Investor Education This Week 
FIGHTING ELDER FINANCIAL ABUSE
7/1/2009
From NASAA: The North American Securities Administrators Association (NASAA) and the National Adult Protective Services Association (NAPSA) announced they will join forces to protect seniors from the growing threat of elder financial abuse, which includes financial exploitation and securities fraud. Financial abuse is considered to be the most common form of abuse to elders, costing its victims an estimated $2.6 billion a year, according to a recent study. And for every one case of abuse reported to authorities, an estimated four or more cases go unreported. The NASAA and NAPSA partnership aims to eliminate elder financial abuse by providing tools to identify and report financial exploitation. NASAA and NAPSA will work together to inform and connect their members to share information and resources on
how they can help prevent elder abuse in their jurisdictions ...
MADOFF PAYMENTS TOP $230 MILLION
7/1/2009
From SIPC: A total of $231 million in Securities Investor Protection Corporation (SIPC) funds has been committed in the determination of 543 claims submitted by Bernard L. Madoff Investment Securities LLC (BLMIS) investors, according to Irving H. Picard, the court-appointed trustee for the liquidation of BLMIS under the Securities Investor Protection Act (SIPA), and SIPC President Stephen Harbeck. As such, the amount of SIPC funds committed in the Madoff liquidation exceeds the total amount paid in the previous 11 largest SIPA liquidations. The amount reflects major progress since May 14, 2009, when Picard and Harbeck announced a total of $61.4 million in SIPC funds committed in determination letters sent to 125 BLMIS claimants ...
RETIREE FRAUD AWARENESS
6/24/2009
From NEFE: In a volatile economy consumers are susceptible to losing money. But one of the largest and fastest growing segments of society, the retirees, are being jeopardized by another risk-financial scams, according to the National Endowment for Financial Education. Many older Americans rely on their retirement savings nest eggs to supplement Social Security. But with frequent losses in the stock market, and receiving little to no return on some investments, many retirees seek ways to get higher returns and protect the assets that took a lifetime to build. This opens the door to the financial predators lurking in the shadows. While con artists don't discriminate, perpetrators of investment and securities fraud frequently target wealthier Americans who are retired or are nearing retirement ...
PERSONAL FINANCE WORKSHOP FOR TEACHERS
6/24/2009
From CEE: The Council for Economic Education, formerly known as the National Council on Economic Education, unveiled two personal finance and economics workshops that will be held on June 26, 2009 at the American Association of Family and Consumer Sciences 100th Annual Conference and Expo in Knoxville, TN on June 25th to June 28th. During the workshops, teachers will discover invaluable tools to prepare their students for real-world financial decisions. With engaging videos, thought-provoking activities and interactive lesson plans that cover key concepts like saving, investing, credit and budgeting, teachers will explore new teaching strategies that cater to all learning styles. Teachers will leave with ready-to-use lesson plans they can use in their classroom right away ...
INFO FOR RESERVE PRIMARY FUND INVESTORS
6/17/2009
From SEC: The Securities and Exchange Commission posted information on its Web site for investors in the Reserve Primary Fund, which "broke the buck" last September when its net asset value fell below $1 per share. Since then, the fund has withheld a significant amount of money from investors pending the outcome of numerous lawsuits filed against the fund, its trustees, and other officers and directors of Reserve entities. The SEC filed suit on May 5, 2009, seeking, among other things, an order to distribute the fund's remaining assets to investors expeditiously on a pro rata basis. Pursuant to the court order, the SEC is directing investors to additional information on its Web site, including the SEC's proposed distribution plan as well as the SEC's evidence in its case against the operators of the Primary Fund ...
SUSPENDED 401(K) CONTRIBUTIONS STUDY
6/17/2009
From EBRI: A review by the nonpartisan Employee Benefit Research Institute (EBRI) of 251 401(k) plan sponsors that have suspended 401(k) matching contributions for their 4.4 million workers finds that those employing 50 percent of the workers also maintained an open defined benefit plan. An additional 16 percent of the workers were with employers that were still obligated to fund a frozen defined benefit plan. Further, 8 percent of the workers were with an employer that had both an open and a frozen defined benefit plan that carried funding obligations. Because of the current economic conditions, many of these employers must make what are unexpected contributions to a defined benefit plan as a result of asset losses and liability growth, but they can eliminate what are discretionary matching contributions to a 401(k)-type plan ...
NEW RESOURCES FOR INVESTING
6/11/2009
From BetterInvesting: In preparing for a comeback in stocks, investors now have all the stock analysis tools and education resources they need to build their portfolios and their long-term wealth. The merger of the National Association of Investors Corporation (BetterInvesting) and ICLUBcentral, the two leaders in investment education, creates the largest provider of unbiased, time-tested tools and resources. With this merger, investors of all experience levels have everything they need to analyze stocks and mutual funds and prepare for the next bull market. BetterInvesting's and ICLUBcentral's tools, resources and education programs revolve around the time-tested principles of building wealth over the long term by investing in well-managed growth companies whose stocks are selling at reasonable prices. Their investors can attest to how these products and services empower them to make sound investment decisions and successfully manage their portfolios ...
NEW FINANCIAL ED TEACHING CENTER
6/11/2009
From CEE: The Council for Economic Education and HSBC-North America have opened the HSBC National Center for Economic and Financial Education. The National Center has been created to be a hub for innovative and state-of-the-art teaching materials and programs in economic and financial education. Educational programs will be piloted and field-tested; research and evaluation of programs will be conducted; and panels featuring economic educators, teachers, prominent economists, business leaders, and policy-makers will be held to discuss topics relevant to economic and personal finance education. And as part of the National Center's mission to increase the awareness of economic education, domestic and international visitors will be invited to visit and view the National Center's broad array of financial, economic and entrepreneurial education programs ...
TARGET DATE-TYPE RETIREMENT PLANS
6/3/2009
From EBRI: The nonpartisan Employee Benefit Research Institute (EBRI) published a study of target-date fund investments, exploring whether plan demographic characteristics would affect individual participant contribution rates and target-date fund investments for participants in relation to plan demographics by considering target replacement income and its success rate. The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) and the Securities and Exchange Commission (SEC) will hold a joint public hearing on June 18, 2009, to hear testimony on the investment of 401(k) and other retirement plans in target date-type plans. The study finds empirical evidence that 401(k) plan participants' contribution rates and participants' investments in target-date funds with different equity allocations both differ by plan demographics based on participants' income and/or tenure ...
TEACHING THE TEACHERS
6/3/2009
From IPT: The Investor Protection Trust has awarded a grant to The North Dakota Securities Department for their 14th Annual Invest North Dakota Teachers Academy in July 2009, a program that provides teachers the information they need to integrate investor education into their classroom activities. The objective of the Academy is to provide K-12 educators with both the training and the curriculum resources necessary to facilitate the integration of investor education and personal finance into their classrooms. The Academy is an intense 4-day (30-hour) course that focuses on this objective through approximately 25 business, professional and educational leaders conducting training and informational sessions relative to specific topic areas. The educators also receive ready-to-use grade-specific curriculums for their classrooms, as well as many additional resources for professional and personal use ...
NEW INTEREST IN ANNUITIES
5/28/2009
From FINRA: Market events over the last nine months may have caused many investors to re-examine how their retirement funds are invested. Recent press articles and questions we have received from investors suggest that there is renewed interest in annuities as an investment vehicle. Annuities are complex financial products and it is important to understand the difference between the various types of annuities that exist and whether they are an appropriate option for you. While variable annuities can be appropriate as an investment under the right circumstances, you need to be aware of their restrictive features, understand that substantial taxes and charges may apply if you withdraw your money early, and guard against fear-inducing sales tactics. Equity-indexed annuities (EIAs) are complex financial instruments that have characteristics of both fixed and variable annuities ...
$235 MILLION MADOFF SETTLEMENT
5/28/2009
From SIPC: The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms, today applauded the nearly quarter of a billion dollar settlement reached by Optimal Investment Services (Optimal) by Irving Picard, the trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS). The $235 million settlement resolves all claims that the Trustee has against Optimal, which has agreed to pay an amount equal to 85 percent of the amount of the Trustee's original claims. To date, the Trustee has collected over $1.2 billion for victims of the Madoff fraud. As of Memorial Day, letters for commitments in excess of $116 million had been sent by the Trustee to 237 claimants in the BLMIS liquidation ...
$61 MILLION COMMITTED TO MADOFF CLAIMANTS
5/20/2009
From SIPC: Even as forensic accountants and lawyers continue to untangle what is believed to be the most complicated and far-reaching financial fraud in U.S. history, a total of $61 million of Securities Investor Protection Corporation funds already has been committed in determination letters sent to 125 claimants in the Securities Investor Protection Act (SIPA) liquidation proceeding for Bernard L. Madoff Investment Securities LLC (BLMIS), according to Irving H. Picard, the court-appointed trustee, and SIPC President Stephen Harbeck. Picard and Harbeck said that the commitment of SIPC funds is expected to reach or exceed the $100 million level by Memorial Day ...
NYSE “EXCHANGES” BLOG
5/20/2009
From NYSE Euronext: If you want to get interesting and timely information about the markets, products and services of NYSE Euronext, the world's leading exchange group, look no further. The Exchanges blog shares information and insights about cash equities, futures, options, exchange-traded products, bonds, market data, and commercial technology solutions, and allows consumers to share their thoughts. The name of the blog signals not only that it's about marketplaces but also that NYSE Euronext wants to have an open, multi-way exchange of ideas. All of the bloggers on Exchanges are employed by NYSE Euronext. The blog usually posts at least one, if not more, entries that are of interest to investors each day ...
INTEREST RATE CHANGES AND THE PRICE OF BONDS
5/13/2009
From AAII: Interest rates are heading down. Is that good or bad news for the bond investor? The answer is more complicated than many realize. Whether the interest rate movements are caused by Federal Reserve actions, economic conditions or inflation fears, the impact on the bond investor is the same. Rising interest rates reduce existing bond values and falling interest rates increase existing bond values. Seems simple enough. But because bonds differ--by maturity, coupon rate, type of issuer and other factors--figuring out how your bond or bond portfolio will be affected by interest rate changes can be complex. Fortunately, you don't need a math degree to understand the basic concepts. This American Association of Individual Investors Commentary offers some guidelines for judging the price volatility of your bonds ...
BETTERINVESTING 2009 NATIONAL CONVENTION
5/13/2009
From BetterInvesting: At the 2009 BetterInvesting National Convention, June 25-28, Westin Peachtree Plaza in Atlanta, GA, attendees will able to choose from more than 100 classes at all levels of investing sophistication, from beginner to advanced. They will have the opportunity to listen to corporate presentations, ask questions of investor relations experts, gain hands-on experience with BetterInvesting software, get software questions answered by experts, and learn about what's new at the national level. In addition, free admission is open to all on Saturday, June 27, to the Investors EXPO; participants can pick up a wealth of educational and organizational materials to take back to their clubs or to help them build a personal portfolio. To register online click here ...
TACKLING SENIOR INVESTMENT FRAUD
5/6/2009
From NASAA: The North American Securities Administrators Association has announced its strong support for the "Senior Investment Protection Act of 2009" (S. 906), legislation designed to protect senior investors from unscrupulous and unqualified financial advisers. Reports NASAA President Fred Joseph: "The use of misleading senior designations that imply expertise in the financial needs of seniors often results in unsuitable investments being sold to unsuspecting seniors." The Senior Investment Protection Act of 2009 would provide grants to states to enhance the protection of seniors from being misled by false designations. The grants would support a range of senior investor protection efforts, such as hiring staff to investigate and prosecute senior-related cases; funding new technology, equipment and training for regulators; or providing educational materials to increase awareness of designations ...
