First of all, any particular reason for you to use Schwab? I definitely won’t use a broker if it charges me up to $50 to buy a mutual fund, no matter how good the broker is! There are plenty of discount brokers out there which charge much less for buying no-load mutual funds, such as Scottrade and Firstrade. I am using Scottrade and I pay $2 per transaction with their automatic investment plan. What I am saying is $50 fee is just too much. If you buy five funds with your $5000 annual limit and each gets $1000, then $50 is like 5% that you lose right away. If possible, you may want to consider a different broker if you want to buy transaction fee funds such as CGFMX from Schwab.

Now for CGMFX, I don’t use “bargain” when choosing a fund. Right now, the performance of CGMFX is largely due to its investments in oil and oil services companies which benefit from the high oil price. Nobody knows whether $100 oil will be the norm going forward, but the price comes down, then CGMFX probably won’t generate that kind of return you see last year. However, CGMFX has a strong tracking record even before the oil boom. Since it’s an actively managed fund, the performance relies on the fund manager’s ability to pick the right stocks at the right time. But I am quite with it after being an investor for 5 years.

As of other funds, I am not familiar with all the funds you listed, but it seems that you want to invest in global markets. One thing to note in this area is that China had a good run in the past two years, but its stock markets dropped sharply since last October, losing nearly 50%. This shows the volatility and risk of investing in a single country. For an IRA account where the investments are supposed for the long-term, I feel it may be better to buy a fund that invests in broad global stock markets including both the developed and developing markets than invests in a single country such as China or India. Besides, you will also need to decide how much you want to invest in this category (global equity fund) as well as other categories.

I am regular reader of your blog (although not an active commenter), and I really appreciate all your efforts in maintaining this blog that helps financial novices like me. I have a question and would like your unbiased opinion. The question is connected to investing in mutual funds. I believe that I read in one of your earlier blogs that you had CGMFX (the CGM Focus) fund as part of your portfolio. I am getting ready to buy some MFs in my Roth IRA and was wondering if CGMFX is a better bargain when compared to others such as HIINX (Harbor International), JAOSX (Janus Overseas), MCHFX (Matthews China), MINDX (Matthews India), and FCNTX (Fidelity Contra); all of which are on my narrowed-down list. I have my Roth account at Schwab and would end up paying a transaction fee (up to $ 49.95) to buy CGMFX, but there is no transaction fees for some of the other funds that are part of Schwab’s ‘No-load, No-Fee’ list [JAOSX, MCHFX, MINDX].

Any suggestion would be appreciated.

Thanks,

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