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Subject:  Re: Asset allocation Date:  2/26/2012  8:27 PM
Author:  joelxwil Number:  70224 of 88532

if by 'Pro', one means the fund managers ,i don't know what they were thinking .

if 'Pro' is full-on brokers -- they were thinking it was a 'minor correction'. i think every week it would go down, i call and ask, "should we sell?" "O no. we've hit bottom"

Well, here is the thing. A mutual fund manager gets a cut of the assets under management. If the market is going down, he would rather have a cut of a declining balance than nothing at all. So he will never tell you to sell. That is really simple. And of course, the broker gets some kind of fee for generously allowing you to hold the fund in your account. So those guys are not likely to tell you to sell either.

If you want good, objective advice, do not ask a mutual fund manager or a broker.

Then there is the question: If you rightly know that one should sell, then why doesn't the mutual fund manager at least take a defensive position by buying some puts? Or in addition, selling some calls? Well, it may not be in the terms and conditions of the fund, but who made those up?
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