Sound Mind Investing Reviews

SMI primarily recommends mutual fund investing based on a momentum formula which leads the investor to frequently buying and selling funds. This performance chasing sometime works but most of time leads to underperformance. It carries high costs and tax consequences which are costly for the investor. In addition they practice market timing, moving investors into and out of the market trying to limit downturns in the market. This has rarely played out well as no one knows the market direction. I would avoid their strategies as they are costly and have a very poor track history.

SMI has changed significantly over the years. It started as solid financial education newsletter for the DIY investor but has moved to a high cost, market timing, actively managed financial service provider. Their returns are in the bottom half of their peers and their rating by Morningstar as of Nov 2023 is as follows:

Sound Mind fails to meet industry-standard stewardship qualities, culminating in a Below Average Parent Pillar rating.

Sound Mind open-end and exchange-traded products are costlier than similarly distributed funds at other highly-rated asset managers, on average in the highest quintile of category peers. The higher expense profile contributes negatively to the firm's overall stewardship rating and creates a larger performance hurdle.

The Sound Mind roster of open-end and exchange-traded funds has had below-average risk-adjusted performance, as evidenced by its average 10-year Morningstar Rating of 2.0 stars. A sign of strength at Sound Mind is its longest-tenured management, which offers an average asset-weighted tenure of 13 years at the firm.

This accumulation of experience builds confidence that the group can navigate a variety of market environments adeptly.

SMI provides solid investing articles but their investing strategies are mainly based on actively managed market timing based approach. Their actively managed strategies have underperformed the market significantly and rely on momentum which can reverse course quickly resulting in significant loses. Sector rotation focuses on hot sectors and has decent performance but is very volatile. I found their strategies hard to employ as there is constant buying and selling of funds which also has negative tax complications.

I have been a user/investor/student of SMI for more than 30 years. They have provided me with knowledge and advice to allow accumulation of sufficient funds to retire at 53 years of age so we could do missions work in Central America.

My wife and I have become of one mind on investing, tithing, and planning. We became debt free in the early 1990's when the debt on our home was retired. We have four kids, all of which went on to to hold advanced degrees, two are physians and two have masters degrees in education.

In all fairness, we started with Larry Burkett, who put us on the road of debt freedom and we transitioned to SMI who also provided the debt free goal and the biblical counsel of handling money. Investing is a lifetime of learning and SMI has the resource material for learning for the very beginner.

Rick Mc