2009 NATIONAL ECONOMICS CHALLENGE
5/6/2009
From CEFE: High schools from across the country will compete in New York City in the 2009 National Economics Challenge on May 18, sponsored by the Council for Economic Education and the Goldman Sachs Foundation. Established in 2000, the Challenge is the only national economics competition for high school students. The competition honors students and teachers for their hard work and outstanding achievement, and showcases the critical need for an in-depth understanding of the subject. "In the current economic climate, the need for economic education has never been more crucial," said the CEFE President and CEO Robert Duvall. "The public recognizes that economic education for students in grades K-12 is no longer an option, it is a necessity"...
STOP ONLINE BROKERAGE ID THEFT
4/29/2009
From SEC: Let's hope this never happens to you: You go online to check your brokerage account information. You see several wire transfers of money from your account to an outside checking account. But you never authorized those transactions--instead, an identity thief did, and that thief has now stolen your cash as well as your personal information. If you don't take steps to protect your personal information when you go online, you could be telling your own sad story of identity theft. Some safeguards the Securities and Exchange Commission urges online investors to employ: beef up your security; use a security token (if available); be careful what you download; use your own computer; don't respond to emails requesting personal information; be smart about your password; log out completely; and use extra caution with wireless connections--wireless networks may not provide as much security as wired Internet connections ...
COMING SOON: CARBON INVESTING REGULATION
4/29/2009
From CFTC: Even before legislation to address global warming has passed the U.S. Congress, government regulators are preparing for what could be the largest commodity market ever: carbon trading. The U.S. Congress is expected to consider in the very near future climate change and energy legislation centered around a cap-and-trade system that would reduce American greenhouse gas emissions by 2020 and even more by 2050. "Regulation of these important environmental markets is something we need to get right," said Commodity Futures Trading Commission Commissioner Bart Chilton, who chairs an advisory committee addressing the issue. The CFTC regulates futures markets and is expected to monitor and oversee the trading of derivative products associated with carbon dioxide allowances. "The mission, mandate and membership of the [CFTC's Energy and Environmental Markets Advisory Committee] is being expanded to ensure that we are ready for what could be a $2 trillion market in the future" ...
SHAREHOLDERS--KNOW YOUR RIGHTS
4/21/2009
From CFA Institute: The CFA Institute Centre for Financial Market Integrity, the global policy authority on professional conduct and investment performance standards, financial reporting, and capital markets, has launched Shareowner Rights across the Markets: A Manual for Investors to assist investors in understanding their rights in 22 of the largest markets in the world and to reinforce the correlation between strong shareowner rights and lower costs of equity capital. "Especially in the current financial market turmoil, many investors seek diversification of risk and return opportunities by investing outside of their home markets," said Kurt Schacht, CFA, managing director of the CFA Institute Centre. "Anyone who invests internationally will find this manual useful because, with each country, we looked at a standard set of investor concerns such as the election and independence of board members, proxy voting procedures, share ownership limitations, lawsuits, and compensation" ...
UNDERSTANDING ADRs
4/21/2009
From AAII: "Direct Purchase Plans: The Foreign Option" discusses the benefits of American depositary receipts (ADRs). With current growth rates in many international markets outpacing growth in the U.S., many individual investors are casting a longing look at the foreign markets. Mutual funds that invest overseas are one approach to foreign diversification. But for investors who want to purchase individual foreign stocks, ADRs offer an alternative. An ADR is a negotiable certificate that trades like a common stock; it is issued by a U.S. bank and represents shares of a non-U.S. publicly traded company. They are priced in U.S. dollars and owners avoid many costs associated with direct foreign investment. To help fuel interest in their ADR offerings, several banks have set up investor-friendly direct purchase plans (DPPs). As international returns have recently beaten the U.S. markets, DPPs have grown in popularity, and the banks have increased their number of company offerings ...
HOW TO AVOID FORECLOSURE SCAMS
4/15/2009
From the Fed: In the Federal Reserve Board's ongoing series of consumer tips, "5 Tips to Avoiding Foreclosure Scams" is the latest offering. The guidance for working with foreclosure counselors is this in a nutshell: work only with a nonprofit, HUD-approved counselor and verify the operator's credentials with HUD; don't pay an arm and a leg--you should not have to pay hundreds (or thousands) of dollars or pay any upfront fees; be wary of "guarantees"; remember that a reputable counselor will never give guarantees; know what you are signing--and be sure you sign it; and don't forget that if it sounds too good to be true, it probably is ...
MONEY SMART WEEK IN CHICAGO
4/15/2009
From NFA: The National Futures Association will participate in two events in Chicago associated with Money Smart Week (April 18-25), which will include more than 450 free educational classes, seminars and activities that will focus on financial topics for people of all walks of life. On April 21, NFA and AARP will cosponsor a seminar to advise people on making ends meet during the current economic downturn and how to avoid becoming a victim of investment fraud. NFA will join several other regulatory and enforcement agencies on April 22 at a Financial Regulators Fair, where representatives from 10 agencies, including the FINRA, SEC and FDIC, will distribute information on financial protection, banking, credit and investing. Click here for more information on these and other Money Smart Week events ...
FINANCIAL ED FOR COEDS
4/8/2009
From NEFE: Partnering with the National Direct Student Loan Coalition, the National Endowment for Financial Education is taking action against the lack of financial knowledge in college students by promoting CashCourse to its members. CashCourse, NEFE's unbiased and noncommercial online financial education resource for students, is available free to all public and private nonprofit colleges and universities in the U.S. Students need financial tools for their transition to adulthood, including saving, investing, taxes and evaluating the financial aspects of job offers. Increasing concern over this issue has led to the joint effort between NEFE, organizations and universities to fill in the missing gaps of financial knowledge that many college students have. "CashCourse offers a reliable resource to help young adults develop financial know-how," said Ted Beck, president and CEO of NEFE" ...
FINANCING YOUR HEALTH CARE
4/8/2009
From EBRI: Employers have long sought ways to stem rising health care costs. Some are using a relatively new idea--consumer-directed health plans, which link high-deductible plans with tax-favored accounts. The Employee Benefit Research Institute has published the findings of a recent policy forum, "Outlook for Consumer/Patient Engagement in Health Care--30 Years into the Experiment." Forum participants heard two very different presentations on the prospects for consumer-directed plans. One speaker said that consumer-directed plans work because people have substituted less expensive care for more expensive care to minimize out-of-pocket costs. Another was skeptical, saying their impact will be "marginal" ...
MONEYTRACK TV IS BACK
4/1/2009
From IPT: MoneyTrack, the public television series that empowers people of all income levels to be savvy stewards of their money, is back. An updated round of the weekly half-hour series will be released during April 2009. Four of the 15 episodes are being updated to reflect current economic conditions, making the series more timely and valuable than ever. The updates will address the changes on Wall Street in recent months, and a cautionary story about high-risk real estate investment. MoneyTrack has aired on more than 200 public television stations. The secret of the series' success? Refreshingly free of bewildering jargon and dry-as-dust lectures by talking heads, MoneyTrack presents information in a down-to-earth, often humorous way that appeals to viewers who might normally find themselves intimidated or bored by a television show about finance and investment. MoneyTrack is funded entirely through a grant from the Investor Protection Trust ...
UNTANGLING COMPANY REPORTS
4/1/2009
From FINRA: As most investors already know, the annual reports of U.S. companies are becoming increasingly complex. One factor: an increase in required disclosures that accompany financial reports as the reason for the upsurge in difficulty when deciphering a company's performance. FINRA recently tracked the information used by more than 300 investors to examine how they cope with such complex information. In the article, "Where do Investors Prefer to Find Nonfinancial Information?" the authors look at some key questions: How much of the information in an annual report do investors use to make decisions? How do investment professionals (financial analysts) differ from nonprofessional (retail) investors? If they can choose where to find specific types of information (i.e., in the footnotes or other sections), what do they prefer? ...
THE TAO OF RETIRING
3/25/2009
From AAII: The dream of a happy retirement is the very reason why so many of us are willing to spend the time required to learn the ins and outs of investing. The American Association of Individual Investors has published the article "Retirement Planning: Myths and Misconceptions About Life in Retirement," which suggests achieving that dream by avoiding the pitfalls embodied in the many prevalent myths about retirement that persist. The article details 12 myths; here are a few: The Female Exclusion Myth--homemakers often have a more difficult voyage than those who retire from a job. The Money Will Go Further Myth--retirement dollars do not stretch any further than pre-retirement ones, and there are usually fewer of them. The Piece of Cake Myth--many seem to feel retirement will take care of itself. The opposite is often true. For example, many retirees go back to work because they cannot handle leisure time ...
TAX TIME TIPS FOR INVESTORS
3/25/2009
From BetterInvesting: Just in time for April 15th - some helpful tax tips! Taxpayers and businesses spend 7.6 billion hours every year to file. That's the equivalent of 3.8 million people working full time for a year. And that doesn't even count time spent responding to IRS notices and audits. A simpler U.S. tax code probably isn't in the cards, but with some planning and perseverance--whether you're racing to the finish this year or already starting to plan for April 15, 2010--you can still reduce the time needed to prepare your return. BetterInvesting's tax-time tips include suggestions for organizing tax documents to save time, ways to create a folder system, ideas for making a document checklist, and tips for dealing with canceled debt ...
BEAR MARKET AND YOUR 401(k)
3/18/2009
From EBRI: The Employee Benefit Research Institute has published, "The Impact of the Recent Financial Crisis on 401(k) Account Balances"--using a database of 21 million participants--of the impact of the recent financial crisis on 401(k) retirement balances January 2008-January 2009. Losses were largely determined by account balance, age, and job tenure. Some key points: balance--accounts with a less-than $10,000 balance saw an average growth of 40%, those with $200,000 or more, an average loss of more than 25%; age/job tenure--401(k) participants near retirement had average changes from a positive 1 percent for short-tenure individuals to more than a 25% loss for those with long tenure (more than 20 years) ...
SPOT THE CON ARTIST
3/18/2009
From FINRA: To help investors spot fraud, the Financial Industry Regulatory Authority offers an alert and two online tools. "Avoiding Investment Scams," explains common frauds, including Ponzi schemes, pump-and-dumps, and offshore scams. It lays bare the psychological tactics fraudsters use to lure victims. The tools, the Scam Meter and Risk Meter, help investors evaluate offerings and determine if their personality makes them vulnerable to fraud. "Recent frauds have robbed victims of their life savings," said John Gannon, president of the FINRA Investor Education Foundation. "These tools can help investors shut the door on con artists who come knocking." The alert also outlines a series of red flag warnings, that should arouse investors' suspicions...
PLAY “DOUGH” ECONOMICS
3/11/2009
From CEE: Will the Three Little Pigs get swept up in the foreclosure crisis? Defending their homes against the Big Bad Wolf wasn't tough enough-now they have to battle a credit crunch? To help California K-12 teachers cover the current economic crisis in their classrooms, the Council for Economic Education conducted a series of teacher workshops in early March. Teachers discovered how Play Dough can transform mundane concepts like opportunity cost, money, and bartering into exciting clay creations. Second, teachers analyzed how the Three Little Pigs learned the value of natural resources and the meaning of scarcity as they each built their homes. This combination of children's literature and sculpting clay gives teachers an array of resources that make introducing economics to young students both fun and engaging ...
