How Do Mutual Funds Work? The Complete Guide to Mutual Funds

Are you a long-view investor with an interest in seeing your wealth grow over 10, 20, or 30 years? If the answer is yes, then you need a diverse portfolio of assets to help you achieve your goals.

One of these assets is a mutual fund. Mutual funds are a collection of assets grouped together according to an investment strategy and run by a fund manager. Compared to individual securities, mutual funds provide a certain level of protection against the volatility of the stock market and still deliver steady returns for investors.

How do mutual funds work? Keep reading for a quick primer.

What Are Mutual Funds?

Mutual funds are called investment baskets. Rather than being one form of security or investment on their own, mutual funds are a container for a group of different types of investments, usually stocks, bonds, or a combination of the two. However, they can contain other types of investments. The primary types of mutual funds include:

  • Equity funds
  • Bond funds
  • Balanced funds (equities and bonds)
  • Money market funds
  • Fixed-income funds

When you invest in a mutual fund, you invest in the basket of investments rather than a single stock or share. You also pool your money with all the other fund investors, which grants you access to investments that aren’t available to the average solo investor.

How Do Mutual Funds Work?

A mutual fund has a fund manager, who oversees the fund and chooses the investments found within it. The manager may choose to actively or passively manage the fund according to a set strategy or according to the manager’s whims.

Many mutual funds are increasingly passively managed because research shows that passive investments earn better returns compared to actively managed investments. It’s rare for active investment strategies to outperform the market.

How does the mutual fund make money? It depends on the type of fund you choose. When your investment earns you returns, it comes in the following forms:

  • Income earned via dividends
  • Growth in price of securities or capital gains
  • Fund share price (net asset value) grows

You’ll also pay fees for your mutual fund. These include the cost of the fund (e.g., administration and operating costs) and sales commissions. Keep in mind that these fees are typical percentages of the fund, and you’ll pay them annually. A fraction of a percent can be the equivalent of thousands of dollars.

The fees you pay depend on the structure of your fund. It pays to research the type of fund that best suits your financial goals and to compare fees between funds and fund providers.

Why Choose a Mutual Fund?

Mutual funds are increasingly popular because they offer even the novice investor something that the pros could only covet a few years ago: a diversified portfolio. Because you invest in a basket of investments, your profits and losses aren’t solely tied to one company’s performance. Diversity means you have a lower risk of losing everything if a stock performs badly.

Another reason investors of all types choose mutual funds is that they come with a fund manager. You don’t have to actively trade them or even worry about all the investments inside the basket. You pay the investor a fraction of a percent of the value of your account to worry about that for you.

By working this way, mutual funds use a high volume of transactions to reduce the cost for you as an individual investor. Rather than paying as much as $5 a transaction, you split the bill with other investors.

Are There Disadvantages of a Mutual Fund?

Mutual funds do come with disadvantages compared to other types of funds like exchange-traded funds (ETFs).

The biggest issue that investors find with mutual funds is that they can be expensive. Typically, mutual funds become very expensive with a small investment and then again at the top of the scale. Many providers offer the best rates to those with mid-size accounts.

Another issue with mutual funds is that they can be inefficient compared to ETFs. Efficiency applies both to tax efficiency and the cost of maintaining the fund vs. the returns it offers. ETFs generate fewer capital gains distributions, and they have their own way of buying and selling that triggers less taxable income. However, you may find that some passively managed mutual funds are also tax efficient if only because they generate fewer transactions.

How to Find the Right Mutual Fund

Although there’s a shortlist of widely popular mutual funds, a fund’s popularity doesn’t necessarily mean it’s right for you.

Finding the right mutual fund requires you to find a fund that meets both your financial goals and your risk tolerance as well as a philosophy that reflects your own investment philosophy.

From there, you can start to consider the costs of the fund and the management style to whittle down your list of contenders and begin investing.

Use our guide to choosing the best performing mutual funds to get started.

Are Mutual Funds Right for You?

How do mutual funds work? They pool investors’ money together in a basket of securities to provide long-term growth with some protection from market volatility.

Mutual funds are a diverse group of investment tools, but almost every investor can see some benefit in adding top-performing funds to their portfolios. The trick is to find the fund that best matches your personal goals and your investment philosophy and strategy.

Looking for more investment content? Visit our Finance archive for the latest news.

