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This is a good time to check and see how your mutual funds hedge funds or privately managed accounts have performed relative to their benchmarks following the market’s turmoil. You may recall from previous blogs that a benchmark is an index that best represents a fund’s holdings. An actively managed fund should be performing at least as well as it’s benchmark otherwise you may want to consider investing in the index itself thereby incurring lower management fees and fewer taxable transactions. Remember that index funds are not actively managed but rather a computer program simply buys the companies in the index. If you should decide to replace your holding with an index you may be able to capture a loss for tax purposes before the end of the year.
It is easy to compare the fund performance to the benchmark. If it is a mutual fund the information is available in Morningstar at most libraries. Morningstar also has an online site but much of the information is available only with joining for a fee and I find it is a bit difficult to find my way around the site. If you are invested in a hedge fund or with a manager in a separately managed account simply call the company and ask for performance data compared to the benchmark that they use for comparison.
You may also check the performance of mutual funds against the index through Yahoo. I will write about that in my next blog so be on the lookout. In the meantime enjoy the spirit of the season.