Monday, May 7, 2012

Regulation and a CYA society

I can see the reasons why we need regulations. Certainly, we do not want a company dumping toxic waste into the river or lying by omission about business and investment ventures. But there has to be a point when enough is enough.

I do not want to get into the environment vs business or political correctness run amok. Rather, I want to keep it strictly bottom line with my own investments.

Today, I took several envelopes sent to me by Fidelity and threw them unopened into the circular file. Well, that is a little exaggeration because I did open a few. Inside were shareholder update/ semiannual reports for each mutual fund we hold in retirements accounts. One fund per envelope.

Each one was well over 100 pages on that thin tissue paper they use to save weight. Right away, if they have to save weight you know they know that what they are putting out is too much.  Anyway, it runs into details I do not care about.

Yes, sometimes important information is hidden in there and yes it could steer you away from risky investments if you actually knew what you were reading. But why do you have to send it to me? It goes from mailbox to land fill with no information flowing into my head. Well, at least you covered your butt and sent it.

This stuff should be available on line and by request in 2012.

But investors need protection, you say? I agree. That's what they get the big bucks at the SEC for (sic).

From my point of view, this cuts into my return. All of this regulation makes jacks up fees and because I have to pay for the printing and mailing and the army of lawyers needed to facilitate it.

It also makes a good argument to buy an index fund and fuhgeddaboutit, save for general market timing of the big picture.

Investors cannot time the market, you say? Guess what, neither can fund managers.

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