Large funds are very hard to maneuver. Money managers have a hard time moving the assets around quickly which can lead to underperformance. Be Cautious of New Funds Recent statistics show that two new funds are brought to the market everyday. This rule does not mean don t invest in a new fund. It means that before you invest in a new fund find all the information you can on the management team of the fund and what their investment style is.
Bad press can absolutely destroy a sector fund.
A good example of this is the Lexington Troika fund. Do not allow the media to persuade you to making an emotional decision. That s not to say that you should totally disregard the facts. The media s sensationalism of an event should warrant further investigation. Remember, the two emotions that get investors into trouble are fear and greed.