Investing well means going against human nature.|
So says David Snowball, of Davenport, the founder and publisher of Mutual Fund Observer, a website devoted to helping small investors that has attracted international attention.
"The problem with successful investing is that it requires you to do two unnatural things," he said. "One of the two is to defer gratification."
That means squirreling money away for later, instead of spending it on something you could be enjoying now. He said the other reason investing well goes against instinct is "you have to run toward chaos."
When the market is going down and people are screaming "Sell!" you have to buy, he said, and when it's going up and everyone is screaming "Buy!" you have to sell.
Dr. Snowball has a Ph.D. in communication studies, and is a communication studies professor at Augustana College.
Mutual Fund Observer, found at mutualfundobserver.com, has been mentioned in The Wall Street Journal, USA Today and Reuters.
U.S. Securities and Exchange Commission states mutual funds bring together money from many people and invest it in stocks, bonds or other assets.
Dr. Snowball describes the Mutual Fund Observer's mission as helping readers "make good decisions about their financial future, but not to try to make the decisions for them."
Mutual Fund Observer attracts 7,500 to 9,500 readers a month, from the United States and elsewhere.
"We have a noticeable readership in about 60 countries," Dr. Snowball said.
Dr. Snowball describes Mutual Fund Observer, which launched in spring 2011, as "the successor to a reasonably famous website named FundAlarm," which was "launched to try to give average people a fighting chance."
His start with FundAlarm began while he was serving on Augie's personnel committee. The committee was looking into the college's retirement plan, and Dr. Snowball realized he needed to know more about investing.
Dr. Snowball said he hadn't "earned an opinion about what we should do about the college's retirement, so I dutifully marched off, and began earning an opinion. Read a huge amount, and found that I needed to ask people questions."
He went online to do that, and eventually, he was confident enough to answer others' questions. FundAlarm publisher Roy Weitz took notice, and asked him to start writing for the site.
Dr. Snowball was the senior analyst for FundAlarm when Mr. Weitz decided to retire and suggested that Dr. Snowball launch his own site.
Mr. Weitz encouraged FundAlarm supporters to contact Dr. Snowball if they were interested in him starting a site. "I got 120, 130 people writing me asking for me to continue the work," he said.
Dr. Snowball decided to give it a try, and launched Mutual Fund Observer as a free, independent site.
When people use an Amazon link on the Mutual Fund Observer's site to make purchases, a percentage of the sale goes to Mutual Fund Observer. Its only other source of funding is reader contributions.
When Dr. Snowball needs higher level programming done he pays market rate, but "the site itself is largely a volunteer effort." Dr. Snowball alone spends more than 100 hours a month on the website.
Mutual Fund Observer has an active discussion board, a monthly commentary column by Dr. Snowball, two fund profiles a month, and a snapshot of funds in registration with the SEC but not yet available for purchase.
He recommends new investors start by picking a fund, setting up an automatic deduction of a small amount every month from your checking account in order to begin accumulating resources.
"Don't wait for the perfect moment, it's not coming," he said. "Don't wait for the next raise."
Dr. Snowball said there are many skilled volunteers behind the site's success. Two are technical director Cheryl "Chip" Welsch, of Cuddebackville, NY, and senior web designer Anya Zolotusky, of Arlington, Wash.
Ms. Welsch said in an email that what stands out to her about Dr. Snowball is his commitment to helping people, from new investors to seasoned professionals and small fund managers.
No matter who it is, "David so often manages to help. He also manages to make it feel personal," she said, adding he takes time to get to know members of the Mutual Fund Observer community.
"He writes his commentary to them, so that it doesn't feel dry and impersonal," she said. "It feels like a monthly chat with a good friend, where you catch up on what's been going on."
Ms. Zolotusky agreed that Dr. Snowball does a good job of making his writing personal.
"Not only is David knowledgeable about mutual funds but he has excellent judgment in discerning the substance from the marketing fluff, and his clever, light writing style makes it easy and fun for people to understand pretty complicated topics," she wrote in an email.
Dr. Snowball was a longtime debate coach at Augie, and said that while doing that, he taught people to look critically at arguments, figure out what's been said, what the evidence supports and what the implications are.
"In some ways I find this is a linear extensive of my teaching as a debate coach."
Jobs: Professor of communication studies at Augustana College, and founder and publisher at Mutual Fund Observer (mutualfundobserver.com)
Education: Ph.D. and master's degree in communications studies from the University of Massachusetts, and bachelor's degree in speech and political science from the University of Pittsburgh
Hobbies: Spending time with family, including his son, traveling, reading and cooking
Resides in: Davenport