Union Bank of the Philippines appoints world-leading Data Scientist to further advance digital capabilities

Consistent with its commitment to make banking simpler and more inclusive via best-in-class digital and mobile capabilities, Union Bank of the Philippines (UnionBank) recently appointed global data science expert Dr. David Hardoon Ph. D., as the Bank’s Senior Advisor for Data and Artificial Intelligence (D & AI), reporting to President and CEO Edwin R. Bautista.

Senior Advisor for Data and Artificial Intelligence (D & AI): Dr. David Hardoon Ph. D.

The announcement was made as the Bank continues to see a surge in digital transactions among customers as a result of evolving consumer behavior amplified by the current enhanced community quarantine.  These transactions mean an increased volume of data running through the Bank’s systems which data science and AI can unlock to allow the Bank to serve its customers better.

“Leveraging Data and AI is a key driver to our next-level of digital transformation as we continue to put the customer – both individuals and businesses – at the heart of our business,” said UnionBank President and CEO Edwin Bautista in a statement.

Dr. Hardoon replaces John Januszczak, who is now focused in his role as president and CEO of UBX, UnionBank’s fintech subsidiary.

Dr. Hardoon is a graduate of Royal Halloway, the University of London with First-Class Honors B.Sc. in Computer Science and AI, and a holder of a PhD in Machine Learning from the University of Southampton School of Electronics and Computer Science United Kingdom.

Prior to his appointment at UnionBank, Dr. Hardoon was the Monetary Authority of Singapore’s (MAS, Singapore’s counterpart of the Bangko Sentral ng Pilipinas) first appointed Chief Data Officer and Head of the Data Analytics Group, and subsequently MAS’ Special Advisor on Artificial Intelligence. In these roles, he led the development of the AI strategy both for MAS and Singapore’s financial sector as well as efforts in promoting open cross-border data flow.

In addition, he led and established the ASEAN Advanced Analytics of Ernst & Young Advisory Singapore as Director of EY Data, IT Advisory Services, and co-founded Azendian Solutions Pte. Ltd., an information management and data science consultancy between 2013 and 2017. He was also Head of Analytics at SAS Institute Ltd. Singapore from 2010 to 2013.

As Senior Advisor for Data and AI, Dr. Hardoon will be working with various centers, groups, and units to reinforce data infrastructure and governance, behavior modelling, machine learning, and AI capabilities as well as applications in the Bank and its parent company Aboitiz Equity Ventures.

Aside from his role with the Bank, Dr. Hardoon is concurrently Senior Advisor for AI to Singapore’s Corrupt Investigation Practices Bureau, and Senior Advisor for Data Science to Singapore’s Central Provident Fund (CPF) Board.

Puppets on a String

Some 2,980 puppets have gathered in Beijing to applaud President Xi Jinping in an annual choreographed ritual that goes by the name of National People’s Congress (NPC) – a misnomer on at least two counts. Over the course of ten days, President Jinping and his close associates pull the strings and have their initiatives duly rubberstamped by adoring acolytes. It is, arguably, the world’s greatest non-event and showcases, if anything, China’s continued subjugation to a tiny clique of potentates.

Although it is all about people’s this or that in China, no actual people other than the aforementioned 2,980 puppets are allowed to partake in the NPC’s farcical proceedings. The scene at the Great Hall of the People is straight out of a Orwellian book or movie: hordes of identically dressed automatons, bursting into applause at just the right moment whilst the powers that be torture them mercilessly with vacuous speeches about their past, present, and future accomplishments – fictitious or otherwise.

If this is how the country that wishes to lead the world is ruled, the global outlook is grim indeed. This year, the puppets showed excitement at President Jinping’s ruthless suppression of civil liberties in Hong Kong, the last vestiges of which have now been swept aside. The ‘one nation, two systems’ myth has been exposed for what it always was: a farce.

Earlier this week, Canadian Prime Minister Justin Trudeau expressed his frustration with China’s inability to understand the meaning of both democracy and the rule of law – concepts alien to the Middle Kingdom. China has amped up the pressure on Mr Trudeau to release Meng Wanzhou, the chief financial officer of telecom giant Huawei arrested at Vancouver International Airport in December 2018 on suspicion defrauding multiple banks to hide her company’s busting of US sanctions against Iran.

