Mutual funds are a very protected entity. They only have to reveal twice a year what their money managers are investing in, but is this fair? What reason could this information be held?

Mutual funds belong to an exclusive club. They only have to report twice a year, what they invest your money in. The right to do so by mutual funds, often leave investors wondering, putting their complete trust in their advisors and money managers. After the recent claims of companies with unreliable balance sheets, mutual fund investors need to know where their money goes.

No one is accusing mutual funds of wrong doings. However, letting people decide, whether they wish to invest in certain companies should be considered relevant. The saying "perception is everything" rings loudly in the ears of afraid investors. The disclosure of mutual fund managers investing patterns, may help investors create a better asset allocation, among their portfolio. This may convince more people to come back into the market.

Mutual fund companies can argue, that constant disclosure could cost them billions and panic among investors. When the big, mutual fund companies start to buy a particular stock, a crowd of investors may do the same. Some investors may not see the need for the diversification found in a mutual fund. They will no longer buy mutual funds out side of their retirement accounts, and "copy cat" the mutual fund trades. This is similar to what happens when Warren Buffet's stock purchases are know by the public. These stocks bought by the mutual fund companies could be wrong for an investor with a portfolio of 5 - 10 securities. Also, when the mutual fund sells a large quantity of a stock or bond, people may believe the company or municipality is about to fold. This may not necessary be the case, it could be an issue of rebalancing, or there is a time limit on the security holding period.

It is conceivably hard to find common ground between investors and mutual fund companies. Investors seek more disclosure, and maybe the mutual fund companies will try their best to compromise. Once a quarter disclosure, could be a step in the right direction.

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