TIPS FOR SHAKY HOMEOWNERS
3/11/2009
From the Fed: The unstable economy has many Americans living in fear of the loss of their most valuable financial asset--their home. To empower homeowners feeling the effects of the housing crises, the Federal Reserve Board's Web site offers useful consumer information for those in danger of falling behind on their mortgages. In "5 Tips for Protecting Your Home from Foreclosure", consumers can access a wide range of links to helpful resources, including counseling services, reliable loan and selling information, and scam alerts. The five tips in a nutshell--don't ignore your mortgage problem, do your homework before you talk to your lender or housing counselor, know your options, stick to your plan, and beware of foreclosure rescue scams ...
SALUTE TO SMART INVESTING
3/4/2009
From IPI: Created as a resource for the men and women serving in our Armed Forces and their families, "A Salute to Smart Investing" explains in clear language the basics of financial security, including saving and investing, while also helping them to identify and avoid investment frauds and other scams that specifically target the military and their loved ones. The Investor Protection Trust is helping to distribute this useful booklet by highlighting it on the IPI Web site. Key topics covered in this 17-page booklet include: basic training in personal finance, saving, investing basics and strategies, appropriate investments, balancing risk and return, retirement planning, scams and how to avoid them. "A Salute to Smart Investing" also provides contact information for federal and state agencies, military resources, and other organizations that Armed Forces personnel and their family members can turn to for financial information and guidance ...
FOR SHOPAHOLICS, ONLINE RESOURCES ABOUND
3/4/2009
From NEFE: The popularity of the recent film, Confessions of a Shopaholic, may cause retail-obsessed viewers to reflect on their own excessive spending habits. Online resources can help. It's time for a little anti-retail therapy. Shall we confess? One outlet is Spendster.org, from the National Endowment of Financial Education. This site lets visitors confess their own shopaholic tendencies, including overspending on gym equipment, vehicles, beauty supplies and way too much Diet Coke™. What motivates overspenders to air their dirty laundry online? Does a confession--albeit an anonymous one--help? The short answer is yes. With the sluggish economy and rising unemployment, buyer's remorse is on the rise. For those shopaholics who just need to vent, there are the one-off, self-disclosure sites like Spendster.org or personal notes on Facebook or MySpace. For the seriously debt-ridden, the Web is full of budgeting articles and financial tools on sites such as SmartAboutMoney.org, Geezeo.com, and Wesabe.com. But what if you really, truly have a shopping problem? Go here to discover the warning signs of compulsive shopping and tips that will help cure retail binges and hangovers ...
PENSION PLANS ON THE WANE
2/25/2009
From EBRI: A new study by Employee Benefit Research Institute shows that workers increasingly see defined contribution plans (401(k)-type) as their primary retirement plan type, with about two-thirds of workers identifying these as their most important plan. As defined contribution plans have become more important-and as defined benefit (pension) plans continue to fade in the private sector-workers' contributions to these plans are likely to need to grow even faster if they expect to be able to afford to maintain their current lifestyle in retirement, writes Craig Copeland, EBRI senior research associate and author of the study, which appears in the February 2009 EBRI Notes. Among the study's key points: 67.1 percent of retirement-plan participants had a defined contribution plan as their primary plan in 2006, more than double the level found in 1988; 30.9 percent in 2006 had a defined benefit retirement plan as their primary plan: substantially lower than the 56.7 percent level found in 1988 ...
AVOID FRAUD, PROTECT WEALTH
2/25/2009
From NASAA: The North American Securities Administrators Association has joined America Saves Week to encourage investors not only to save but also to protect their assets through fraud prevention. NASAA calls on investors to participate in America Saves Week events to discover how they can save, invest and, most importantly, safeguard their assets from investment fraud. NASAA recommends these investment fraud prevention tips for savers: verify before you buy. If it sounds too good to be true, it probably is; check out the license and background of anyone selling investments; take your time -- don't give in to high-pressure sales tactics; and if you've been a victim of fraud, contact your state securities regulator ...
AVOIDING SCAMS, EN ESPAÑOL
2/19/2009
From NFA: National Futures Association now offers a Spanish-language version of its investor education booklet, "Scams and Swindles: An Educational Guide to Avoiding Investment Fraud." It describes common characteristics of investment scams and outlines steps for avoiding them. "Unfortunately, investment fraud can occur in every community," says NFA's Senior Vice President of Strategic Planning and Communications Karen Wuertz. "We are pleased to provide this very important information in a format that will reach a wider population." Single copies of both the English and Spanish versions of "Scams and Swindles" are free. To view and print the publication, download it from NFA's Web site. NFA offers several other publications, including "Opportunity and Risk: An Educational Guide to Trading Futures and Options on Futures" and "Trading in the Off-Exchange Foreign Currency Markets: What Investors Need to Know"...
IN TOUGH TIMES, INFO IS POWER
2/19/2009
From the FTC: This year's National Consumer Protection Week-sponsored by the Federal Trade Commission and a variety of government agencies and national consumer groups-features as its theme "Nuts and Bolts: Tools for Today's Economy." The National Consumer Protection Week Web site has information to help consumers manage their money wisely and protect themselves against fraud. Whether consumers are trying to stretch their paychecks, find a quick fix for a spotty credit history, or tell the difference between a real deal and a potentially fraudulent product or service, information is one tool that can always help them get the most for their money. Practical information is one tool that retains its value, especially in tough economic times ...
THE ABCs OF CDs
2/11/2009
From AAII : A certificate of deposit (CD) is an interest-paying savings vehicle. A CD has a stated maturity date, a specified interest rate and can be issued in any denomination by commercial banks, thrifts and credit unions. A certificate of deposit is a promissory note issued by a bank, thrift institution or credit union. It is a time deposit, meaning the institution keeps your money for the stated time and you are restricted (in the form of a penalty) from accessing the money prior to the maturity date. If you must access the money before maturity, you will pay a penalty, which will eat into your total return. A typical CD can be purchased for any amount and has a number of time period options. The most popular are between three months and five years. Usually, a longer holding period means a higher interest rate. CDs are insured by the FDIC up to $100,000 ...
MILLIONS RETURNED TO INVESTORS
2/11/2009
From the SEC : The Securities and Exchange Commission announced that it has completed the first in a series of disbursements from fund that will
return approximately $321 million to more than two million investors who were harmed by undisclosed market timing in the Alliance mutual funds complex. The Fair Fund resulted from an SEC enforcement action charging Alliance Capital Management, L.P. with unlawful conduct for allowing widespread market timing trading between January 2001 and September 2003 in Alliance mutual funds, contrary to those funds' public disclosures. During this period, Alliance Capital, now known as AllianceBernstein, L.P., served as the investment adviser to the Alliance mutual funds. More than $46 million in Fair Funds have been distributed to approximately 300,000 investors in this first disbursement ...
UNDERSTANDING EXCHANGE TRADED NOTES
2/4/2009
From NYSE Euronext: An Exchange Traded Note (ETN) is a relatively new type of investment vehicle that is unfamiliar to many investors. Before you decide to invest, there are some basic questions which you should consider in order to make an informed investment decision. An Exchange Traded Note (ETN) is a common name for a senior unsecured debt obligation designed to track the total return of an underlying market index or other benchmark, minus investor fees. The creditworthiness of an ETN is itself not rated, but instead is based on the creditworthiness of the issuer. Individual investors, not qualified for redemption election, can purchase or sell their ETNs in the secondary market, sell at a specified issuer call event, or allow them to mature. ETNs can offer investment exposure to market sectors and asset classes that may be difficult to achieve in a cost-effective way with other types of investments ...
WORKSHOPS FOR MICHIGAN TEACHERS
2/4/2009
From CEE: The Council for Economic Education (formerly known as the National Council on Economic Education) announced its lineup of workshops for Michigan teachers, who will explore a variety of print- and technology-based lesson plans that help them teach economics and personal finance. The workshops will be held at the Annual Michigan Conference for the Social Studies at the Grand Amway Hotel in Grand Rapids, Michigan, on Monday, February 9th, 2009. Not only will teachers discover the latest teaching strategies, they will also leave with ready-to-use lesson plans and activities that help them bring a real-world perspective to today's economic turmoil. "After these workshops, Michigan teachers will have the tools they need to align their curriculum to the Grade Level Content Expectations and High School Content Expectations," says Troy D. White, the Council for Economic Education's director of Product Marketing and Sales ...
RETIREMENT ACCOUNT ROLLOVERS INCREASE
1/28/2009
From EBRI: An increasing percentage of retirement plan participants are preserving their retirement assets in tax qualified accounts, but a significant number are using at least some these assets to pay off debts, start a business, or buy a home, according to a study released today by the nonpartisan Employee Benefit Research Institute (EBRI). According to the study, "Lump-Sum Distributions at Job Change" (available at www.ebri.org), the percentage of those rolling over their most recent lump-sum distribution to another tax-qualified retirement plan, thus preserving the assets for retirement, increased to 44.3 percent through 2006, compared with 19.3 percent of those who received their most recent distribution through 1993 ...
SMART INVESTING@YOUR LIBRARY
1/28/2009
From FINRA: The Financial Industry Regulatory Authority Investor Education Foundation and the American Library Association (ALA) have announced nearly $882,000 in grants to 12 recipients as a part of the Smart investing@your library® initiative, which funds library efforts to provide millions of patrons with effective, unbiased financial education resources. The latest group of grantees marks the second year of this educational partnership, which awarded more than $853,000 to 13 public libraries and library networks in 2008. Grant recipients will use the funds to implement a variety of programs and create resources designed to increase patrons' access to and understanding of financial information. The grantees will partner with community organizations including schools, universities, community centers and local governments. Library patrons will be empowered to make smart financial decisions for both long-term investing and day-to-day money matters ...
FINANCIAL ED FOR INDIANA TEENS
1/21/2009
From NEFE: As the state and nation face a gloomy economic outlook, hundreds of teachers in Indiana have hit the classroom to ensure their students will not have to learn about personal finance from the school of hard knocks. "Indiana and America face critical economic challenges, challenges not seen in generations. We owe it to the next generation to prepare them, to teach them fundamental financial and life skills," says Indiana Secretary of State Todd Rokita in a public service announcement launching statewide today that promotes financial literacy for teenagers. The PSA was produced through a grant from the Indiana Department of Financial Institutions to support the Colorado-based National Endowment for Financial Education and its effort to place its High School Financial Planning Program (HSFPP) in more Indiana high schools. The seven-unit personal finance course covers savings, investing and spending. It is available free of charge to any high school or home schooling group ...
SENIORS/MILITARY INVESTOR ED
1/21/2009
From FINRA: The FINRA Investor Education Foundation devoted significant resources in 2008 to helping two vulnerable and often under-served groups weather the current financial and economic crisis - the nation's seniors and U.S. military service personnel. The FINRA Foundation launched a campaign last April in Florida and Washington State to help seniors identify and resist persuasion tactics common to many types of fraud. The centerpiece of the Foundation's campaign to protect seniors is a 90-minute intensive workshop "Outsmarting Investment Fraud." The FINRA Foundation conducted 21 financial education forums in 2008 at military installations across the country. The Foundation awarded 189 military spouses with fellowships to fund the education necessary to earn the Accredited Financial Counselor designation and to provide financial counseling and education within the military community. The Foundation has also made BrightScore, an online credit management tool, available free of charge to over 45,000 active duty military personnel and their spouses to help them manage their credit wisely ...
