Come on down! You’re the next contestant on “The Fund is Right!”
When the last new “Price is Right” episode featuring long-time host Bob Barker airs this week, they won’t replace the game show with something new about mutual funds.
But they could.
Last week, in honor of Barker’s retirement, this column looked at how four classic Price is Right games could be tweaked to mutual fund contests. This week, it’s four more pricing games; to borrow from one of Barker’s past employers, investors might want to look at the truth these games hold, rather than suffering the consequences.
Easy as 1-2-3: One of the simplest Price is Right games, the contestant must put three prizes in order of increasing value to win.
In mutual funds, it’s an asset allocation game, one where the investor prioritizes their holdings to meet their risk tolerances and goals. Confronted with a simple portfolio decision – how much to put into domestic stocks, foreign stocks and bonds, for example – each investor playing must decide how much risk to take and how to build their portfolios so that they can sleep at night while still generating sufficient returns.
Magic number: On the game show, the prize on the left is cheaper than the prize on the right, and the contestant must find a number between the two in order to win.
In fund investing, the magic number is the one you must reach with savings so that you can retire comfortably. It is somewhere between the bare-bones, barely-getting-by minimum and the ideal, save-every-nickel-and-maximize-returns extreme.
Guessing at the magic number takes some work. Start by figuring out those two target numbers, which you can do by going to the website of almost any fund firm and using free calculators to estimate your needs. The next step involves looking at your own savings to see if you can achieve the minimum following your present course; if not, adjust your habits so that you’ll land in the target zone.
Side by side: On Price is Right, the contestant sees two pairs of numbers, one over the other; to win, they must place the numbers side by side in the correct sequence to create the price of the prize.
In mutual funds, this common game works kind of in reverse from the television show. It’s a side-by-side comparison of two funds to decide which one comes out on top and gets your money. The comparison can run over any number of factors, from past performance and expense ratio to ratings, rankings, manager tenure and more. One good place to play this game is using the free “Fund Compare” tool at
Now or then: The Price is Right version places six grocery items in a circle, with their prices revealed. The contestant must decide if each price is current or from a previously selected year, and must get three consecutive items correct in order to win.
In mutual funds, every investor should be equipped to play “Now or then,” but most aren’t. It involves writing down all of the conditions that factor into your decision to buy a fund. When making any new fund purchase, this should be the first thing to go into your files.
Years later, when you are considering whether the fund is worth holding, pull out the sheet and read the items aloud.
Say the fund was an above-average performer in its peer group, with a high ranking from Morningstar, a manager with a long track record and below-average costs and an asset size that made it nimble enough to do the job.
If the manager has changed, performance has lagged, assets have bloated and the fund’s performance is merely average, then you know the fund was a better buy then than it would be now.
Chuck Jaffe is senior columnist for MarketWatch. He can be reached at jaffe@marketwatch.com or at Box 70, Cohasset, MA 02025-0070.
