Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Don't Let This Mutual Fund Move Trick You

In a strong bull market in 2013, most mutual funds have performed fairly well. But as the end of the year approaches, some mutual funds resort to a sneaky trick to try to convince investors that their managers made smart moves that they actually missed out on.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at the practice of window dressing, by which mutual funds buy winning stocks right before the end of a quarter so that the stocks will show up on their quarterly holdings report. Dan explains that fund managers don't want to look like they missed out on big gains, so the temptation to buy winners puts a lot of pressure on them. Dan observes that this quarter, (NASDAQ: AMZN  ) and FedEx (NYSE: FDX  ) are likely candidates for managers to use for window dressing, along with Valero Energy (NYSE: VLO  ) and Micron Technology (NASDAQ: MU  ) . Dan goes through the reasons why Amazon, FedEx, Valero, and Micron have done so well, but points out that if funds haven't actually generated strong returns, investors should be suspicious and check to see just how long the fund has owned those holdings.

Find the secret to winning stocks
They said it couldn't be done -- that someone couldn't consistently pick stock winners year in and year out. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2765550, ~/Articles/ArticleHandler.aspx, 10/21/2016 7:58:05 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 10 hours ago Sponsored by:
DOW 18,162.35 -40.27 -0.22%
S&P 500 2,141.34 -2.95 -0.14%
NASD 5,241.83 0.00 0.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/20/2016 4:00 PM
AMZN $810.32 Down +0.00 +0.00% CAPS Rating: ****
FDX $169.70 Down +0.00 +0.00%
FedEx CAPS Rating: ****
MU $17.21 Down +0.00 +0.00%
Micron Technology CAPS Rating: ***
VLO $54.77 Down +0.00 +0.00%
Valero Energy CAPS Rating: ****