TIPS TO AVOID DISHONEST FINANCIAL ADVISERS
1/14/2009
From NASAA: The North American Securities Administrators Association (NASAA) is offering investors a series of tips to avoid dishonest investment services providers in the wake of the unfolding scandal in which scores of investors lost upward of $50 billion after a New York money management firm tumbled like a house of cards. "While the vast majority of investment services providers are honest professionals, the potential for fraud should concern us all," said NASAA President and Colorado Securities Commissioner Fred Joseph. With more people in charge of their own investment portfolios than ever before, state securities officials are warning investors of the increasing sophistication of investment professionals who steal money from unsuspecting clients. "Anyone, regardless of income, education, or profession, can become a victim when unscrupulous individuals use the growing field of financial advice to line their own pockets," Joseph said. Joseph recommended investors consider five tips to help protect themselves from dishonest advisers ...
SUSTAINABLE RETIREMENT
1/14/2009
From FPA: When voluntary or involuntary retirement arrives, many retirees find that they don't have enough money in their nest egg to sustain their current standard of living. But instead of drastically cutting back expenses, retirees can salvage their retirement by working part time and annuitizing a portion of their portfolio, says an article in the January 2009 issue of the Journal of Financial Planning, published monthly by the Financial Planning Association. In an earlier published paper, Gordon B. Pye, Ph.D., a financial consultant and planner in New York City, explored the problem of people reaching retirement but finding that withdrawing only what is typically considered a "safe," sustainable amount will leave them well short of their living expenses. But Pye found that by using a "retrenchment rule" retirees could postpone a painful reduction and withdraw a significantly higher percentage of the account's value, at least during the early years. Nevertheless, the strategy still runs an uncomfortable risk of having to take very low withdrawals later in retirement. So what can retirees do to reduce that risk of severe retrenchment? ...
MAJOR INVESTOR EDUCATION CONFERENCE PLANNED
1/8/2009
From FINRA/SIFMA/IPT: In the wake of the recent market downturn and tightening of credit, the work of investor education professionals is more important today than ever before. Investor education will be critical to restoring confidence in markets and in helping investors develop a long-term perspective about the benefits of investing. The International Forum for Investor Education (IFIE) and the International Organization of Securities Commissions (IOSCO) have organized an investor education conference taking place 2-3 March 2009 in Washington, D.C. Several members of the Alliance for Investor Education -- including FINRA, SIFMA, and IPT - are involved in the IFIE/IOSCO event ...
AMERICAN SAVER ASSETS
1/8/2009
From ICI: American savers held $16.9 trillion in retirement assets at the end of the second quarter of 2008, accounting for nearly 36 percent of all household financial assets in the United States, the Investment Company Institute reported. The finding is from The U.S. Retirement Market, Second Quarter 2008. The report covers assets held in private-sector pension plans, both defined benefit and defined contribution; government pension plans; annuities; and Individual Retirement Accounts (IRAs). Between March 31, 2008 and June 30, 2008, retirement assets remained largely unchanged from a revised finding of $16.9 trillion in the first quarter. During the second quarter, total return on equities was -2.7 percent, while bonds returned -1.2 percent, according to the Standard & Poor's 500 stock index and the Citigroup Broad Investment Grade Bond Index. At the end of the second quarter, IRAs held $4.5 trillion of retirement market assets; another $4.3 trillion was held in employer-sponsored defined contribution plans, of which $2.9 trillion was held in 401(k) plans. Mutual funds managed 47 percent of IRA assets and 51 percent of defined contribution plan assets ...
IDENTITY THEFT WARNING UPDATED
12/30/2008
From Federal Reserve: The federal bank, credit union, and thrift regulatory agencies announced publication of a revised identity theft brochure--You Have the Power to Stop Identity Theft--to assist consumers in preventing and resolving identity theft. The updated brochure focuses primarily on Internet "phishing" by describing how phishing works, offering ways to protect against identity theft, and detailing steps to follow for victims of identity theft. The brochure includes contact information for three major credit bureaus, where to report suspicious e-mails, and where to access additional information. The brochure is attached and is available to download from the websites of the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, National Credit Union Administration, and Office of Thrift Supervision. The brochure includes important tips for investors, such as: never provide personal financial information, over the phone or the Internet, if you did not initiate the contact ...
HEDGE ETHICS CODE
12/30/2008
From CFA Institute: Kurt Schacht, CFA, managing director of the CFA Institute Centre made the following statement: "For all their panache in recent years, many hedge funds have had a rough road in 2008. The Madoff scandal drives home the point investors should never settle for perceived strength. The CFA Institute Centre has long called for a hedge fund industry code of conduct. That is why we created the Asset Manager Code of Professional Conduct and have been working with the industry to develop several sets of best practices and ensure appropriate regulation." Schacht added: "Investors are tired of hearing the hedge fund industry say they have plenty of best practices and regulation and then feel the brunt of ethical misconduct." The Asset Manager Code requires full adoption for hedge fund firms to claim compliance in marketing and other client communications ...
FINANCIAL EDUCATION FOR THE MILITARY
12/23/2008
From FINRA: John Gannon, president of the FINRA Investor Education Foundation, told Military Money Radio in a recent interview that the financial confidence of military servicemembers and their families is his organization's Number #1 priority. The FINRA Foundation is providing military families with the tools and education they need to stay financially sound by avoiding debt and credit problems and staying away from predatory lenders. "Financial readiness is very important in today's economy," Gannon said. "We can give servicemembers high-quality, easily accessible information and tools that can help them understand the basic principles of money management, saving and investing." The Foundation strongly believes in these efforts to support our nation's men and women in uniform. The financial education information and tools are available on the Foundation's Web site for military families, www.SaveAndInvest.org/military. The Foundation has also produced an online learning tool, a game called "Moneytopia" in which military service members can learn key aspects of personal finance in a fun and interesting way ...
401(k) INVESTORS STAY THE COURSE
12/23/2008
From ICI: Most of the millions of American workers who invest for retirement through a 401(k) plan are staying the course through tumultuous markets and want to preserve the fundamental strengths of this retirement plan, according to new research released by the Investment Company Institute. "Workers want to keep the basic strengths of 401(k)s--tax-favored savings, individual choice in investing, and personal control of these retirement assets," Paul Schott Stevens, ICI president and CEO, told a Newsmakers forum at the National Press Club in Washington. In his speech, Stevens laid out a comprehensive retirement agenda for the new Administration and Congress, including putting Social Security on a sound financial footing and bringing needed reforms to coverage, disclosure, and investor education in 401(k)s and similar employer-based retirement plans. In a survey of records for 22.5 million participant accounts, ICI found that, despite the decline in account balances caused by the 40 percent drop in U.S. stock markets, the vast majority of savers are staying put ...
NEW BOND INVESTOR SITE LAUNCHED
12/18/2008
From SIFMA: A groundbreaking new financial Web site called InvestinginbondsEurope.org, which offers retail investors free access to comprehensive, non-commercial and unbiased education, was just launched. The site is the first of its kind providing fixed income market information in English, German, French, Italian and Spanish in a pan-European context. The site covers a range of comprehensive, easy-to-use educational topics such as "Bond Basics," "Types of Bonds," and "Investor's Checklist" to help visitors learn about bonds. It also provides market-at-a-glance data, end of day price information for selected bonds, indices, economic indicators, benchmark rates, news, in depth analysis, calculators, a glossary, commentaries and a resource centre. InvestinginbondsEurope.org is designed to deliver non-commercial, unbiased educational basics about bonds and the transparency that comes with clear and relevant information. Data provided by the site focuses on the European government, sub-sovereign, corporate and collateralised bond markets ...
INTEREST RATES & BOND VALUES
12/18/2008
From AAII: Whether the interest rate movements are caused by Federal Reserve actions, economic conditions or inflation fears, the impact on the bond investor is the same: Rising interest rates reduce existing bond values and falling interest rates increase existing bond values. Seems simple enough. But how will your bond investments be affected by changes in interest rates? Since bonds differ by maturity, coupon rate, type of issuer and other factors, figuring out how your bond or bond portfolio will be affected by interest rate changes can be complex. Fortunately, you do not need a math degree to understand the basic concepts. Here are some simple guidelines for judging the price volatility of your bonds. The price that a bond sells for in the market today is the sum of all future cash flows, discounted in value because they are not available today. A dollar tomorrow is worth less to you than a dollar today. The discount rate used is the rate of interest prevailing in the market for bonds of the same risk and maturity. When that interest rate changes, it affects the price of all bonds, but to varying degrees. The longer the maturity of your bond investments, the greater the price volatility ...
FIVE THINGS TO RESIST
12/10/2008
From NEFE: Thanks to the recent stock and bond market roller coaster ride, you might be thinking about borrowing against your home or withdrawing money from your 401(k) while you "ride out the storm." While it is never a bad idea to re-examine and rebalance your budget and portfolio, now is not the time for hasty decisions. In fact, now is the time to be even more cautious. NEFE says there are five main things to resist doing in an erratic economy. First, don't borrow money to continue your current lifestyle. Second, avoid pulling out funds or taking a loan from your 401(k), and continue making contributions into it. Third, even if you're tempted by low interest rates, avoid borrowing against your home equity to fund current expenses. Fourth, when the going gets tough, the tough turn to retail therapy and that is not a good philosophy in uncertain economic times. Fifth, avoid turning to credit for unexpected expenses while you have savings in the bank ...
FINANCIAL SERVICES ROUNDTABLE WEBCAST
12/10/2008
From NASAA: The North American Securities Administrators Association, Inc. (NASAA) announced that its upcoming public roundtable on financial services regulatory reform, being held December 11, 2008, will be Webcast live on the Internet. The roundtable will feature a delegation of state securities regulators coming to Washington to offer the incoming Obama Administration and the 111th Congress a Main Street agenda for Wall Street reform as part of the ongoing policy debate over the future of the nation's financial services regulatory structure. Moderated by NASAA President and Colorado Securities Commissioner Fred Joseph, the roundtable will highlight NASAA's five core principles of regulatory reform and offer specific recommendations. The 90-minute audio-only webcast will begin at 12:30 p.m. (EST) on December 11 and also will be archived on NASAA's website for later listening. To register for the webcast, visit here or click the "NASAA Financial Services Regulatory Reform Roundtable" link on the NASAA homepage ...
UNDERSTANDING YOUR BROKERAGE ACCOUNT
12/3/2008
From FINRA: The Financial Industry Regulatory Authority (FINRA) issued What to Expect When You Open a Brokerage Account, a step-by-step guide to help investors opening new investment accounts. What to Expect gives investors the information they need to make appropriate choices about how to pay for securities, what to do with cash in their accounts and who should have control over their accounts by: (1) explaining in plain language the difference between cash accounts and margin accounts, how margin loan accounts work and what happens when investors are subject to a "margin call"; (2) describing how "cash sweep" programs function and helping investors make choices about how to manage their uninvested cash; and (3) outlining what "discretionary authority" means and advising investors to think carefully through the risks involved in allowing someone else to make decisions about their money. What to Expect provides a list of questions to get investors started ...
LEHMAN CLAIM FORMS MAILED
12/3/2008
From SIPC: The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms, said that an estimated 925,000 claims forms have been mailed to customers and creditors of Lehman Brothers Inc. (LBI). The claims forms and related documents are also available online at http://www.lehmantrustee.com and on the SIPC Web site at http://www.sipc.org/cases/sipccasesopen.cfm. In making the announcement, SIPC stressed that all claims must be filed with the court-appointed trustee, James W. Giddens, who is overseeing the LBI liquidation process. Through the coordinated efforts of several agencies and organizations , over 135,000 former LBI customer accounts already have been transferred either to Neuberger Berman (through its clearing firm, Broadridge) or to Barclays Capital ...