To solve this potentially embarrassing issue, the Chinese government promptly arrested two Canadians and proposed a swap. To his credit, Prime Minister Trudeau has refused to reward this thuggish behaviour and insists that the courts deal with Ms Wanzhou. He has tried to explain the principle of separation of power between the legislative, judicial, and executive branches of democratic government to the Chinese – without any discernible effect. His words, repeated ad nauseam, simply do not register in Beijing where only the executive counts and all else is subordinated to it.

China attempts at convincing the world that it is right, and everybody else got it wrong, are becoming tiresome. The country bungled its response to the novel corona virus and covered up its mistakes with lies and a clampdown on what really transpired during the lockdown.

China may be a large and increasingly powerful country; it also sorely lacks the self-confidence that is required for any form of government other than an authoritarian one. China is scared of booksellers, artists, students, and thinkers in general. Its government doesn’t want people to use their brain: they should merely consume, be grateful, and shut up. That, by the way, also goes for those 2,980 string puppets assembled in Beijing.


In one sense, the economic impact of the corona pandemic is helpful to UK Prime Minister Boris Johnson: the depth and scope of the flash recession are such that any fallout from the country’s imminent departure from the European Union will seem trivial by comparison. Nobody could have foretold that Brexit’s doom component would be overshadowed by an even darker cloud.

The negotiations over a post-departure trade deal between the European Union and its wayward neighbour have also been eclipsed by the pandemic. Those talks are not progressing smoothly. A stalemate beckons with the UK possibly dropping deeper into the abyss.

There are a great many stumbling blocks but the most formidable one remains the status of Northern Ireland which is supposed to remain in the union for all practical intents and purposes with a new trade barrier emerging between the six counties and the British mainland. This is to become the EU’s external border. The 1998 Good Friday Agreement that re-established the peace in Northern Ireland precludes any checks along the border with Ireland proper.

Whilst the pandemic rages, talks between Brussels and London have been conducted by video conference with both parties now and again publicly expressing their frustration. EU Chief Negotiator Michel Barnier complained that his counterpart asks for a ‘Canada-style’ trade deal only to add a shopping list of demands to their initial request.

For their part, the British team says that the EU fails to display a measure of pragmatism, tabling demands that cross the great many red lines laid down by Prime Minister Johnson. One of those British no-no’s involves the European Court of Justice (ECJ). London does not wish to be subjected to its rulings. That seems fair enough at first glance. However, the addenda to an off-the-self barebones trade deal, such as the one requested by the UK, pries open access to the EU’s common market – the union’s most prized asset. That, the EU insists, requires ECJ oversight and adjudication of the inevitable disputes that will arise.

Whilst almost nobody was looking, the talks bogged down and a trade deal seems unlikely to emerge before the end of the transition period on 31 December. In Brussels, few seem to care. Officials are busy putting the finishing touches on a major initiative to help member states deal with the Corona Recession. Brexit is yesterday’s news. The EU has moved on. The UK may wish to do so too: it is time for that buccaneering spirit and British pluck we heard so much about to put in an appearance.

Expert comment from Warwick Business School

Warwick Business School

Commenting as Easyjet announced it would resume flights next month,

Professor Loizos Heracleous, an aviation industry expert at Warwick Business School, said:

“Airlines will face a number of challenges as they resume flights. For example, if governments require them to observe social distancing rules on planes, that would mean middle seats are left empty.

“This would reduce capacity and lead to an increase in ticket prices. According to the International Air Transport Association (IATA), prices would have to rise by 40-50 per cent, just for airlines to break even.

“The good news for airlines is that they will benefit from lower oil prices and research is already under way that may enable equipment to sniff out coronavirus before passengers board.

“Airlines have been forced to conserve cash to survive, cutting flights, reducing their workforce, and postponing capital investment. However, social habits including the urge to travel have not changed. Provided we find ways to control the virus, through testing, treatment or a vaccine, the industry should be back to pre-pandemic levels within two to three years.

“Aviation is too essential to wither. It is here to stay and the market system is resilient enough to ensure the industry thrives after this temporary setback.”

Stark Warning

Slowly and ominously, as the chronicle of a death foretold, the epicentre of the corona pandemic is moving south of the border. Today, the World Health Organisation (WHO), down but far from out, issued a stark warning that after developed countries have managed to flatten the curve and start emerging from lockdown, the virus is now spreading in poorer countries, cutting a swath through societies along class divisions.

