Fund Managers make a lot of mistakes too!

I’m reading this book entitled Taming the Bear by Christopher Tate. Nope, it’s not a book about how to tame bears! It’s a book about trading and how to profit from down trending markets. I haven’t finished it yet but I thought I just had to share this little information with you.

One of the reasons why we invest through unit trust funds is because of the purported professional fund managers right? Well, note this info that I got from the book.

There’s this table in the book that tracks the performance of mutual funds in the United States of America for the period of 1956 to 1988. The table basically analyses the cash-to-asset ratio of the funds, and uses this findings as an indicator to determine whether the fund is bullish or bearish. During those 32 years, they got it right only 4 times.

Interesting huh?

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Other related posts:

Risk Tolerance Level
Risk Tolerance Level: Part 2
Back to Basics: Recovering from Negative Returns
Types of Mutual Funds (Unit Trusts)
Understanding Unit Trust
Fund’s Strong Performance

About nadlique

This blog is about the journey of a 28-year-old Malaysian towards financial freedom. This blog was started back when the blogger was 21 years old. However, his journey towards financial freedom had begun way before that. Materials such as investing, business, entrepreneurship, equities, and real estate are presented. The author also posts his thoughts and observations on life in general.


  1. hi.

    Just wondering, since ur quite knowledgable, why dint u enter market on ur own?

    Why go through the trouble of buying funds and paying soo much in fees when i see u actually more knowledgable than the average unit trust salesperson?

    Do u sell for Pbank?

  2. miss lee says:


    i’ve found your blog didn’t constructive and was not giving the actual situation about malaysian market to blog readers.

    which economy school did u attend to? sooo poor.

  3. @miss lee

    For your information miss lee, I’m just giving general comments on fund managers. Take note that I said general. Plus, not only Malaysia has unit trust industry. It’s a global thing. Also, If you have read journals, magazines, or books, that have discussions on mutual funds, a number of them agree with the fact that fund managers are not always right.

    Another thing, I don’t know whether you noticed or not but the information in this article was quoted from a book.

    On top of that, I’m participating in a few financial markets around the world, not just Malaysia. So, why should I only focus on the Malaysian market? Also, I suggest you to go and have a look at the bookstores near you, and tell me the proportion of financial books written in Malaysia versus financial books written in the US, or Australia for that matter. They’re also not explaining the actual situation about Malaysian market as well, am I correct?

    I may be a Malaysian, but I don’t have to comment on the Malaysian market alone. The bulk of materials from my blog might be about Malaysia but there are also materials for the international markets.

    The thing about finance is that, you can get the knowledge from US, Australia, UK, Russia, or anywhere else in the world, and then apply that knowledge to your own needs.

    For your information, fund management do not go under economics. It’s finance.

    By the way, what’s “didn’t constructive.”? Which school did you go to to learn English?

    Which school (It’s economics, not economy) of economics did I go to? Frankly, it’s none of your business.

    P.S. Why are you so offended anyway miss lee? Are you a fund manager yourself? There’s a saying in Bahasa Melayu , “siapa termakan cili, dia lah terasa pedasnya.”

  4. @csb

    I’m not exactly that knowledgeable csb. Learning is a life-long process.

    Commenting on what you said, I am indeed involved with the market directly.

    Why unit trust? Well, a number of reasons really. Some I won’t disclose, some I am more than happy to share.

    First reason, diversification. I’m a part-time derivatives trader here in Australia. At the same time, I also allocate some money for unit trusts in Malaysia to further diversify my “financial freedom” efforts. You know, just in case something bad happens.

    Second reason, I prefer leaving some of my money in Malaysia. It’s not much, but I prefer leaving it there. Rather than leaving them in a current account or whatever, might as well put them in unit trust funds.

    Third, as I’ve said before all over my blog, I’m not currently in Malaysia. Thus, I don’t have the time to monitor the Malaysian market.

    Fourth and other reasons, I prefer keeping it to myself.

    Talking about fees, every thing in life comes with costs dear. Also, I was not aware of ETF’s existence in Malaysia until I was in Australia.

    The question of do I sell for Pbank, do you mean, am I a Public Mutual Unit Trust Consultant? The answer is no.

    Are you a Public Mutual Unit Trust Consultant?

  5. The reason we invest in unit trust is to assign someone highly intelligent to take care and grow up our money..
    Let’s hope fund managers in malaysia make less or no mistakes when manage with our pooling money.

  6. Not exactly because they are highly intelligent but rather because they are doing it for a living (as a profession).

  7. Hi Nad.. I have something to ask u regarding the performace of unit trust funds. Since stocks were clearly in a downtrend and the economy generally was showing signs of weakening, what do u think about unit trust performance for the next 10 years?

  8. Hi Schumi,

    10 years? Are you serious? Hehe. As far as I know, nobody can predict what’ll happen tomorrow, let alone for the next 10 years. Personally, I don’t believe in predicting where the market is going.

    However, I do from time to my time have a little bit of fun reading other people’s predictions and also do predictions on my own. However, I never make any investment nor trade decisions based on any predictions at all.

    Let me give you an example. A few years back, the so called experts have been claiming that the Australian market is due for a crash or even a bear market, only to find the market advancing to new highs and new lows for the next few years. Only since the beginning of this year did the bear market truly materialises (yeah, after the market has increased by a few thousand points that is).

    Ok, back to predicting the unit trust performance.

    As we know, the US economy is under pressure at the moment. Our Malaysian experts have been talking about decoupling and whatnots, claiming that we won’t be affected that much by the US. I don’t think this is true. Like it or not, whatever happens in the US, will still be felt globally. As they say, when Wall Street sneezes, everybody else catches a cold.

    Talking about US and the problem it’s facing right now, some say that we are running the risk of having another Great Depression. i.e. a deep and long recession. What do I think of this? Well, the US might plunge into a recession but I don’t think it is to the extent of another Great Depression.

    Another thing to be talking about is the inflationary pressure felt globally. Be it in the US, Australia, or Malaysia. That’ll truly have a huge effect on global economy. Just look at the current oil price!

    So, all in all, what’ll happen in the next 2 to 3 years? I expect unit trust investors to experience negative returns or single digit positive returns (though very unlikely).

    However, one cannot rule out the prospects of the BRIC countries. i.e. Brazil, Russia, India, and China.

    So, there you go, my cut-down opinion of what’ll happen. Please take note that I am no expert and there’s also a high probability that I’ll be wrong.

    Anyway, happy investing!

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