March 16, 2009

Letter to Kiplinger's Magazine

Below is a letter sent to the editor of Kiplinger magazine regarding their April 2009 issue.

Dear Editor:

I enjoyed reading the article “Simple Plans to Beat the Market” (April 2009). This has been my investment strategy for a number of years now and has performed well for me. The Kiplinger portfolio, which sticks with one family of funds, is a nice idea. However, this can also be costly when the company decides to close the funds, which is what E*Trade decided to do recently.

I had all of my funds in the E*Trade family and was forced to liquidate them realizing large losses with each fund. I switched to other similar funds that track the same indexes thereby minimizing the effects of the losses, but it still doesn’t make me feel any better about the way E*Trade handled the situation.

Your articles could mention the possibility of a fund shutting down and what investors should do (sell now or hold until the liquidation date). I have yet to read any real analysis about why E*Trade closed its mutual funds.


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