BGR, women are always impressed with me. I wish. <g>
You really can't tell how often you would have to shift. It depends upon the manager and his relationship with his firm and his health, etc. For example, Fidelity Contrafund and Magellan have remained top performing funds, beating the market by a bunch, for at least the last 15 years and I think that number goes back much further. Yet, they have both had more than one manager during that time. My guess is that a superior equity manager today has about 5-10 years at any one fund. After that, he is either promoted to some other job, hits the bid and moves on to another co., starts his own firm, or sits around and counts all the money he has made. That fund may continue to be a superior performer, but you are taking a risk. I would move to another one with a long performance record and a manager who is not moving on.
Several points: 1. This works better for tax deferred accounts than for regular accounts. 2. Obviously, negative load funds are preferable, though no loads are acceptable. 3. You have to be leery of sector funds that have done well over a long period of time. For example, many health care funds have outperformed for the past 15 years, but I would not buy one on the idea they may outperform over the next 15. I think that is a bad bet that happens to be too risky. And, besides, if you have a brilliant manager, why tie his hands by limiting his investment choices? |