“PLAIN ENGLISH” MUTUAL FUND DISCLOSURE
11/26/2008
From the SEC: The Securities and Exchange Commission is moving to improve mutual fund disclosure by requiring that funds provide investors with a concise summary - in plain English - of the key information they need to make informed investment decisions. The Commission also approved amendments to encourage funds to make greater use of the Internet so investors can receive more detailed information in a way that best suits their needs. "Today's action will help mutual fund investors more easily obtain the key information they need - such as the description of the fund's investment objectives and strategies, fees, risks, and performance," said SEC Chairman Christopher Cox. "The summary prospectus will quickly give investors a basic understanding of the fund and will permit them readily to compare one fund to another. Investors will also have access to more searchable information about mutual funds on the Internet - an important improvement in their ability to comparison shop." ...
UNDERSTANDING PREFERRED STOCK
11/26/2008
From PathToInvesting.org : Some corporations issue "preferred" as well as "common" stock. Preferred stock can be an attractive investment because it typically pays a fixed dividend on a regular schedule. The share prices also tend to be less volatile than the prices of common stock. In fact, preferred stock prices tend to move with changing interest rates in the same way that bond prices do. That's one reason this type of stock is sometimes described as a hybrid investment because it shares some characteristics with common stock and some with fixed-income securities. What preferred stock doesn't generally offer is the right to vote on corporate matters or the opportunity to share in the corporation's potential for increased profits in the form of increased share prices and dividend payments ...
THE RIGHT STOCK AT THE RIGHT TIME
11/20/2008
From AAII: To be a successful investor, you can't just buy a good stock. You have to buy the very best stocks at the very best time. And it's not enough for you to simply study the stock itself, you also need to analyze the market conditions in which it is trading. Five decades of historical studies on past market cycles show that three out of four stocks decline when the general market averages correct. That's why market direction is one of the several critical factors in making money in stocks. How do you tell which way the market is headed? The key is learning to decipher the day-to-day market action-in other words, what the market's doing right now. Successful investing isn't about following pundits' predictions or analysts' estimates or going by how you feel. It is about studying the market itself. There are a few key market indicators to look for that provide a trustworthy lens into how the market is behaving overall ...
ECON/PERSONAL FINANCE FOR TEACHERS
11/20/2008
From NCEE: The National Council on Economic Education rolled out its list of economics and personal finance workshops for the National Council for the Social Studies Conference on November 14th-16th in Houston, Texas. During the workshops, social studies teachers received handouts and activities to take back to their classrooms and use with students immediately. In addition, teachers discovered the latest hands-on teaching strategies and techniques that will help them integrate much-needed economics and personal finance concepts into their curriculum. "Demand for economic lesson plans has skyrocketed due to the recent economic crisis," notes Troy D. White, NCEE's director of Product Marketing and Sales. "These workshops give teachers at all grade levels the tools they need to teach about current economic events, both today and in the future." ...
MILITARY FINANCIAL COUNSELING
11/12/2008
From FINRA: Nearly 200 military spouses living in the United States and abroad have been accepted into the highly competitive Military Spouse Fellowship Program, one of many efforts launched by the FINRA Investor Education Foundation to increase the financial knowledge of military service members and their families. The program will provide fellowship recipients with the education necessary to earn the Accredited Financial Counselor ® (AFC) designation and to provide financial counseling and education within the military community. The program, which began in 2006, is administered in partnership with the Association for Financial Counseling and Planning Education and the National Military Family Association ...
ESG INVESTING GUIDE
11/12/2008
From CFA Institute: In recognition of the growing focus placed by long-term investors on environmental, social, and governance (ESG) issues and the lack of a firm framework of analysis in this field, the CFA Institute Centre for Financial Market Integrity today launched Environmental, Social, and Governance Factors at Listed Companies: A Manual for Investors. The Manual provides investors with guidance to arrive at a more thorough understanding of the ESG risks and opportunities that face the companies in which they invest. The manual indicates where to find information on the legislative and regulatory, legal, reputational, and operational ESG risks and opportunities facing shareholders. It also highlights potential implications and ESG scenarios to help a variety of investors, such as pension fund trustees to incorporate sustainable investment into their schemes ...
RESPONSIBLE RETIREES
11/5/2008
From ICI: Retirees do not spend their defined contribution (DC) balances immediately at retirement, but instead make thoughtful choices and use the proceeds prudently, according to a new study released by the Investment Company Institute. Only about 3 percent of accumulated DC account assets were spent immediately at retirement, according to the study based on a 2007 survey of more than 600 recent retirees. The few retirees who spent their entire DC plan lump sums generally had received small distributions and, on average, derived a sizable portion of their household incomes from a defined benefit (DB) plan and Social Security payments. Even of those who spent their entire lump sum, most used the proceeds sensibly, for example, to buy a primary residence, make home repairs, repay debt, or pay for healthcare. The research takes a detailed look at how retirees handled their DC balances at retirement--whether through lump sums, installment payments, annuity payments, or deferrals ...
RETIREMENT SERIES GRANT AWARDED
11/5/2008
From IPT: The Investor Protection Trust has awarded a grant to the Trustees of the Boston Public Library to develop and implement the "How Can I Afford Retirement?" investor education and protection program. The program, targeting the 50-70 year age group, was launched in spring 2008 with a four-part seminar series. The seminars were held in the evenings in the Central library over an 8-week period and the seminar series attracted more than 700 attendees. The curriculum was developed by financial experts and reviewed by an Advisory Group for both content and presentation style. A special Web site - www.affordretirement.bpl.org - was developed for promotion as well as registration and flyers distributed to 500 library staff members and other BPL organizations. ...
SHOPPER'S REMORSE VIA SOCIAL MEDIA
10/30/2008
From NEFE: As financial and credit markets constrict, a new Web site is allowing people to calculate the true cost of unnecessary purchases. Spendster.org, built by the National Endowment for Financial Education® (NEFE®), allows people to share photos of the purchases they now regret while they rate and discuss those of others. The site also provides tools to calculate how costly items like unopened DVDs and spotless coffee makers really are and how much could have been saved if that money were put to more productive use. In addition to video and photo uploads, the site also provides a calculator that determines the actual cost of unnecessary and under-utilized purchases if paid for via credit card, how much these expenditures could have generated for retirement 40 years hence and even how much richer you'd be today if you'd put that same amount into Google stock in 2004 ...
HOLD OR SELL DECISIONS ON MUTUAL FUNDS
10/22/2008
From AAII: Many people hop in and out of investments all too frequently. That's due in part to the fact that mutual fund advice and information are so freely available that individuals often are persuaded to switch from their more prosaic funds to those that have been delivering more exciting short-term returns. At the opposite extreme, others take the attitude that, once bought, mutual funds can practically be held for a lifetime. That can be true in some instances, but it's often not-you really must rethink your portfolio periodically. What are the legitimate reasons for selling funds, and when should you stay put? It's generally unwise to make a big shift from stocks to cash because you fear a bear market. If you have allocated your assets properly and have sufficient emergency money, you shouldn't need to worry ...
SUPPORTING INVESTMENTS IN BANKS
10/22/2008
From CFA Institute: A recent poll released by the CFA Institute shows that members of that organization are supportive of governments' worldwide investing in domestic banks. The global member poll on governments' attempts to stabilize the markets and liquidity also showed that investors believe the top two reasons for market turbulence are recession fears and belief that financial institutions still do not value some assets at current market price. Jeff Diermeier, CFA, president and CEO of CFA Institute, said: "The recent G7 and global treasurer meetings are a step in the right direction. However, investors want banks and other public companies to take some responsibility for their excessive risk taking and focus on short-term goals that greatly contributed to this crisis." He added: "Our members are encouraged by the strong and varied government actions to shore up the industry and for financial firms to open their books and tell the truth about the current market value of some key assets." ...
HOW SAFE ARE YOUR SAVINGS?
10/15/2008
From PathToInvesting.org: With the financial markets in turmoil, people across the country are understandably concerned about the safety of their financial assets. While the U.S. Treasury works out the details of the rescue plan recently passed by Congress, you may find some peace of mind knowing that most bank and brokerage accounts are insured -- to a point -- in the event of bankruptcy - though you're still on the hook for market losses. In addition, Congress recently voted to temporarily raise deposit insurance coverage limits through December 31, 2009. In September 2008, after one large money market fund "broke the buck", the Treasury announced a new federal program to guarantee the value of money market fund shares and stabilize money markets. Many of the largest and best-known mutual fund companies in the United States have opted to participate in the plan ...
PLANNING FOR STAGES OF RETIREMENT
10/15/2008
From FPA: Most of us know that retirement is something for which we must actively plan and save. Social Security alone isn't enough, and traditional pension plans that pay lifetime defined benefits are increasingly scarce. Yet the majority of Americans typically don't know how much to save and don't save enough, according to numerous polls and experts. People can expect to spend 15 to 35 years or more in retirement. That's a long time. What kind of retirement do you want to have? How should you spend money during retirement? How can you prepare for it and when should you start? A new FPA brochure addresses various stages of retirement planning, from starting out in the work world to retirement, in order to help you achieve your dream of a comfortable, fulfilling, financially secure retirement ...
WHO GETS WORK RETIREMENT PLANS?
10/9/2008
From ICI: Most workers who are likely to have the ability to save and to be focused primarily on saving for retirement have access to an employer-provided retirement plan, according to a new study by the Investment Company Institute. The study, Who Gets Retirement Plans and Why, takes a detailed look at the demographic and workforce factors that help determine whether an employer is likely to offer, and workers are likely to seek, deferred compensation in the form of retirement benefits to replace some cash compensation. Policymakers seeking to expand retirement plan coverage tend to focus on barriers that make plans more expensive for smaller employers. Although costs may play a role, the study finds that the likelihood that an employer will offer a retirement plan is related to the characteristics of the firm's workforce, regardless of the size of the firm. ...
FED FORECLOSURE RESOURCES
10/9/2008
From Federal Reserve: The Federal Reserve has several resources for consumers and small municipalities, housing counselors, and consumer and community groups in need of assistance regarding mortgage foreclosure. The Fed has established Foreclosure Resource Centers to help address local and regional challenges in their mortgage markets and local communities and a map of these resources can be found at the Mortgage Foreclosure Resources page of the Fed Web site. Resources from several agencies and organizations providing information that may be of use to consumers in distress are found at the Fed's special Web page ....
INVESTING IN UNCERTAIN TIMES
10/1/2008
From CFA Institute: In the wake of recent market turbulence and firm failures, CFA Institute, the global association for investment professionals, today issued five facts investors should know when making investment decisions. One key tip: Investing in a diversified portfolio of securities rather than individual stocks mitigates risk. Investing in only a few individual stocks increases risk for which an investor is not rewarded compared to investing in a diversified mutual fund or index fund. Investors should incorporate different asset classes and investment styles in their portfolio that do not tend to move together so that market swings in one part of their portfolio are offset in another part. Failing to diversify leaves individuals vulnerable to fluctuations in a particular security or sector, such as financial services. Also, investors should be mindful of not confusing mutual fund diversification with portfolio diversification ...
