Hedge Funds vs. Mutual Funds

Hedge Funds vs. Mutual Funds


I provided a quote yesterday to Daleela Farina, an author over at BloggingStocks.com. Here is an excerpt from an article she just published on hedge funds and mutual funds:
Has your broker repeatedly sold you on the "safe" investment vehicle, the mutual fund? Investing in a wide variety of prominent companies, with solid, long-term track records, mutual funds have been an easy-to-understand and popular investment choice for decades.

Mutual funds are hugely diversified, holding large stakes in recognizable names such as Google (GOOG), Citigroup (C), Walmart (WMT), Starbucks (SBUX), General Electric (GE), Bank of America (BAC), and Fannie Mae (FNM).

A few years ago, doubting these dominant brands would have been considered foolish. This narrow-minded thinking is representative of our formerly uneducated and naive views on the market. But after last year's performance, mutual funds' investment model has now been proven obsolete. Like the dinosaurs. source

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