Some Good Reasons to Dump Your Mutual Funds

A couple of years ago I predicted the demise of mutual funds. I thought savvy investors would recognize the pitfalls in traditional funds and move to individual stocks and hybrid funds.

Then the market plummeted. Individual stocks became treacherous, and many experts argued that mutual funds proved their mettle during the market doldrums.

Fine. But financial planners think differently. They are moving rapidly away from mutual funds and into the exchange-traded funds on the Amex, where there are now close to 100 choices, ranging from broad market indices to an index of Real Estate Investment Trusts (REITs) to a Goldman Sachs natural resources index. There are a half-dozen different value and growth indexes, and the only health-care index fund available anywhere, so far as I know. ...