Starting a mutual fund

[Shoe]

[ QUOTE ]
Any monkey with some darts and a dart board can run a mutual fund. The performance tables for funds are the proof of this.

The difficult part for the monkey is attracting the cash. This is especially difficult because very few monkeys have any sort of track record or credibility when it comes to managing money.

So:

1 - How are you going to attract the investment?
2 - How are you going to turn a profit with 0.5% fees? This equates to $5000 in fees per $1000000 invested. If it's a managed portfilio you have significantly more time, regulatory, and financial costs to bear. You need a lot of money to manage to make it worthwhile.

questions #3 to #100 will follow once 1 & 2 have been addressed.

[/ QUOTE ]

1. I plan to publish my track record, and am confident that over time, my results will speak for themselves and will attract investors.

2. That is a very good quesion. I am still learning how fees and everything work. As I don't plan to have anyone on the payroll besides myself (and the occasional accountant/lawyer that is hired on a limited as-needed basis), I hope to keep fees to an absolute minimum. I am not yet sure how realistic this is but hope to find out. However, I do not expect or want to get even a fraction of what some of the funds charge today (as I think many of the fees are outrageous).

[DcifrThs]

ok. wow.

you need to know a TON of sh*t right now.

- you need to become a registered investment advisor. to take anybody's money and earn a fee, you need to legally set up a fund. this costs about 12k.

- you need to get yourself set up correctly, legally. this is not easy. you also have to be audited & what not. this costs money.

- you need a prime broker, hopefully more than 1. in order to gain money of people who have less than $1mil net worth (or whateve that money is) you have to get some other accredations or whatever.

i obviously don't know everything about this but you get the point.

it's not that easy to just set up a fund and collect money.

it's also like a catch 22: you need a history to get new money, and you need money to get a history.

gl though,
Barron

[emon87]

lol.

[kyleb]

this post

wow

lol

[B00T]

you are a disgrace to footwear [img]/images/graemlins/frown.gif[/img]

[DLKeeper1]

[ QUOTE ]
you are a disgrace to footwear [img]/images/graemlins/frown.gif[/img]

[/ QUOTE ]

hahaha

[prohornblower]

[ QUOTE ]
you are a disgrace to footwear [img]/images/graemlins/frown.gif[/img]

[/ QUOTE ]

AWESOME!!!

[SteveOMS]

It's even more involved and expensive to start a mutual fund then Barron described. In fact I think its safe to say its impossible for an INDIVIDUAL to just start a mutual fund. (although with enough $$ a individual can start a corporation or private company then open a fund). The auditing, reporting, custody and regulatory requirements would KILL you, and expense ration of <.5 would never work and you'd lose tons of money laying out all these costs.

But instead of just harping on the insanity of everything behind this (lol) it would be much easier for you to start a private fund of which there are many ways to structure that would be easier and cheaper, could be a hedge fund, partnership (NHIT or CIT trusts) or other private investment vechicles. As yes I have been involved in the start up of new mutual funds and collective investment trusts so believe me when I say the costs of starting your own mutual fund is an absurdity.

Cliff notes: or you could just take a match to all your money and make it easier!

SteveOMS

[maxtower]

A regular mutual fund will be prohibitively expensive as others described. One thing you could do is start a newsletter. People pay to subscribe like a magazine, and then you send them your trades every month or quarter or whatever.

Look up Hulbert Digest. This is a newsletter that tracks the performance of other newsletters. Send them copies. Once you have beaten the market for a few years, they'll probably rank you highly. Then you'll really start to sell subscriptions. I imagine that if you are successful enough, the money will find you. No start up fees required, you'll make money, and you'll be publicly tracked. I think that this would satisfy your goals.

[pig4bill]

I played poker with a guy at Bally's that ran a newsletter and hedge fund. He had something like 5000 paying subscribers at $79 a month. Plus his hedge fund had tens of millions and was showing a return of middle teens. With the newsletter and the 2 and 20 from the hedge fund, he probably makes more money than most mutual fund managers.