i thought it would interesting to tell others about their worst experiences with traders or funds.there are some real turkeys out there and this info could serve to warn others. i will start with a fund that friends of mine put money in at the top.the fund name is the grandprixfund.this guy had a good year in 99 but since then he lost 32% in 2000,56% in 2001,30% so far this year.when the money was put in at the top the fund had 700 million in it.it now has about 70 million or less.how is it possible to be that bad?to top it off the guy charges 5% load and heavy yearly expenses. http://www.grandprixfund.com
By Paul B. Farrell, CBS.MarketWatch.com Last Update: 12:50 AM ET Sept. 7, 2001 LOS ANGELES (CBS.MW) -- So you think you're stupid? Shoulda gone to cash early last year? Too heavy in tech? Caught up in the get-rich-quick-and-retire-early insanity? Now you doubt your skills so much you're sitting in cash on the sidelines? OK, so you really do think you're a dumb investor. I hear you. But trust me, there's dumb. There's dumber. Then there's the dumbest -- the ones who take the buy'n'hold strategy light-years past "hope springs eternal" and into the "stupid pet tricks" galaxy where they won't let go even if it's a shark biting. Good news -- millions are dumber than you It'll cheer you to know that there really are many investors out there who are dumber than you'll ever be in nine lifetimes: Proof positive you're actually a much smarter investor than you think. This article evolved after reading a Barron's cover story, "Too Many Funds," about how funds just keep multiplying even in a crappy market. We now have about 8,600, almost three times as many as in 1990. Barron's says funds multiply like rabbits. New ones pop. Losers die hard. Reminds me of analysts' "sell" signals. Nobody wants to kill a turkey -- especially in an industry where the average fund manager makes $432,500. That's 10 times what the average American earns. Turkeys in 9 style-box categories Barron's got me thinking about the biggest long-term losers that never say die. So I went into my trusty Morningstar database and checked out all nine major style-box categories: From large- to mid- to small-caps. And from growth to blend to value. Screening for the nine worst funds on a 10-year basis. Funds only a brain-dead investor would buy'n'hold -- and hold. God only knows why. What I found is that no matter how bad it is today, there are thousands of trusting souls who are much dumber than you and me. (An oddly comforting feeling, isn't it?) So let's look at the worst funds still surviving after a decade in each of the nine categories, despite being terminal under-performers. I promise you, this'll bolster your confidence for the coming recovery and the next bull market: Worst large-cap growth fund (out of 2,067) Fidelity Emerging Markets (FEMKX: news, chart, profile). This large-cap growth fund should be in the "submerging" market category. Averaging a negative 1.4 percent annual return per year and still investors keep $261 million in this non-domestic turkey. By contrast, Fidelity Select Software is the category's best with a 26.1 percent 10-year average. Worst large-cap blend fund (out of 2,117) AIM Japan Growth (GJGRX: news, chart, profile). With a 10-year average return of minus 2.3 percent this is the worst of 2,117 large-cap blend funds. Plus a 5.5 percent front end load. This $95 million fund should consider hari kari. The managers must love inspecting the properties and praying in temples that the Japanese economy will recover someday. The category's best? Fidelity Select Electronics with a 10-year annual average of 30.7 percent. Worst large-cap value fund (1,381) Vanguard Pacific Stock Index (VPACX: news, chart, profile). Here's a totally indexed fund that tracks the Morgan Stanley Pacific Index and is returning a paltry 0.28 percent average annual return over the past 10 years. Still investors keep $1.9 billion in a fund that can't beat inflation. At least it's a no-load. OK, so "it's the Asia economy, stupid." So what. Best in category: Fidelity Select Home Finance with an average 24.4 percent 10-year return. Worst mid-cap growth fund (of 992) Dreyfus Premier Aggressive Growth (DRLEX : news, chart, profile). Another load fund charging 5.75 percent, for a negative 2.9 percent average for 10 years. Yikes! Fortunately there's only $89 million still losing money here. Compare that with Seligman Communication & Info's 24.5 percent 10-year return. No comparison. Worst mid-cap blend fund (of 379) Merrill Lynch Natural Resources (MBGRX: news, chart, profile). There are actually 6 worse mid-cap blends but they're all gold fund losers, one that's actually lost an average of 11.7 percent a year. This fund's in positive territory with a 4.5 percent 10-year average. Big deal, it's averaging 10 percent less than the S&P 500 index. The category winner: Invesco Leisure with a 21.3 percent average. Worst mid-cap value fund (of 668) U.S. Global Inv Gold Shares (USERX: news, chart, profile). The mid-cap value category has no less than seven gold funds with negative 10-year returns. Only a glutton for punishment searching for fools gold would love this $20 million loser, averaging a negative annual return of 21.1 percent. Try a winner like Weitz Partners Value with its 20.9 percent average returns. Worst small-cap growth fund (of 627) Alger Small Capitalization (ALSCX: news, chart, profile). Huge losses this past year, and still the fund's averaged 7 percent annually. But that's no better than a passive Russell 2000 index fund, or a good ultra-short bond fund. And to add insult to injury, there's a 5 percent load. One of the best is no-load Wasatch Core Growth with its 20.1 percent 10-year average. Worst small-cap blend fund (of 322) FPA Paramount (FPRAX: news, chart, profile). Actually the category's worst is yet another gold fund. This one was the second worst with an anemic 5.6 percent 10-year average. Plus they'll soak you 5.75 percent to buy into this $78 million has-been. Best small-cap blend is Merrill Lynch Small-cap Value with a 10-year average of 17.4 percent. Worst small-cap value fund (of 329) DFA Japanese Small Company (DFJSX: news, chart, profile). Hey guys, small-cap value is supposed to be the hottest category today. You're supposed to be the great masters of value investing. You got a highly-educated management team. And yet this $87 million fund has suffered average annual losses of 6.8 percent the past 10 years. Why? A sixth grader could do better. Heartland Value did, with its 18.7 percent annual average. See, I told you, you're feeling better already. Things aren't as bad as you thought. Imagine the poor dumb buy'n'hold suckers in these nine funds for the past 10 years. Suddenly you'll realize you're not as dumb as you think. Go celebrate. Splurge. Dinner out at McDonald's tonight.