Wed, September 10, 2008
Finally, I've gotten around to establishing a blog roll for web logs related to things I write about here. I'm inaugurating it with three selections and I thought I'd let my readers know a bit about each one. Read the full article
Wed, September 03, 2008
Master Limited Partnerships are complicated investments in which you share in the profits from an income-generating business. Most often these partnerships make their money in energy-related businesses. They’re publicly traded and offer certain income tax benefits. They aren’t for everyone, however. Read the full article
Fri, August 29, 2008
Last week, state regulators closed down the Columbian Bank and Trust Co. of Topeka, Kansas. It was the ninth bank failure thus far this year, and probably not the last. I've written several posts recently on FDIC insurance of bank accounts and CDs, but many investors have far more money in their retirement and brokerage accounts than they do in banks. Since FDIC doesn't cover these assets, should you be worried? Read the full article
Wed, August 06, 2008
Today’s post continuues Part 1 with a further explanation of this rapidly-growing alternative to the mutual fund.
In my initial post I explained that ETFs
- are created by financial institutions in large blocks that can be freely converted into underlying securities
- are transparent, meaning that the underlying securities are publicly disclosed on a continuous basis
- trade continuously on financial exchanges at prices that generally move closely with the underlying securities
- are generally liquid, reflecting the liquidity of the underlying securities
- are usually (but not necessarily) linked to a securities index
- tend to have low management costs
Read the full article
Tue, August 05, 2008
Several MA cities, towns, and the Mass Turnpike Authority received some investment help from Attorney General Martha Coakley recently. Although it's often assumed that institutional investors are sophisticated in their understanding of investments, the case initiated and settled by the Massachusetts AG shows that even "big" investors sometimes fail to follow one of the cardinal rules of investing: make sure you understand what you're investing in. Read the full article
Tue, July 29, 2008
In the last four years or so, there has been explosion of newly created exchange traded funds (ETFs) in the financial marketplace. What are these investment products, and how are they different from the more familiar mutual funds? Read the full article
Thu, July 17, 2008
If you have a longer-term CD that is now coming to maturity, you've probably been disappointed to discover how much interest rates have dropped since you last locked in your CD rate. What are the best options for those with short-to-medium-term cash to invest these days? Read the full article
Sat, June 28, 2008
Wall Street is licking its wounds this weekend, no doubt, after being pretty badly clawed by what is almost certainly a bear market. In the coming days you’ll see all sorts of articles offering you free advice, e.g. identifying “Bear Market Stocks You Should Buy Now,” providing lists of the mutual funds into which you should put all your money, and so forth. What should you do? Read the full article
Mon, June 02, 2008
How much do you pay each year in mutual fund fees? Investors who ignore this question stand to lose a considerable percentage of their investment returns over the long-term. Read the full article
Thu, May 29, 2008
Recently the mutual fund industry has introduced a new type of financial product targeted at Baby Boomers: income replacement funds. Fidelity has initiated several of these funds and Vanguard's versions of the same idea, known as "managed payout" funds, were rolled out earlier this month. Other companies will doubtless follow their lead; Schwab and John Hancock are reportedly working on similar products. Like any investment product, these funds will be useful for some people. Consumers should be certain that they understand these funds in order to avoid any unpleasant surprises.
Read the full article
Thu, May 22, 2008
There is a warm place in the Bostonian heart for locals who have become famous (or notorious, at least). One such was Charles Ponzi, the colorful fraud who emigrated to Boston in 1903 with a couple of dollars in his pocket and managed to become a millionaire by 1920 (before he got caught). Although he did not invent the "Ponzi Scheme," he carried it off with such flair that when it recurs — as it does fairly often — it is invariably referred to by his name.
The Associated Press reported recently that the SEC has frozen the assets of Safevest LLC and its proprietor, Jon G. Ervin of Mission Viejo, who apparently was seeking to follow in Mr. Ponzi's footsteps. Read the full article
Mon, May 19, 2008
Although hedge funds have been in the news a lot lately, the average person probably has only a vague idea what they are. A few years ago my wife asked me what a hedge fund was, and I realized that I couldn't give her a simple answer. Partly this was because there is no single answer, and partly it was because I couldn't think of a way to do it without lapsing into financial buzzwords. So this post is in honor of my wife, who gave me the idea for it. Read the full article
Fri, May 16, 2008
When I meet with a prospective client for the first time, I try to explain a little about my approach to investments. On a couple of occasions when I’ve mentioned “index mutual funds,” someone has asked me, “what’s an index?” I’m always happy to get this kind of question; such questions help me remember that not everyone on the planet is a personal finance geek (and that’s a good thing). Read the full article
Fri, May 09, 2008
The Supreme Court is considering an appeal to Kentucky versus Davis, a lawsuit that could have an impact on the state tax treatment of both municipal bonds and some state 529 plans. Read the full article
Mon, May 05, 2008
The question of whether one should use a passive investment strategy (in which you buy an entire market index) vs. an active strategy (in which you try to figure out which specific securities will outperform and invest in those) is one that can produce passionate responses. Express a strong opinion in favor of one dogma or the other in the midst of a bunch of financial types, and a brawl may ensue. Read the full article
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