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Absolutely and for several reasons, none of which are more important than the other. We should be picking mutual funds using some criteria. Even if we haven't developed a good long range plan, how we pick a place to park our investment until we fully develop one is important. Mutual funds should be picked with track records. Has the fund done well over the last three to five years? If so, has the same person been at the helm? This person can receive the lion's share of the credit for the well being of your money. Using their performance as one of the criteria for picking a fund (the other two being no-load and expenses) can be worrisome if you hear that this person is leaving. It doesn't really matter that their new job might be a good move for them. Your money shepherd has left for a new flock. If this happens to you, don't panic. First thing is determine that person's influence. Recently at the Buffalo Small Cap fund, Tom Laming decided to depart. This fund, which by way of disclaimer I should tell you I own and is included in our Early Bird Portfolio, was part of a management team at Buffalo. His departure according to the fund will not impact the remaining two members of the team. Unfortunately, you now need to be a bit less passive about your investment. Managers are supposed to provide good communication to their shareholders about direction, frank comments about performance, and any changes in their strategy or investment outlooks. If this continues much the way it had in the past, you can probably count on some sort of continuum. If you fund had a solo manager, your watchfulness should be on high alert. Give the new person about six months or two quarters. By then, they will have positioned themselves and the result of any portfolio realignment will begin to show up. Be especially alert for any huge tax consequences as result of portfolio shifts due to sales or shareholder redemption. An exodus by fellow shareholders is not a good sign. Active-trade managers have funds that reflect their style. Index managers merely watch the helm and adjust the benchmarks. [ Close Window ] |