 |
|
The source of the best business, financial and legal news |
|
|
||||
|
||||
|
||||
|
|
|
|
|
 | |
| |
 |
Business Informations |
|
|
|
A Safe Port For Mutual Funds But Not You!
Soft dollars, a form of legal kickback, is a sly way you can get ripped off by mutual fund managers. Full service brokers give these kickbacks to non-indexed mutual funds in the form of a "rebate" to purchase research, software, and even computer equipment. You pay for these soft dollars! In recent years, the SEC estimated that soft-dollar deals exceeded $1 billion. Typically, $1 accrues for every $1.60 of brokerage commissions paid. Congress made these kickbacks legal in 1975 when it passed the "safe harbor" law. The legislation allows fund managers to pay more in commissions than is necessary, as long as the excess comes back in the form of services or research that benefits investors. The problem is that this has created an opaque system that can be abused. In 1998, the SEC found that some money mangers were using soft dollars to pay for salaries, office rent, and even vacations! Think about this. You sweat every day at work to make a living. You buy a mutual fund to secure your retirement. Then the person who is supposedly protecting your retirement is sipping Margaritas in Cancun discussing with his or her buddies where to buy their next mansion with your retirement dollars! The second problem is that many funds are not taking advantage of cost saving efficiencies in their operations just so that they can keep the soft-dollar spigot open. Think about this as well. If you had enough money to not have to work you would spend a considerable amount of time looking for safe places with a good return for your money. You would not waste money on things your family did not want and hence did not need. Why give your money then to a mutual fund managers who could care less if they waste some of your retirement dollars; its no skin off their back! The best way to avoid these losses altogether is to restrict your purchases of mutual funds to your 401(k) and try to only buy indexed mutual funds such as the Vanguard 500 (VFINX). ABOUT THE AUTHOR: Dr. Scott Brown, Ph.D., a.k.a. "The Wallet Doctor", is a successful futures trader, real estate investor, and stock investor. Dr. Brown holds a Ph.D. in finance from the University of South Carolina. His 1998 articles in Technical Analysis of Stocks and Commodities were prophetic in predicting an impending stock market crash. He has helped many people become profitable investors by teaching them to look out over many years to spot stocks that are low and primed for rise in the new bull market. His second article met with approval by Dr. Bob Shiller of Yale University. Dr. Shiller is the economist that Alan Greenspan most highly regards who coined the term "Irrational Exuberance." In 1998 he shouted to the world to "get out" of the stock market but now he is shouting to everyone that it is time to "get in!" The Wallet Doctor is not only sought after for investment advice and coaching in stock investing but also in futures trading and real estate investing. Visit Dr. Brown's site at http://www.BonanzaBase.com or sign up for his investment tips at http://www.WalletDoctor.com
MORE RESOURCES:
investing - Google News |
|
|
|
RELATED ARTICLES
IF - The Wonders of Investing If it seems as if all investors are selling, who is buying? If trading has become entertainment for you, it may be time to refocus on profits. If your stock has reached an annual low, can it go any lower? If your stock has reached an annual high, can it go any higher? If all the television analysts jumped off a bridge, would anyone care? If your portfolio is based solely on fundamental analysis, perhaps it is time to learn technical analysis. The Myth of the Earnings Yield AbstractA very slim minority of firms distribute dividends. This truism has revolutionary implications. Investor Guide to Financial Health Step 1: Spend less than you earnPerhaps the simplest financial concept is the toughest for us to conquer- spend less than you earn. After paying your living expenses (bills, loan and mortgage payments, cost of food, charitable contributions, taxes, etc), you can begin to save and invest toward your future. Discover the Foundation of Retiring Wealthy - The IRA! Let me tell you about some legal ways to avoid getting taxed on profits from the stock market. You can make a lot of money now with the stock market as low as it is at this time as I teach you in my home study course. Investing for Retirement - Not an All or Nothing Play In 1519, Hernando Cortes, beached on the shores of unexplored Mexico, made a fateful decision: he would burn the ships he and his men arrived in and attempt to overthrow Montezuma and the mighty Aztec empire. The decision was risky. Finding False Gold in Penny Stock As far as traders go, many do not see the penny stock as a solid way to do business. Many believe that dealing with penny stock is a risky business. How To Find An Investment Advisor Do you think you need an Investment Advisor? Hold on before you answer because this is sort of a trick question. Also, I am definitely biased because I am an Investment Advisor. Can Using Sales Leaseback Method of Investment Property Acquisition Reduce Risk? Sales Leaseback compared to traditional property investmentCan a Sales Leaseback arrangement make investing in Orlando investment properties more safe and reliable?Yes. Providing a guaranteed rental amount each month is the safest and most reliable way to realize a return on your investment. Retirement is Never Urgent Until If you're like many people, your retirement savings have not been growing consistently over the years. We're not referring to the wild fluctuations in the stock market, but rather the fluctuations in our short-term needs. Wit and Wisdom on Money, Wall Street and Success - Part #2 Here are ten more WISDOM packed GEMS that ooffer very unqiue insights to the world of trading and investing.These quotes promote a philosophy which is readily understandable and sometimes hysterical. It's Not the Size of Your Bank Account You might think that if you win the lottery or get a huge raise, all your problems will be solved. Sounds logical, right? Well, it might sound logical, but it isn't. Investing Offshore for Retirement As an expatriate you are in a privileged savings and investing position. Make the most of the options available to you while you can, consider investing offshore for your retirement. Coca-Cola - A Value Stock? There has been much talk lately about Coca-Cola and its potential as a value stock - as it now spots a dividend yield of 2.6% (which is the highest dividend yield since the late 1980s) and a P/E or less than 21 - right at the bottom of its five-year low. Chile Leads the Latin Pack Everyone's talking about China. Don't miss the opportunities in the other CHI. Remembering TEOTWAWKI and Learning from It Its only been about 5 years since we had major scares in the marketplace regarding Y2K. You might recall that many computer systems were not programmed to be able to understand the change from 1999 to 2000. Stock Market Money Management Skills Let's start by saying: You can't be afraid to take a loss. The investors that are the most successful in the stock market are the people who are willing to lose money. The Arrow-Debreu Contingent Claims Model of Investment Throughout the discussion of speculation and stability, we emphasized that uncertainty theorists now have a generally accepted framework for modeling choice under uncertainty. Economic theorists have chosen to model uncertainty as the revelation of a state of the world. Trend Following Trend following also called momentum trading is the simplest and safest method of stock market investing. It puts you in stocks and mutual funds that are going up and gets you out when they start down. Six Principles of Successful Investing 1. Begin investing immediatelyProcrastination is the number one enemy of investing. Investing & Online Stock & Share Trading: Money & Risk Management - Atkinson Portfolio Planner (1) This article was originally featured in Daryl Guppy's 'Tutorials in Applied Technical Analysis', voted no 1 trading newsletter in Australia by Shares magazine & no 4 in the world by US Stocks & Commodities magazine and is reprinted here with Daryl's permission.In addition to developing sound technical analysis skills, strong trading psychology coupled with well thought-out money and risk management are also vital key secrets for success when trading or investing in the market.
|
| home | site map |
| © 2006 |
|
|
|
|
|
|
||||
|
||||
|
Comment by Frank O'Donnell
