The Sage Guide to Mutual Funds

date Dec 6, 2007
authors Alan and Stephen Cohn
reading time 1 min
  • Book Title: The Sage Guide to Mutual Funds - Superior Investment Wisdom form the Number One - Online Mutual Fund Gurus
  • Authors: Alan and Stephen Cohn - founders of Sage online
  • Year written/published: 1999
  • Some extracts:

subjective test on

  • gather your group of potential funds
  • enter the fund ticket symbol
  • has the fund performed in the top 50 percent most years?
  • is its alpha, under the ‘best fit index’ column, greater than zero?
  • is its ‘bear market decile rank’ 6 or lower?
  • does the fund hold multiple sectors and have less than 40% of assets in all sectors?
  • does the fund have at least 80% of its assets in stocks?
  • is the start date of management at least 3 years?

risks and returns…

  • low risk, high return - well-diversified portfolio
  • high risk, high return - large stocks
  • low risk, low return - bonds
  • high risk, low return - small stocks, international, emerging market

international stock subjective test..

  • is its alpha, under the ‘best fit index’ column greater than zero?
  • is the sharpe ratio greater than 0?
  • does the fund have exposure in at least 3 of the following regions? Europe, Japan, Latin America, or the Pacific Rim?
  • Does the fund have less than 65% of its assets in each region?
  • Under the ‘country exposure summary’ are there more than 4 countries listed?
  • does the fund hold no more than 20% of its assets in any one country?

some useful indexes for specialised funds…

  • value line index
  • lehman brothers aggregate bond index
  • MSCI EAFE Index