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A REMAKE OF THE STING; THE MODERN DAY MUTUAL FUND!
Arthur Levitt, during his tenure at the SEC, experienced many cases where the non-indexed mutual fund manager bought shares for their own accounts before the fund bought the shares. The fund’s purchases drove up the price of the stocks and the fund...
Hedge Funds: the Good, the Bad, and the Ugly
Alfred Winslow Jones started hedge funds in 1949. He was a pioneer of non-traditional investment strategies. “Non-traditional” categorizes hedge funds quite accurately. Hedge funds have the potential to make an investor quite a bit of money, but...
Is your mutual fund the right one for you?
Mutual Funds are considered to be one of the best investments one can get hands on. They're very flexible and cost-effective. An excellent investment for people with restricted knowledge, time or, money. For beginners, who might have a perplexed...
Organizing Your Finances: - Show Me MY Money: What You're Worth or * net * Worth
Organizing Your Finances: - Show Me MY Money: What You're Worth or * net * Worth by: Janet L. Hall Benjamin Franklin once said, * Time is money *. I think he wanted one to add up how much time they spent on a particular task or job and how much...
The Exclusive Club Of Large Caps
Picture one of those clubs where only the real heavyweights need apply. In the library the old aristocrats, General Motors and JP Morgan, are dozing in their leather chairs. On the terrace, a late luncheon is underway for those who have only...
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HOW THE INSIDERS HAVE STOLEN YOUR RETIREMENT: THE 401(K)!
Mutual funds were moderately successful in creating a presence in the stock market until the advent of the investment retirement account and in particular the 401(k). Corporate insiders persuaded the federal government to allow for the 401(k) in lieu of offering employees the traditional pension. When this happened the employees lost the protection of a specialized financial manager who could manage both the return and the risk of the retirement money of the worker.
This forced employees who are supposed to specialize in their work area into the field financial management with no training whatsoever. The 401(k) effectively FORCES individuals into mutual funds that as I just mentioned were notorious at the turn of the last century for defrauding the public of its savings. Ironically, these same executives had at the time, and still have, their company department of corporate attorneys. These secret departments do nothing but invent new ways for corporate insiders to suck more money out of the firm in the form of perquisites, stock options, and golden parachutes. This is the “new” form of executive stewardship over the shareholder value and employee retirement!
Why is this so tough on the employee? The 401(k) plans do not offer individual stocks only mutual funds. What a scam! Corporate executives have effectively forced you to place your retirement dollars with their cronies in the securities industry who manage these investment pools. If you could talk to someone in the 1920’s about this they would be shocked. Someone from back when these investment pools were actively fleecing the public would see this as a criminal act perpetrated by the US federal government, inside corporate executives, and mutual fund managers.
Does that mean the 401(k) is a bad deal? That depends. If your employer matches a percentage of your wages it may be a fair deal but you should only contribute only up to the matching limit. After contributing the maximum matching amount to your 401(k) then put the rest in a Roth IRA. If your 401(k) provider offers an indexed mutual fund then put your money
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into that. An indexed mutual fund uses a stock market index such as the S&P500 to guide which stocks are bought. The biggest and oldest indexed mutual fund is the Vanguard 500 (VFINX).
A computer divvies up the cash in the fund to match the index as closely as a possible. As such, there is not fund manager to sitting on your hard earned retirement savings to rip you off in bogus fees.
About the author:
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 and a Master in International Management from the prestigious American Graduate School of International Business a.k.a. Thunderbird. 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 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 was shouting out 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. He also teaches investing in Spanish and Portuguese. His free newsletter www.WalletDoctor.comis jam packed with personal finance and investment tips and advice! His course which is described in detail at www.BonanzaBase.comteaches home study stock market investment students more than an undergraduate or MBA degree in finance...how does he know? Because he is also a university finance professor!
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