NEW IRA RESEARCH PROJECT
10/1/2008
From ICI and SIFMA: The Investment Company Institute and the Securities Industry and Financial Markets Association are launching a new research project to improve understanding of investors' use of Individual Retirement Accounts - the largest pool of retirement assets held by Americans-using a new collection of account and demographic data. The two associations will use the database, the first of its kind, to produce a major research report annually, beginning in 2009. IRAs are growing rapidly, fueled by assets "rolled over" from employer-sponsored retirement savings accounts, including 401(k) and similar plans. From 2002 to 2007, IRA assets nearly doubled, from $2.5 trillion to $4.7 trillion, according to ICI and Internal Revenue Service data. Data in the groups' published reports will cover demographics of IRA account holders and their investment activities, including contributions, rollovers, asset allocation, account balances, and distributions ...
PONZI SCHEME ALERTS
9/25/2008
From NASAA: The newest podcast in The Alert Investor series warns about Ponzi schemes, one of the oldest scams on record. A Ponzi scheme works like this: The criminal promises big returns from bogus investments and pays the initial investors with money collected from new investors. With money in hand, the investment may seem legitimate...but investors don't know they're being paid inflated returns off the borrowed money from the new investors. The scam relies on a constant recruitment of new investors to keep it going...but when that well runs dry the scheme collapses like a house of cards, leaving investors holding the bag. The Alert Investor, a series of podcasts produced by NASAA to provide investors with investor protection news and information. The podcast series is a resource for you to learn about investing wisely, avoiding fraud and how to exercise your rights as an investor ...
YOUR MUTUAL FUND PORTFOLIO
9/25/2008
From IPT: IPT has awarded a grant to the Maine Office of Securities to develop and implement the "Senior Investor Awareness Program" investor education and protection program. The Maine Office of Securities offered a year-long Senior Investor Awareness Program beginning on May 1, 2007. The Program provided the Office with an opportunity to re-introduce itself to the senior investor community through face-to-face educational events featuring investor educational materials developed by IPT and the Office. In the first six month of the Program, a series of presentations were scheduled around the state at senior-friendly facilities such as public libraries and senior community centers. Presentations focused on the theme of how investors can identify common investment fraud scenarios and tactics used to promote scams and unsuitable investment products ...
YOUR MUTUAL FUND PORTFOLIO
9/17/2008
From AAII: How simple or intricate you make your mutual fund portfolio comes down to your investor profile: the amount of time and interest you want to spend managing it, your investment knowledge, and the total amount of dollars you'll be investing. There are, however, some investment constants - no matter what, your portfolio of mutual funds should be: diversified; meet your financial goals; and match your risk tolerance. Your asset allocation - how much you put into the various asset categories - addresses these financial concerns. What fund types you select and how many funds you invest in to populate the asset categories is driven by your investor profile. You also need to make sure that, when you think of your mutual fund portfolio, you are considering all of your funds: those held in both your taxable and tax-sheltered accounts. When you view all of your mutual fund holdings as one portfolio, it becomes clear that you need not replicate your total mutual fund portfolio allocation in every individual account ...
SIPC STATEMENT ON LEHMAN
9/17/2008
From SIPC: The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms, issued a statement on September 15, 2008 in relation to reports about the bankruptcy filing of Lehman Brothers Holdings, Inc. SIPC President Stephen Harbeck said: "SIPC has not initiated a liquidation proceeding against the broker-dealer Lehman Brothers Inc. and we do not currently anticipate doing so ... It is important to understand that the holdings of broker-dealer Lehman Brothers Inc., would not be directly impacted by a bankruptcy filing at the separate entity Lehman Brothers Holdings, Inc. Should the situation at Lehman Brothers Inc. change in some material way not now anticipated by SIPC and regulators, we will, of course, intervene as necessary to protect the cash and securities of customers. However, I want to underscore that such an action is considered unlikely at this time ..."
“FTC AT 100” ROUNDTABLE
9/10/2008
From FTC: The Federal Trade Commission will hold its second U.S. roundtable to be held as part of the ongoing agency initiative "FTC at 100: Into Our Second Century." The event, which is free and open to the public, will be held at the Searle Center at Northwestern University School of Law on September 25, 2008. The roundtable will focus on the agency's deployment of resources in its pursuit of its competition and consumer protection missions, including the use of enforcement and other available tools, as well as the effectiveness of the agency in pursuing its core missions ...
EARLY RETIREMENT PITFALLS
9/3/2008
From NEFE: Getting to that first day of retirement is much more complicated than just picking up the gold watch, final check, and settling down to a leisurely life of traveling the world and playing golf. Brent A. Neiser, director for the National Endowment for Financial Education (NEFE) Strategic Programs and Alliances department, says soon-to-be-retirees have a number of questions they need to answer for themselves before actually "pulling the retirement trigger." On top of the list, deciding the not-so-simple question of when to retire can make a significant difference in how much money they'll actually have in retirement. Most fall into the trap of taking Social Security too early, which "can take a third off of someone's lifetime inflation-adjusted Social Security income." ...
NAKED OPTIONS
9/3/2008
From PathtoInvesting.org: When you write, or sell, a call option but don't own the underlying instrument, such as a stock in the case of an equity option, the option is described as naked. Similarly, you write a naked put if you don't have enough cash on hand or in liquid investments to purchase the underlying instrument. The risk you run, however, is that the option holder will exercise the option. If that price of the underlying instrument has moved in the opposite direction from the one you expected, meeting your obligation could result in a substantial net loss. Because of this risk, your brokerage firm may limit your right to write naked options or require that you write them in a margin account ...
SMART INVESTING GRANT
8/27/2008
From IPT: The Investor Protection Trust (IPT) has awarded a grant to the NET Foundation for Television to develop and implement the "Smart Investing" program. Statewide Nebraska public broadcasters NET Radio and NET Television are partnering on the "Smart Investing" project. The project includes an NET Radio series of reports offering investor protection at all ages, as well as a live radio call-in show with investment expert Chris Farrell and television specials later in the year from NET Television. A Web site with helpful information and links to resources and audio links to each of the NET Radio "Smart Investing" segments are available on NET Radio's Web site. Topics covered in the series include investment education and guidance, investment fraud, and the myriad of investment choices available to Nebraskans ...
DIVERSIFIED INCOME HARVESTING AND RETIREMENT INCOME
8/27/2008
From FPA: The use of four distinct investment accounts can produce a higher percentage of income withdrawals to fund retirement, compared with more traditional retirement-withdrawal strategies, contends an award-winning article in the August 2008 issue of the Journal of Financial Planning, published monthly by the Financial Planning Association (FPA). The article, "Income-Harvesting Strategy: Achieving Inflation-Adjusted Income from a Lump-Sum Asset," by Zachary S. Parker, CFP, LUTCF, of Securities America, Omaha, Neb., won a Judge's Grant in the 2007 Financial Frontiers Award competition. To date, most income-distribution strategies proposed for retirement have been based on withdrawing an initial fixed percentage from the retiree's portfolio and then adjusting that initial amount each year for inflation ...
FAIR FUND DISTRIBUTION TO INVESTORS
8/20/2008
From SEC: The Securities and Exchange Commission announced the distribution of nearly $40 million to more than 600,000 investors who were harmed by undisclosed market timing and excessive short-term trading in certain mutual funds. This is the first in a series of Fair Fund distributions that will ultimately return a total of more than $150 million to more than 1.5 million mutual fund investors. In October 2003, the SEC and the Massachusetts Securities Division brought separate administrative proceedings against Putnam. In these proceedings, which were fully settled in April 2004, the mutual fund company agreed to pay disgorgement and financial penalties and to implement certain compliance, mutual fund governance, and employee trading reforms ...
INFLATION AND YOUR INVESTMENTS
8/20/2008
From FiPA: With inflation on the rise and "safe" investments offering paltry returns, it's important to make sure you're not actually losing money on your CDs, money-market accounts or bonds. So where should investors stash their loot? Though money-market yields are not quite as attractive as CDs, investors have the flexibility to move cash around if interest rates improve. When choosing funds, it might be wise to look at tax-sheltered investments like municipal bonds. Another important factor to consider is the expense ratio, which shows how large the fees are. TheStreet.com offers insights and tips on protecting yourself from inflation ...
FOREX FRAUD TASK FORCE
8/13/2008
From CFTC: The Commodity Futures Trading Commission has formed a special task force charged with investigating and litigating fraud in the off-exchange retail foreign currency (FOREX) market. The creation of the task force within the Division of Enforcement comes in the wake of Congress' passage in June 2008 of "The Food, Conservation, and Energy Act of 2008" that clarified and strengthened the CFTC's jurisdiction over this market. The task force will focus on fraud in the retail FOREX market and will work cooperatively with other federal and state regulatory and criminal authorities ...
SENIOR INVESTOR PROTECTION LAW
8/13/2008
From NASAA: New Hampshire Governor John Lynch has into law a measure making New Hampshire the first state to legislatively adopt provisions based on NASAA's Model Rule on the Use of Senior Certifications and Professional Designations. NASAA's model rule prohibits the misleading use of senior and retiree designations, a problem first spotlighted by state securities regulators. The model rule addresses the growing use of financial designations or certifications that ostensibly convey expertise in advising seniors and retirees. The use of a senior designation by salespersons, whether registered or not, confers an impression that the salesperson has special qualifications or specialized education in addressing the needs of senior citizens or retirees, particular areas of finance, financial planning, estate planning, or investing ...
FINANCIAL PLANNING WEEK 2008
8/6/2008
From FPA: The Financial Planning Association is marking its seventh annual Financial Planning Week, October 6-12, 2008. Financial Planning Week brings together those who provide, support and benefit from professional financial planning. During this special week, FPA strives to increase public awareness of the financial planning process to help people make smart financial decisions to achieve their goals and dreams. FPA and its nationwide network of chapters have organized events across the country, including educational seminars, hotlines and interviews. For more information, go to http://www.fpaforfinancialplanning.org/AboutFPA
/FPAWorkingforYou/ on the Web ...
FINANCING YOUR FUTURE
8/6/2008
From NCEE: Financing Your Future is a complete personal finance program on DVD for high school teachers and their students. This personal finance program contains five videos that cover topics such as investing in one's own human capital, developing a banking relationship, understanding credit and debt, and creating a budget. Each video is complemented with three standards-based classroom lesson plans that teachers, parents and mentors can use to reinforce the concepts demonstrated in the videos. For more than 50 years, the National Council on Economic Education has been calling attention to the need to educate our young people effectively in the skills of economics and personal finance and showing how that need can best be met. This new program, developed by the NCEE and sponsored by The Citi Foundation, helps to teach teenagers how sound personal finance skills can empower people and provide greater opportunities for success, fortune, and freedom ...
SENIOR INVESTORS AND “MCI”
7/30/2008
For IPT: As Americans age, more and more individuals will become susceptible to investor fraud, particularly those with mild cognitive impairment (MCI). To counter this growing problem, Baylor College of Medicine (BCM) in Houston, Texas has just begun a new investor protection program funded by the Investor Protection Trust entitled "Preventing Financial Fraud in Older Adults." The program will train physicians and other caregivers to identify and assist those individuals at risk of elder investment fraud due to MCI ...
