There are eleven types of mutual fund: knowing them will help you find the good and avoid the bad. — Spend time studying funds, and you’ll begin to recognise “types” that crop up over and over again. Get to know these types (there are eleven of them) and you’re on your way to understanding which funds to hold, and which to avoid like the plague. I originally identified these when…

I’ve heard thousands of investment philosophies and processes. Which is the best? — Cutting my hair, rewiring my home, and investing my money in individual shares — all things that should be done by someone who isn’t me. Which is why I use trustworthy, experienced professionals who care about results. But only for the third — buying shares — do I occasionally daydream about doing it myself. That’s today’s question. Having interviewed hundreds of fund managers, how would I manage an equity fund myself? Which ideas would I nick, and which would I leave on the shelf?

What’s the best hunting ground for fantastic ten-year returns? — I try not to give our clients heart attacks. I put this down to basic decency, but cynics might argue it’s because not killing customers is bottom-line accretive. Whatever. The fact is I want our clients to be get rich slow and survive trying, so performance-induced coronaries are out. But what if I didn’t care about fibrillating our investors? What if I was gunning purely for maximum ten-year total returns instead? Well, then I’d only hold small-cap value funds. And specifically small-cap value funds that are both well run and right-sized. Because they generate gob-smacking returns over the long…

Investors are abandoning small caps in favour of big companies, because the behemoths always fare better in tough markets, right? Nope. They don’t… — This year has been a nightmare for most active fund managers, particularly in the US. Markets have risen, but much of that is because the index’s mega-caps have rallied while most smaller (or, more accurately, less huge) companies have flatlined. Sensibly diversified active processes just don’t work under those conditions.

To reach the peak of the investment world, you must balance several contradictory impulses. This is hard, but the best make it look easy. There are plenty of competent fund managers. Sadly, merely being competent won’t justify their fees, let alone mine on top. So, as a professional fund buyer, I need to find exceptional managers, and they’re a rare breed. They’re rare because they have an unusual collection of characteristics, some of which…

The investment industry says volatility equals risk. This is wrong and, ironically, raises the actual risk of you losing money. — Our industry has become dangerously obsessed with volatility. What was once just a small part of good risk management has become all-consuming: Volatility data increasingly dictates investment decisions and is hardwired into products and legislation. …

Nature doesn’t just hate a vacuum, it’s not keen on concentration either. By co-ordinating our investment and economic activity around market indices, are we creating a huge too-big-to-fail problem? — In April 1831, an accident occurred that forced the British army to change its procedures. The event was unforeseeable, though hindsight makes its causes — and its simple solution — seem obvious. A company of soldiers marched on to the Broughton Suspension Bridge, which began to vibrate in unison with…

“Money isn’t important. It’s getting what you need that matters. Money is just one way of getting it.” — We’re all wrong in how we think about money. Luckily for 50 years that hasn’t mattered much. But over the last few years it’s begun to matter, and I suspect it will come to matter a lot more in future too. Then we’ll end up knowing more about what money…

The lessons to be learned from one of the UK’s fund management greats. — The above fund has a personal edge for me. Its sister fund, Stewart Investors Asia Pacific Leaders, was one of the first I inherited when I began analysing funds for Premier in 2007. …