Earlier this week, Brazil passed the United Kingdom and progressed to third place on the global corona infection ranking. Only the United States and Russia are ahead of the South American country with its underwhelmed president and overwhelmed public health services. One day after this news broke, Brazil registered the highest number of corona deaths and infections so far.

In a few weeks’ time, President Jair Bolsonaro sacked one health minister and had another one resign in disgust. The latter one, Nelson Teich, likened the federal health ministry to a ship cast adrift in a perfect storm and feared the pandemic may claim well over 150,000 lives over the next months.

Mr Teich’s predecessor, Luiz Henrique Mandetta, was summarily fired after questioning the president’s refusal to obey social distancing rules. Whilst the pandemic rages and mass graves are being dug, Brazil’s politicians – not usually standard bearers for propriety in public policy – hurl accusations at each other, losing sight of a suffering nation.

According to the country’s statistics agency, the Brazilian economy may shrink by as much as a tenth this year. The Corona Recession could herald the arrival of yet another ‘lost decade’. However, neither the health emergency nor the economic meltdown is being discussed in Brasília.

Sometimes described as a Trump on steroids, President Bolsonaro still doesn’t seem to comprehend the gravity of the situation: he declines to use a face mask, keep his distance, and refrain from ordering a national lockdown which, he says, would cripple the country’s already rickety economy.

Meanwhile, the government of Mexico admitted that it had probably underestimated the number of corona deaths by an order of magnitude. There too, the president kept hugging his adoring fans until quite recently whilst he dismissed warnings of public health officials as ‘alarmist’ scare mongering.

Absent a public information campaign, popular knowledge about the disease and its transmission is limited, leading to all sorts of wild theories. Mexican health workers report being shunned, threatened, and abused on their way to work by passers-by. Almost 50 attacks against health workers have been recorded by police.

With the sole exceptions of Chile and Uruguay, no Latin American country is equipped to handle a major public health crisis. Both political determination and proper healthcare funding are found lacking. The cost is calculated in human lives.

What Are the Types of Mutual Funds?

When one wants to build their capital, the stock market is often the first port of call. But investing in the stock market is often not worth the stress. In the worst of times, investing in stocks have bankrupted investors. 

You wish to invest your money but are frightened that you may lose it all. With the financial crises that we have collectively experienced, one is right to be hesitant.

Fortunately, there is an alternative option. Mutual funds are a great avenue for investors.

But with all the different types of mutual funds available, we cannot blame one for feeling puzzled as to which ones to invest in.

While we aren’t here to advise you, we can explain the different types of mutual funds so you can make a better decision on where to invest.

The Guide to Types of Mutual Funds

A mutual fund is a fund created when a plethora of investors put in their money in securities, bonds, money market instruments, and a variety of other assets.

This pool of money is what you would invest in. The mutual fund is controlled by a money manager who attempts to produce capital gains income for the investors.

We suggest seeking the aid of a financial consultant when deciding to invest. 

Here are the different types of mutual funds for you to consider:

1. Equity Funds

Also known as stock funds, this is the most popular type of mutual fund. Equity funds will have different subcategories. These can include subcategories based on the size of the company (large, mid-size, small) or the type of company (tech, finance, etc.)

There are also equity funds defined by their approach—this can include aggressive growth, slow growth, or income-oriented.

To choose the best equity fund, you want to look at the subcategory as well as the investment approach. For example, you may wish to invest in a technology equity fund that has aggressive growth.

2. Fixed-Income Funds

This type of mutual fund offers a set rate of return. These include government bonds and corporate bonds. The mutual fund will generate income which is how the investors earn.

The money manager usually focuses on bonds that are undervalued. They purchase these bonds and then focus on selling them to make a profit. They can be risky as one can never guarantee the outcome or value of the bonds.

There is also the issue of the interest rate risk—which means that the value of the bonds will decrease if interest rates increase. On the plus side, this type of investment usually pays higher than money market investments and certificates of deposit.

3. Index Funds

Index funds have become increasingly popular. With this option, one chooses a portfolio of stocks to invest in. These can include the S&P 500 and the Dow Jones index.

While a money manager would look at these index funds, this type of mutual funds requires a more hands-off approach. 

This type of mutual fund is targeted toward the investor on a budget. If you are a beginner to investing, you may wish to consider index funds over other types of mutual funds.

4. Money Market Funds

This type of mutual fund is also a fixed-income mutual fund. This fund focuses on high-quality debt from corporations, banks, and governments. This debt is usually short term.