PICKING THE RIGHT TAX POCKET
7/30/2008
From AAII: One big advantage of a 401(k) plan is that it is tax-advantaged-it helps minimize the amount of money Uncle Sam can grab from your pockets in the form of taxes. But the best way to limit Uncle Sam s reach is to make sure you are putting the right assets in the right pocket. In this instance, the pockets are either taxable savings accounts or tax-deferred 401(k) accounts. The decision as to which account-taxable or tax-deferred-will hold your stock assets and which will hold your fixed-income assets while attaining your desired asset allocation is often referred to as the "asset location" decision. If you are just starting out and have savings only in your 401(k) plan, the decision is relatively easy. But sooner or later you will be saving in both taxable and tax-deferred accounts. In this situation, your first decision, as always, is your asset allocation decision-the percentage of your total savings that you invest in the various asset categories ...
SIPC ID THEFT WARNING
7/23/2008
From SIPC: The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms, is cautioning investors about a new identity theft scam designed to extract confidential information and cash from unwary individuals. SIPC officials said they are investigating phony emails sent by a supposed "senior investment advisor" claiming to act for an actual SIPC member. In fact, the individual whose name appears in the emails has nothing to do with the scheme, and the actual brokerage firm named is likewise not involved in the fraudulent solicitation. The scheme involves an "insurance investment claim" supposedly to be made through the brokerage firm on behalf of SIPC, which is warning that this is a "scam" ...
AMERICANS STILL SAVING FOR RETIREMENT
7/23/2008
From ICI: Despite a year of turbulent financial markets, updated estimates show that Americans continued saving for retirement in 2007. Individual Retirement Account (IRA) assets and employer-sponsored defined contribution (DC) plans, including 401(k) accounts, grew by 11 percent, the Investment Company Institute reported today, helping lift total U.S. retirement assets to $17.6 trillion at year-end 2007. ICI released The U.S. Retirement Market, 2007, the Institute's annual update on the resources that Americans have saved toward retirement. Assets held in employer-sponsored retirement plans represented 64 percent of total U.S. retirement assets in 2007, playing a key role in helping American workers accumulate retirement savings ...
UNDERSTANDING ASSET ALLOCATION
7/18/2008
From PathToInvesting: Asset allocation is a strategy, advocated by modern portfolio theory, for reducing risk in your investment portfolio in order to maximize return. Specifically, asset allocation means dividing your assets among different broad categories of investments, called asset classes. Stock, bonds, and cash are examples of asset classes, as are real estate and derivatives such as options and futures contracts. Most financial services firms suggest particular asset allocations for specific groups of clients and fine-tune those allocations for individual investors. The asset allocation model - specifically the percentages of your investment principal allocated to each investment category you're using - that's appropriate for you at any given time depends on many factors, such as the goals you're investing to achieve, how much time you have to invest, your tolerance for risk, the direction of interest rates, and the market outlook. Ideally, you adjust or rebalance your portfolio from time to time to bring the allocation back in line with the model you've selected. Or, you might realign your model as your financial goals, your time frame, or the market situation changes ...
ROTH VS. REGULAR 401(K)
7/18/2008
From FPA: Conventional wisdom touts Roth 401(k) plans as the better choice for most taxpayers over regular 401(k) plans. But a paper in the July 2008 issue of the Journal of Financial Planning argues that not only are regular 401(k) accounts superior to Roth 401(k)s for all but the wealthiest of taxpayers, they'll remain superior even if future tax rates rise. In "Thinking About a Roth 401(k)? Think Again," Edward F. McQuarrie, Ph.D., a professor in the Leavey School of Business at Santa Clara University, Santa Clara, Calif., challenges what he calls the "side fund" analyses often used to "prove" that Roth 401(k)s are superior to regular 401(k)s ...
IDENTITY THEFT VICTIM SURVEY
7/9/2008
From the FTC: The Federal Trade Commission plans to study the experiences of identity theft victims by conducting a survey of consumers who contacted the FTC after they were victimized. The survey will examine the remedies available to victims under the Fair and Accurate Credit Transactions Act of 2003 (FACT Act). Among other things, the FACT Act gave consumers the right to place fraud alerts on their credit files if they are, or suspect they may become, victims of identity theft; block information on their credit reports that resulted from identity theft; and obtain copies of their credit reports free of charge. The survey results will help guide the FTC's efforts to enforce the law and educate consumers and the consumer reporting industry about their rights and duties ...
SAVING WITH “PAY-TO-USE”
7/9/2008
From FiPA: With the souring economy, people are realizing that they really need to find ways to save more money. One easy way to do that is to initiate a "pay-to-use" program. When you use, say, an appliance that you own, you pay a predetermined amount to your emergency fund. For example, if you did not own a washing machine or dryer, you would have to go to your local laundromat to wash and dry your clothes. In order to use the machines there, you would have to pay for each load you washed. When setting up a pay-to-use system, you simply pay yourself for using the machines you already own, rather than the laundromat owner. TheStreet.com offers insights and tips on how to set up your own "pay-to-use" system to help save your money ...
TEEN FINANCIAL LITERACY
7/2/2008
From NEFE: The first-ever National Financial Literacy Challenge, a voluntary online test of personal finance knowledge sponsored by the U.S. Department of Treasury, shows a majority of high school students don't appear to be learning or retaining the information needed to make important financial decisions. On a more positive note, 10 high school students were recognized at an awards ceremony in Washington, D.C. on June 17, for achieving a perfect score of 100 percent on the test. The winning teens, who came from all over the United States, also were congratulated by the President's Advisory Council on Financial Literacy at its recent meeting ...
LIFE CYCLE MUTUAL FUNDS
7/2/2008
From AAII: In an effort to make financial life easier, the concept of a "life cycle" mutual fund was born. The idea was to offer specific asset allocations and investment selections for specific investment objectives-all bundled up in one fund. And some companies provide these kinds of funds in their 401(k) plan offerings. Today, life cycle mutual funds go by many names including "strategic allocation", "asset manager," "personal strategy," "life strategy" and "target retirement." However, the underlying theme of these funds is the same-one fund that would answer the asset allocation needs of an individual at a particular stage in life. But nothing is ever easy. Although these funds were created to make things simpler for investors, the layered complexity of life cycle fund choices presents a difficult investment task ...
UNDERSTANDING SRI
6/25/2008
From CFA Institute: Want to be a socially responsible investor? A growing number of people are extending their social consciousness beyond driving hybrid vehicles or drinking fair trade coffee to pursuing a socially responsible investment strategy that reflects their values and core beliefs. SRI assets are growing at a faster pace than the broader universe of all investment assets under professional management, according to the 2007 Report on Socially Responsible Investing Trends (PDF) published by Social Investment Forum. As SRI's popularity continues to increase, CFA Institute, the global association for investment professionals, has developed 10 tips for investors interested in developing a socially responsible investing policy ...
SUMMER SAVING
6/25/2008
From TomorrowsMoney.org: The heat is on - summer heat that is. But maybe you're feeling the heat financially too. Summer can be a good time to take stock of where you are financially and to make some changes. Tomorrowsmoney.org has a few suggestions of ways to cut costs and "up your investing i.q." over the summer, such as ways to save when planning a family vacation, teaching kids to save over the summer if they have a job, and ways to increase your saving I.Q. For example, to teach kids to save, have your kids set a savings goal for the summer. Encourage them to split their earnings into three funds - money to give away, money to spend and money to save. ...
FINANCIAL PLANNING GUIDE FOR BOOMERS
6/19/2008
From FPA: With 78 million baby boomers planning for and entering retirement, many are turning to financial professionals to help prepare their nest egg while also supporting their children and parents. AARP and the Financial Planning Association (FPA) recently released a groundbreaking resource to help improve the financial service marketplace for older investors. The AARP and FPA handbook will help financial planners adapt to the changing needs of boomers, offering information on topics including disclosure requirements and dealing with clients' physical impairments. The guide is also designed to be a resource for millions of boomers who are becoming increasingly responsible for their parent's financial security. As financial professionals prepare to work with more clients over the age of 50, it is important that consumers are equally prepared to work with a financial planner in a way that suits their needs ...
IRAs AND AMERICAN FAMILIES
6/19/2008
From EBRI: The continued growth in assets of individual account retirement plans (employment-based defined contribution (DC) plans (such as 401(k)s) and individual retirement accounts (IRAs)) and the growing reliance of workers on these forms of retirement plans has led to much research on average balances in these plans and the percentage of workers who own them. However, as employment-based defined contribution plans have matured, and the number of workers with these plans has increased, there is a growing probability that when these workers retire or leave their jobs, they will have one or more accounts with a former employer or rollover IRAs ...
SHIRKING THE LOAD
6/12/2008
From AAII: Mutual fund investors should avoid unnecessary charges whenever possible. After all, the bottom line in any investment is how it performs for the investor, and that performance includes consideration of all loads, fees and expenses. In most instances, the easiest approach is to simply focus on no-load and low-load mutual funds. For every high-performing load fund, there usually is a similar no-load or low-load fund that can be purchased more cheaply. If you are investing larger amounts of money, however, load funds need not be written off entirely if there is one you find particularly appealing. Many mutual funds that are sold with sales charges (or "loads") offer discounts to investors who invest certain amounts ...
SAVE YOUR LEAFY GREENS
6/12/2008
From FiPA: The tenets of healthy living are almost a cliche by now: Eat your leafy greens, increase your "core strength" with some weight-bearing exercise, and get in a cardio workout every day for at least 30 minutes. Managing your financial life is about as rote: Spend less than you make, regularly sock away some money for the future, and when you're 65 or so, pack up your desk, slap on some sunscreen, and head to milder climes. In other words, save your leafy greens and lift your golf bag with your legs, not your back. Financial Publishers Association member The Motley Fool offers this list of a few potholes to avoid on the road to retirement ...
ARBITRATION ISSUES DEBATED
6/6/2008
From NASAA: The North American Securities Administrators Association (NASAA) announced it will host a public forum to examine the current securities arbitration system. The forum is scheduled for June 24 at the Intercontinental Barclay Hotel, 111 East 48th Street, in New York City. The Forum is free and open to the public on a first come, first serve basis. See details here ...
INVESTWRITE CHAMPIONS NAMED
6/6/2008
From SIFMA: Caroline Hersh, a fifth grader from Morristown, N.J., monitored the trading activity of corporate insiders at two popular clothing chains. Middle-schooler Hayden Lineberger, from Lewisville, N.C, analyzed how the current demand for corn has impacted two blue-chip companies. High school freshman Cameron Etchart from Reno, NV, compared the intricacies of golf to successful stock selection. These students are the InvestWrite National Grand Champions, selected from among 16,027 written and judged essays at the classroom level in the 2007 to 2008 school year, of the Stock Market Game's "InvestWrite" student essay competition. The essays submitted reflect a 31 percent increase over the prior school year, and came from nearly every state. The InvestWrite Grand Champions will receive a $10,000 scholarship and a trip to New York City where they will meet with financial community dignitaries, film an interview with TheStreet.com TV and ring the closing bell at the New York Stock Exchange ...
CAUTION ON LEVERAGED ETFs
5/30/2008
From FPA: As investors' appetite for risk has increased in the pursuit of increasing returns, leveraged exchange traded funds (ETFs) have found their niche. More than 50 of the funds have been launched in just one year, collecting $6 billion in assets. Their popularity stems from the fact that these funds seek to multiply the daily performance of market indexes both on the long and short side. Fund companies that issue leveraged ETFs point out that their investment goal is only to lever the returns by a specific amount on a day-to-day basis, not over an extended period. Despite this caveat, investors may be under the misguided belief that these leveraged funds will also multiply long-term returns by the same day-to-day amount, or at least come approximately close. But this is not the case ...
ECONOMICS CHALLENGE CHAMPS!
