Top US manager: stop chasing hot funds

Portfolio manager says investors must focus on the long term.

Greg Carlson 29 June, 2004 | 3:47PM
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The head of a small fund company, with several offerings that posted big gains in 2003's rally, delivered a time-honored message to attendees of the 2004 Morningstar Investment Conference, held in Chicago last week: Don't place importance on short-term returns.

John Montgomery, manager of such funds as Bridgeway Ultra-Small Company Market and Bridgeway Aggressive Investors 1, spent the bulk of Friday's keynote speech decrying the damage to investors' returns wrought by the short-term focus of shareholders, the fund industry, and the financial media. He also advocated contributing to nonprofit organizations.

Montgomery pointed out that the skills people use in the rest of their lives work against them when choosing mutual funds. For example, shoppers attempting to choose a

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Greg Carlson  Greg Carlson is a fund analyst with Morningstar.

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