The Great Mutual Fund Trap: An Investment Recovery Plan

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If you've been burned on Wall Street (and who hasn't?) but still need a practical place to park your savings (who doesn't?), Gregory Baer and Gary Gensler have your number. While somewhat mistitled because it decries "active investing" in individual stocks as well as in mutual funds, The Great Mutual Fund Trap is nonetheless a clearly and even entertainingly written argument in favor of the alternative: investing broadly in stocks that mirror the performance of the overall market. During their years in private investment and with the U.S. Treasury and Federal Reserve, Baer and Gensler have come to believe the high fees and high risks that go with always trying to beat the market make "active investing"--be it constantly fiddling with your own portfolio or relying on professionals to do so for you--a no-win proposition. Instead, they say, you can actually improve returns by shifting to "passive investments" that offer lower costs and greater tax efficiency. After explaining why they feel as they do, the authors thoroughly describe the appropriate vehicles--index mutual funds, exchange-traded index funds, and several other products--in a way that makes these staid options seem almost exciting and gives interested readers all the tools they need to utilize them. --Howard Rothman


From Publishers Weekly
Gregory Baer is the former Assistant Secretary of the Treasury for Financial Institutions, and Gary Gensler was once Under Secretary of the Treasury responsible for policies in the areas of U.S. financial markets, debt management and financial services. The two have teamed up to write The Great Mutual Fund Trap: An Investment Recovery Plan. Their book is meant for Americans who invest in the stock or bond market as a means to achieve long-term goals-such as paying their children's college tuition or securing their own retirement-but who, say Baer and Gensler, are paying unnecessary fees and running needless risks. Wishing to alert consumers to the traps that await them in financial markets, the authors offer alternatives and new opportunities for investors to improve returns and diminish risks, such as moving from "active" to "passive" investment, investing in international stocks, distrusting "hot funds" and investing in index funds. Conversational and easy to read, Baer and Gensler present realistic advice that will be useful to everyday investors. Copyright 2002 Reed Business Information, Inc.


From Library Journal
Smart Money claims that Gensler is one of the 30 most powerful people in investing, so we should listen when he says that mutual funds are no good.Copyright 2002 Cahners Business Information, Inc.


Review
"A compelling work that takes a hard look at how Americans invest their money, and suggests better options. A serious book by serious people, The Great Mutual Fund Trap also contains practical and humorous illustrations guaranteed to engage any reader."
---Lawrence Summers, former Secretary of the Treasury

"The folks at Fidelity are not going to like this book, but anyone who still invests via an actively-managed mutual funds or who buys variable annuities or who favors Social Security privatization should read it."
---Andrew Tobias, author of The Only Investment Guide You'll Ever Need

"Mutual funds have brought millions of Americans into the investment markets--and for that alone they deserve much praise. Unfortunately, the returns that many of these investors have received have been less than spectacular. The Great Mutual Fund Trap exposes many of the flaws that drag down fund performance and suggests ways that investors can tune out the noise and focus on meeting their long term goals. The mutual fund industry isn't going to like this book one bit, but its story needs to be heard."
---Don Phillips, Managing Director, Morningstar, Inc.

“In this fascinating book investors will get a new take on how the odds are stacked against them by Wall Street's vested interests. Gary Gensler and Gregory Baer, two of the stars of the Treasury Department during the Clinton years, tell consumers how to avoid the traps and make the markets work for them with less risk.”
---Arthur Levitt, former Chairman of the U.S. Securities and Exchange Commission


From the Hardcover edition.


Review
"A compelling work that takes a hard look at how Americans invest their money, and suggests better options. A serious book by serious people, The Great Mutual Fund Trap also contains practical and humorous illustrations guaranteed to engage any reader."
---Lawrence Summers, former Secretary of the Treasury

"The folks at Fidelity are not going to like this book, but anyone who still invests via an actively-managed mutual funds or who buys variable annuities or who favors Social Security privatization should read it."
---Andrew Tobias, author of The Only Investment Guide You'll Ever Need

"Mutual funds have brought millions of Americans into the investment markets--and for that alone they deserve much praise. Unfortunately, the returns that many of these investors have received have been less than spectacular. The Great Mutual Fund Trap exposes many of the flaws that drag down fund performance and suggests ways that investors can tune out the noise and focus on meeting their long term goals. The mutual fund industry isn't going to like this book one bit, but its story needs to be heard."
---Don Phillips, Managing Director, Morningstar, Inc.

?In this fascinating book investors will get a new take on how the odds are stacked against them by Wall Street's vested interests. Gary Gensler and Gregory Baer, two of the stars of the Treasury Department during the Clinton years, tell consumers how to avoid the traps and make the markets work for them with less risk.?
---Arthur Levitt, former Chairman of the U.S. Securities and Exchange Commission


From the Hardcover edition.


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Gregory Baer is the former Assistant Secretary of the Treasury for Financial Institutions, and Gary Gensler was once Under Secretary of the Treasury responsible for policies in the areas of U.S. financial markets, debt management and financial services. The two have teamed up to write The Great Mutual Fund Trap: An Investment Recovery Plan. Their book is meant for Americans who invest in the stock or bond market as a means to achieve long-term goals-such as paying their children's college tuition or securing their own retirement-but who, say Baer and Gensler, are paying unnecessary fees and running needless risks. Wishing to alert consumers to the traps that await them in financial markets, the authors offer alternatives and new opportunities for investors to improve returns and diminish risks, such as moving from "active" to "passive" investment, investing in international stocks, distrusting "hot funds" and investing in index funds. Conversational and easy to read, Baer and Gensler present realistic advice that will be useful to everyday investors. Read all 6 "From The Critics" >


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