
    

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