These type of funds include U.S. Treasuries, commercial paper, certificates of deposit, among others. An ideal money market fund will be: low risk, will produce high yields, and will require low expenses.

These are considered to be one of the safest investments available. They are used by beginners and seasoned investors alike.

5. Balanced Funds

Balanced funds, or asset allocation funds, are a combination of fixed-income funds and equity funds. They have a fixed ratio of the two funds. For example, you may have a balanced fund that is 70% equity fund and 30% fixed-income fund.

One type of balanced fund is target-to-date which alters the ratio to favour equity funds as you get closer to your retirement.

6. Income Funds

This type of fund is intended to provide a continuous income on a regular basis.

Usually, these funds consist of government and corporate debt. The funds hold onto the bonds until they mature and produce interest. 

As they provide continuous income, they are usually targeted toward retirees, conservative investors, and can also be beneficial to beginners. But because they produce regular income, one must be aware of possible tax obligations.

7. Foreign Funds

Generally speaking, foreign funds (funds outside of your home country) can be volatile. It is imperative that if one invests in foreign funds, that adequate research is conducted on the stability of the jurisdiction.

At times, the foreign fund can be far riskier than a domestic fund. At other times, the foreign fund may be much safer than domestic funds. Make sure your money manager has adequate experience in managing foreign funds.

You should also do your research on the stability, country, and political risks of other jurisdictions.

As the economies of other nations grow, you may find that investing in a foreign fund is more lucrative than investing in Britain.

8. Speciality Funds

These are usually funds that have gained popularity among investors. There are no set criteria other than the popularity and success of these funds.

For instance, there are sector funds that target particular industries. One can select a successful fund in the technology sector, agriculture sector, or in healthcare. One should be aware of the possible volatility of a sector before investing in it.

Speciality funds can also comprise of regional funds that focus on successful mutual funds in particular regions—ranging from nations to continents (i.e., investing in Peru vs investing in South America as a whole).

Finally, we have seen a keen interest in ethical funds. These are funds for socially-responsible mutual funds such as solar energy, green energy, waste management, etc.

Build Your Portfolio

Now that you know the different types of mutual funds, you are ready to consult your financial advisor and build your portfolio.

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Smoking Gun

Don’t follow the leader. Also, please don’t smoke. The leader self-medicates whilst smokers die early. That may be true but with a caveat unearthed by scientists: the novel corona virus seems to dislike nicotine and apparently shies away from smokers. Medical authorities in China, France, the United Kingdom, the United States, and elsewhere discovered that smokers are seriously underrepresented in the pandemic’s statistics.

Crunching the numbers, it would appear that nicotine junkies are half as likely to become infected as those who quit or never took up the habit. In one study conducted by the Centers for Disease Control and Prevention (CDCs) in the US, a random sample of some 7,000 covid-19 patients turned up only about 70 smokers (1%). An estimated 14 percent of the US population has yet to kick to habit, indicating that lighting up seems to offer some form of immunity.

There is also a bout of bad news: should a smoker become infected, he or she is more likely than others to end up in intensive care and succumb to the disease.

Puzzled by their findings, scientists are looking for an explanation to this politically incorrect phenomenon. The University of Oxford got involved and its scientists now suspect that nicotine may disturb the proper functioning of the integral proteins that dwell on the cell membrane. These ‘transporter’ proteins are the vehicle of choice used by the corona virus to penetrate cells.

French scientists of the renowned Pasteur Institute hypothesise that the novel virus is locked in a competition with nicotine for the use of these transporter proteins. Following this line of reasoning, they now want to study if the use of nicotine patches may help prevent infection and/or speed up a patient’s recovery.

Expect President Donald Trump to take up smoking before long. He is already taking hydroxychloroquine against the advice of his White House physicians. The drug, originally intended for the treatment of malaria, has dangerous and possibly lethal side effects when administered without close medical supervision. Evidence of its effectiveness in fighting the corona virus has been inconclusive. Recent studies have found no indication that it helps bolster the immune system.

That doesn’t bother President Trump at all. He is a risk taker and admits to taking hydroxychloroquine in an attempt to prevent infection. He is determined to be the last man standing. Mr Trump also refuses to wear a facemask as it would detract from his presidential aura. As if.

Pound could drop even further – to $1.18 – in June: deVere CEO

The pound – this month’s worst-performing major currency – could “easily drop to $1.18” at the end of June, warns the CEO of one of the world’s largest independent financial advisory and fintech organisations.

