Mutual Funds Exposed: What You Don’t Know May Be Hazardous to Your Wealth written by authors and financial experts Dr. Kenneth A. Kim and Dr. William R. Nelson, is now a national Bestseller on Amazon in under 24 hours, and explains the long term underperformance of mutual funds and proposes modern alternatives.
San Rafael, CA -- (ReleaseWire) -- 04/21/2016 --Mutual Funds Exposed, 2nd Edition: What You Don't Know May Be Hazardous to Your Wealth is written by Ph.D economists Kenneth A. Kim and William R. Nelson to shed light on the challenges of investing in mutual funds and proposes a modern alternative.
Most Americans invest in mutual funds, either directly or through their retirement accounts, and yet the long term track record demonstrates that most mutual funds under-perform commonly used benchmarks, such as the S&P 500. This long term under-performance jeopardizes the financial well-being of millions of Americans.This easy-to-read book explains why this occurs, and provides a model for investing like ultra wealthy individuals and institutions, who generally avoid mutual funds.
"This book is both entertaining and highly relevant for individual investors."
– Erik Lie, PhD, TIME magazine's 100 most influential people in the world in 2007 for his contributions to uncovering options backdating scandals; Professor of Finance, University of Iowa
Even though mutual funds became popular in the 1920's as a way for ordinary Americans to own a diversified portfolio of securities managed by professional money managers, over the years mutual funds have exhibited structural challenges that have caused them to generally under-perform. Dr. Kim and Dr. Nelson reveal these challenges in this clearly written, approachable and even humorous book. Some of these challenges include:
*High costs: Mutual funds are expensive to set up and operate
*Embedded Capital Gains: Mutual fund shareholders can incur capital gains taxes on stocks in the mutual fund that they actually lost money on. This is known as "embedded capital gains."
*Hidden Costs: Mutual fund shareholders are paying many costs of trading from other investors coming in and going out of the mutual fund, and many of these costs are hidden
*Over-diversification: Mutual funds can over-diversify, which may drive down the fund's ability to achieve out-performance and may increase undisclosed hidden costs
*Non-transparent: Mutual funds have to reveal their holdings only four times per year and even then with a significant delay
*Sneaky behavior: Mutual funds may even engage in sneaky behavior.
All of these challenges add up to significant drags on performance, explaining why so very few mutual funds out-perform commonly used benchmarks over the long run. "If investors are primarily invested in mutual funds, they are behind the times," concludes Dr. Kim.
"Dr. Kim has provided us with a great explanation of how mutual funds work, offers important caveats about relying on these funds and suggests an interesting investment alternative. In addition, this is great fun to read!"
– Annette Poulsen, PhD, former Chief Economist, U.S. Securities and Exchange Commission; Professor of Finance, University of Georgia
But the book doesn't stop with an exposé of the mutual fund challenges. This book also offers the reader modern alternatives to investing that ultra wealthy individuals and institutions have enjoyed for decades. These alternatives have only recently become available to those with smaller portfolios because of technological advances. Some of these advantages include:
-Separately Managed Accounts (SMAs)
-Access to multiple institutional money managers
-Broad geographic and asset class diversification
-Tax efficiencies, including tax loss harvesting
-Socially responsible investing
Individual Investors and financial advisers can obtain a copy of the book in Kindle format or hard copy via Amazon.com.
About Dr. Kenneth A. Kim
Dr. Kenneth A. Kim has been a finance professor for 20 years. His academic career was spent exposing inefficiencies in financial markets and in financial industry. His dedication to protect and to help individual investors motivated appointments as a senior financial economist at the SEC in Washington, DC, and as a consultant for the CFA Institute. Dr. Kim has been quoted or his research has been cited in New York Times, Wall Street Journal, Washington Post, and so on. Dr. Kim is now Chief Financial Strategist for EQIS Capital Management, Inc. For complete information on Dr. Kim, visit http://www.kennethkimphd.com
Dr. William R. Nelson is a former member of the Chicago Board of Trade and a former professor in the finance department at the State University of New York at Buffalo. When Dr. Nelson was an academic scholar, his primary research (which was published in prestigious journals such as the American Economic Review, Journal of Economic Behavior and Organization, and Public Choice) focused on how fairness and fair play affect decision-making, choices, and outcomes, and on how to mitigate corrupt behavior. These research interests were spawned from his life-long passion for fairness and fair outcomes, which is why he was particularly keen on coauthoring a book that exposes mutual fund flaws. Dr. Nelson is currently the Chief Investment Officer at EQIS Capital Management, Inc.
Dr. Kenneth A. Kim
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