Why on earth do investors stick with a cratering mutual fund? Syndicated columnist Chuck Jaffe speaks ill of the dearly departed Worldwide Fund from Janus [profile] to provide examples for six reasons.

In a MarketWatch column, Jaffe takes a hard look at the fund, which Janus Capital Group Inc. [profile] merged with a smaller sister offering last week.

At its peak, just before the Internet bust of 2000, the fund boasted roughly $45 billion in assets. At the time of its demise, it had only $1.9 billion.

"The fund’s performance has been so bad, you’d be hard-pressed to justify keeping your money riding with it," Jaffe writes. "Where Janus Worldwide once was a model of investing success, it’s now a cautionary tale of why you should never stick with a fund when its results turn abusive."

So why would investors stick with a floundering fund. Jaffe guesses at, and then cruelly skewers, six rationalizations.

1. "It was good to me once."

2. "I'm waiting to get back to break-even."

3. "It’s really not so bad."

4. "It has new management."

5. "I don't want to pay the taxes."

6. "It can't stay bad forever."

The rest of Jaffe's can be found at MarketWatch. 

Edited by: Tommy Fernandez


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