The warnings from deVere Group’s chief executive and founder Nigel Green come as it is revealed that the British currency shed almost 4% against the U.S. dollar in May and 3% against the euro.

Mr Green comments: “The pound is this year’s third-weakest major currency – just behind the New Zealand dollar and Norwegian krone, which have done even worse.

“The pound has been battered since the Brexit referendum in 2016 and the ensuing years of political uncertainty, losing around 20% of its value since the referendum. 

“The Covid-19 crisis has been another hammer blow for sterling as it promoted a flight-to-safety and ramped-up the search for liquidity.  This situation is a win for the U.S. dollar and, in turn, a loss for the pound.”

He continues: “There are legitimate concerns that the pound has further to fall in the next few weeks.

“It could easily drop to $1.17-$1.18 by the end of June due to renewed and heightened fears of a negative shock due to a no-deal Brexit combined with the far-reaching economic fallout of the pandemic.”

Negotiations between the UK and the EU on their post-Brexit future relationship stalled on Friday with the EU’s chief negotiator Michel Barnier saying the two sides risked reaching a “stalemate.”

The British Prime Minister Boris Johnson has repeatedly threatened to walk away from the talks if insufficient progress has been made by next month’s high-level negotiations. The UK has indicated the alternative of an “Australia-style” deal, a relationship where both sides trade on basic World Trade Organization terms, similar to a no-deal Brexit.

“An even weaker pound will help to reduce people’s purchasing power and a drop in UK living standards. Weaker sterling means imports are more expensive, with rising costs being passed on to consumers,” says Mr Green.
“The fall in the pound is good for exports some claim, but it must be remembered that around 50% of UK exports rely on imported components. These will become more expensive as the pound falls in value.
“A low pound is, of course, bad news for British expats, amongst others, who receive income or pensions in sterling.
“The country’s financial services sector – which represents 6% of all economic activity – will also be adversely affected because it is built on foreign investment that puts its faith in sterling being strong.”

The deVere CEO concludes: “The pound will remain volatile, and is likely to become weaker in the next month.
“As such, it can be expected that domestic and international investors in UK assets will be seeking the available international options available to them.”


Republican Alaska state representative has apologised for likening the curbs on civic freedoms adopted in the fight against the corona virus to the treatment of Jewish people in Nazi Germany. Only after a firestorm erupted amongst his peers in the state capitol and elsewhere did Representative Ben Carpenter see the error of his ways. Mr Carpenter now says he is sorry.

Passions flare regularly in the United States where the political landscape has become so polarised that bipartisan cooperation is now almost considered an act of ideological treason. Yet, some Republicans have coalesced into an informal grouping that seeks to wrestle control of the Grand Old Party away from fellow party members and representatives who are beholden to, if nor transfixed by, President Donald Trump. Sensing that the electorate could well swing to the Democrats, they try to distance themselves and their party from the president and his accident-prone administration.

In the House, a slowly growing number of Republicans are reaching out across to aisle in order to improve their own standing and show voters that they have acted sensibly. In competitive districts, Republicans representatives are keenly aware that it takes just a few disgruntled voters to eject them from Washington.

Though major news outlets focus on gun-toting mobs of libertarians angrily voicing their disagreement with stay-in-place orders, most ordinary Americans seem unhappy with the chequered performance of President Trump whose approval rating has plummeted to barely 42 percent. The president may expect stronger headwinds going into the campaign after the undoubtedly depressing economic data of the second quarter start trickling in.

The president has, of late, turned up the rhetoric and promises to deliver a splendid 2021. He now wants voters to ignore the Corona Recession that pushed the US unemployment to a depression-era level in a few weeks’ time. President Trump is busily looking for scapegoats as well. After first blaming China, he now points to state governors as the main culprits of the economic slump. His predecessor also gets apportioned a generous share of the blame. The president’s own performance has, of course, been nothing less than great and visionary.

There are few things more damning to the legacy of a US president than being ejected from the White House after a single term in office. Jimmy Carter never quite recovered from the experience. He was done in by a major economic crisis that came with an inflation rate of 20 percent. Reaching farther back in time, Herbert Hoover (1929-1933) also disappeared under a dark cloud for his monumental mishandling of the Great Depression.

There is a precedent or two to be found for presidents failing to secure a second term after bungling the federal response to a major crisis.