More than 90 million Americans have money invested in mutual funds. They are, by far, the most common investment vehicle for middle-class Americans. In total, mutual fund managers control over $13 trillion. That’s TRILLION, as in a thousand billion.
These highly compensated mutual fund managers control such enormous wealth because they have the smarts, the skills and the patience to provide impressive market-beating returns to their customers, right? Nope, not at all. Last year, 84% of mutual fund managers underperformed the broader stock market. And these results aren’t uncommon in the mutual fund business.
Mutual fund managers underperform because not only because they aren’t terribly good at making the right investment decisions at the right time but also because, just as importantly, they charge fees which eat into an investor’s returns.
Does that sound familiar? Well, it should. Because sports betting pick-sellers (aka touts) suffer from the exact same issues. The vast majority of touts aren’t terribly good at picking the right sides in the right games. As a result, clients don’t win. Worse yet, the fees touts charge eat into a sports bettor bankroll and makes it nearly impossible for them to make money over the medium or long term.
Now, it’s impossible to determine what percentage of touts lose money for their customers. Our educated guess: 99% of touts lose money. Okay, maybe it’s 98%. But it’s no less than that. A couple months ago, an article on Deadspin highlighted that 69% of handicappers at Pregame.com had lost money over an extended period of time (based on a study of nearly 26,000 picks). And that did not include the cost of the picks. If you factored in that cost, the percentage of losing handicappers at Pregame would be even higher.
Just like there are exceptions to the general failure rate in the mutual fund industry – like Bruce Berkowitz and Peter Lynch and John Neff – there are some exceptions in the pick-selling business – like RAS Picks.
But the exceptions are rare.
And that’s why we encourage people to be very very careful when buying picks from anyone. If they don’t have a long-term documented track record, don’t pay for picks. And even if they do show a long-term documented track record, Google them relentlessly to see what other independent websites (and past customers) have said about them.