I read Canada’s largest and most successful national daily newspaper everyday (The Globe and Mail).  I read the electronic copy of the daily printed version (I do pay for this subscription lest you think I am cheap).

Mostly I just read the business section (my wife thinks it is a real waste as the paper is full of valuable information.)  Mainly, I find the columnists present perspectives I am aware of and agree with 80% of the time, 10% of time it is new ideas and 10% of the recommendations I disagree with.  So on the whole my daily read of the paper reinforces my high opinion of myself and all is good.   That is, I am aware of most of the recommendations and ideas about financial management, taxation, budgeting etc and the columnists agree with me so I must be good.  (Please take my ability and desire to pontificate on this subject with a grain of salt. )

Sharing a Thought from the Globe

Occasionally I do come across  some powerful and valuable ideas.  I guess it’s like gambling, infrequent rewards keep me reading the paper.

Last Tuesday there was an interesting article about fund managers level of investment in the funds they manage.  In the US reporting of the managers level of investment is mandatory and Morning Star (a Chicago based investment research company) used this information to see if there was any correlation between the level of investment by the fund manager and the funds performance

Surprise

The research showed a clear and definitive correlation between the amount of money the fund manager(s) had invested and the overall performance of the fund.  The more skin the manager has in the game the better the performance.

This finding seems intuitive, the part that was new to me was Canadian regulators do not mandate the sharing of this information and Canadian funds rarely do share it.  Of course you can ask (but apparently not many folks do) but the fund company is not required to disclose, only if they want to.

Personally, my wife and I divested ourselves of all mutual fund holdings years ago (too expensive and only you really care how your money is invested); however, I found this article enlightening as it reinforced my view that you are the best person to manage your own investments.    If others do it for you for a fee and do not have risk of personal loss, well let’s just say their attention could be limited.