5/30/2008
From NCEE: Vestavia Hills High School (Alabama) and Carmel High School (Indiana) defeated more than 1,000 teams from across the country to become the champions in the National Economics Challenge competition sponsored by the National Council on Economic Education and the Goldman Sachs Foundation. Student teams from high schools across the country competed as finalists and traveled to New York to compete to win in one of two divisions. Students enrolled in advanced placement, international baccalaureate and honors economics courses were quizzed in the Adam Smith Division, while those enrolled in single semester general economics classes faced-off in the David Ricardo Division. Over 4,000 high school students in 1,000 teams from 36 states competed in the Spring of 2008 to advance to the championship series ...
MAKING SENSE OF FUNDS IN PORTFOLIO
5/22/2008
From AAII: Surprised at how your mutual fund portfolio behaved in the last market swoon? Want to do some practical return and risk planning for all your mutual funds together? The American Association of Individual Investors has an approach and a simple worksheet that will help you get a grip on your funds. It will give you insights into your funds individually and force you to assess whether the funds you own make sense when they are taken together as a portfolio ...
RETIREMENT ASSETS KEEP GROWING
5/22/2008
From ICI: Americans held $17.6 trillion in retirement assets at the end of 2007, up $1.1 trillion from year-end 2006, the Investment Company Institute reported recently. In the first comprehensive look at the scope of the nation's retirement market for the full year, ICI found that strong growth in Individual Retirement Accounts (IRAs) and employer-sponsored defined contribution plans, including 401(k) accounts, powered the 7 percent increase. The retirement market statistics are reported in the just-released 2008 Investment Company Fact Book. The ICI's authoritative research serves as a primary source of IRA data and provides detailed measures of 401(k) and other defined contribution plans. Federal agencies use ICI data to help measure the retirement holdings of American households ...
SLOWDOWN IN 401(K) GROWTH
5/14/2008
From EBRI: Growth in the number of 401(k)-type plans and the number of participants in those plans, which increased sharply in the 1990s, has slowed in recent years, according to a study released by the nonpartisan Employee Benefit Research Institute (EBRI). The study also shows that ownership and assets in both 401(k)-type plans and individual retirement accounts (IRAs) have risen, that the growth of IRA assets is due to rollovers from other tax-qualified retirement plans, and that most new IRA contributions are going into tax-free-on-withdrawal (nondeductible) Roth IRAs ...
I SPISE A GOOD INVESTMENT ...
5/14/2008
From CFA Institute: In a presentation at the CFA Institute 61st Annual Conference, David R. Beatty, CFA, managing director of the Canadian Coalition for Good Governance, shared an acronym for investors to consider when determining whether a company is being governed with a focus on long-term performance. Investors should remember the acronym SPISE − style, performance, investment, spine, evaluation ...
VAs MAY HAVE SOME UPSIDE
5/7/2008
From FPA: Despite their tarnished reputation due to questionable sales tactics, high expenses and weaker investment performance compared with mutual funds, popular variable annuities (VA) with "living benefit" riders may still be a sound choice for some retirees, concludes an article in the May 2008 issue of the Journal of Financial Planning, published monthly by the Financial Planning Association. In his article, "A Context for Considering Variable Annuities with Living Benefit Riders," John H. Robinson examines how the investment performance of a particular type of VA rider stacks up against an index mutual fund as each tries to weather two bear markets....
UNDERSTANDING ETFs
5/7/2008
From FiPA: The "It" equity -- the exchange-traded mutual fund -- is no spring chicken. It's been around since the early 1990s. But ETFs are still turning heads. It's no wonder: The combination of index investing with the handiness --- and lower costs -- of individual stock ownership is irresistible. Are ETFs a good match for your portfolio? "Exchange-traded" refers to shares that trade all day long on the major stock market exchanges (just like regular stocks, although ETFs are found mainly on the American Stock Exchange). "Funds" are investing vehicles that hold dozens, hundreds, or even thousands of companies under one umbrella unified by a particular investing theme (such as companies that comprise the Dow or ones whose main business is in the biotech industry). For more, see this story from The Motley Fool ...
'CATASTROPHE BOND' CAUTION
5/1/2008
From FINRA: The Financial Industry Regulatory Authority (FINRA) has issued an Investor Alert warning investors about the risks of speculating on natural disasters with event-linked securities, such as catastrophe bonds or "cat bonds." Cat bonds offer high yields but can quickly lose most or all of their value if a triggering event, such as a hurricane, earthquake or pandemic, occurs in specified geographical regions. The new Investor Alert, "Catastrophe Bonds and Other Event-Linked Securities," describes how event-linked securities work and helps investors determine whether and to what extent the funds they hold invest in these securities ...
PAUSE FOR INVESTING FACTS
5/1/2008
From SEC: The Securities and Exchange Commission announced the launch of its latest offensive targeting online boiler rooms, cold calls, and other potentially fraudulent financial solicitations circulating to unsuspecting investors. Such solicitations often use phony claims of SEC registration, false U.S. addresses, or endorsements from make-believe government agencies or international organizations to make their investment opportunities appear more credible. Some also falsely claim to be affiliated with established brokerage firms. The SEC's initiative is called "PAUSE" for Public Alert: Unregistered Soliciting Entities ...
AVOIDING INVESTMENT FRAUD
4/22/2008
From NFA: In conjunction with Chicago's Seventh Annual Money Smart Week (April 20-26), National Futures Association (NFA) is co-sponsor three upcoming events designed to teach investors how to avoid becoming victims of investment fraud. NFA staff will present "Don't Become a Victim of Investment Fraud" at two Chicago Public Library locations. Attendees will learn how to tell a legitimate investment sales pitch from a fake one, as well as what questions to ask and actions to take when reviewing any investment offer. Admission to the program is free ...
UNDERSTANDING THE SUBPRIME CRISIS
4/22/2008
From PathToInvesting: The subprime mortgage crisis has dominated the headlines since the summer of 2007. What began as a limited problem affecting high-risk- or subprime - mortgage borrowers in the U.S. has rippled throughout the world financial markets. Most of the subprime loans now facing default are adjustable-rate mortgages (ARMs). By early 2008, more than one in five subprime mortgages was delinquent or in some stage of foreclosure. The crisis appears to be spreading beyond the subprime market. As home prices fall and lenders impose tougher standards in response to defaults, some prime borrowers holding adjustable-rate loans are finding it difficult to refinance, which many of them had expected to be able to do before their rates reset. As defaults and foreclosures increase, investors in mortgage-backed securities also face steep losses ...
UNDERSTANDING GROWTH INVESTING
4/10/2008
From AAII: Investment decisions and planning are all concerned in one way or another with one concept: growth. Stock investors examine the earnings growth of firms; portfolio planners estimate portfolio growth. And ultimately growth in the real value of your assets is the central focus of your endeavors and concerns. But most investors do not have an intuitive feel for growth, particularly over longer time periods. If you are completely in the dark when confronted with this issue, you have little basis for judgment. For advice on developing an intuitive feel for the mechanics of growth, check out this AAII Journal article ...
PROGRAMA EN ESPAÑOL
4/10/2008
From NEFE: The National Endowment for Financial Education has translated its widely-used High School Financial Planning Program (HSFPP) student guide to Spanish. It is available online for Spanish speakers and teachers to use in learning or teaching about personal finances. "Unlike other programs that have been straight translations from English to Spanish, the student guide underwent a cultural review as well," said John Parfrey, director of the HSFPP. To download the Spanish Student guide, parents and students can go to their respective sections within hsfpp.nefe.org and click on the Programa en Español link on the left-hand navigation ...
AVOIDING REVERSAL OF MORTGAGE FORTUNE
3/26/2008
From FINRA: The Financial Industry Regulatory Authority (FINRA) has issued an Investor Alert urging homeowners over the age of 60 to carefully weigh all of their options before tapping into their home equity through reverse mortgages to obtain additional income for their retirement years. A reverse mortgage is an interest-bearing loan secured by the equity in a home and can be helpful to homeowners having trouble meeting expenses. The FINRA Alert cautions homeowners that these loans - which are being aggressively marketed as an easy, cost-free way for retirees to finance lifestyles or to pay for risky investments - can jeopardize their financial futures. The new Investor Alert is entitled "Reverse Mortgages: Avoiding a Reversal of Fortune" ...
SMOOTHING OUT HOUSEHOLD SPENDING
3/26/2008
From FPA: Is there a better way for the average family to smooth out and raise their standard of living over their lifetime than current conventional financial planning recommends? Yes, argues an economist in the March 2008 issue of the Journal of Financial Planning, published monthly by the Financial Planning Association. Laurence J. Kotlikoff, Ph.D., a professor of economics at Boston University in Massachusetts advocates a long-standing economics approach to household financing based on the concept of "consumption smoothing" ...
PRECIOUS METALS INVESTING
3/20/2008
From CFA Institute: Is adding precious metals to U.S. equity portfolios a good idea? A new study, "Can Precious Metals Make Your Portfolio Shine?," looks at the benefits of investing in gold, silver, and platinum. The authors address two major investor concerns: What are the benefits of investing in precious metals and how can investors achieve a beneficial exposure to precious metals? Their findings suggest that precious metals serve as an effective hedge against the typical decline in equities that occurs during an increasing interest rate environment ...
COMPANY STOCK AND YOUR 401(k)
3/20/2008
From EBRI: The recent collapse in the value of Bear Stearns shares has led to new interest in the role of company stock in 401(k) plans. The nonpartisan Employee Benefit Research Institute (EBRI) has done extensive analysis on company stock in 401(k) plans. The August 2007 EBRI Issue Brief found that, on average, 401(k) participants today hold significantly less of their account assets in company stock than they did in 1996 ...
'INCOME DECUMULATION' ... AND YOU
3/12/2008
From NEFE: Retirement asset decumulation and the decisions that influence it are gaining attention as more firms move from traditional pension plans to plans that put the responsibility to save on each individual (such as 401(k)s). Now, many Americans are responsible for saving and investing, and then face consequences if they make mistakes or receive sub-par earnings. Because retirees can make uninformed, unwise decisions that can affect their financial well-being and standard of living in retirement, the National Endowment for Financial Education (NEFE) organized a landmark Retirement Income Decumulation Think Tank this past December. Twenty leading national authorities examined the critical decisions Americans make about decumulation of retirement income and assets ...
THE QUEST FOR INVESTING VALUE
3/12/2008
From BetterInvesting: When you've identified a company to add to your portfolio, the quest for value may take you in an unusual direction. Let's assume you've evaluated a company's fundamentals and determined the price you're willing to pay, which is based at least partly on its discounted cash flow or the present value of the dividend income you estimate it should provide in the future. If the market price is higher than what you're willing to pay, exercising patience - an essential component of value investing - obviously is often the smart choice. While you wait, you may learn even more about the stock by examining recent patterns in its price. If you do, you're likely to discover that the price has moved up and down within a clearly defined and often fairly narrow trading range over a period of weeks, months or even longer...
BROKERAGE FIRM CUSTOMERS TO BE NOTIFIED
3/6/2008
From SIPC: The Securities Investor Protection Corporation announced today that it is liquidating Hanover Investment Securities, Inc., of Madisonville, Louisiana, under the terms of the Securities Investor Protection Act (SIPA). The liquidation of the New Orleans area broker-dealer is the first such proceeding to be initiated by SIPC in 14 months. Investor losses may be as much as $2 million. Information is expected to be sent shortly to known customers of the firm ...
MUTUAL FUNDS SALES CRACKDOWN
3/6/2008
From FINRA: FINRA announced today that it has settled cases against five firms for mutual fund sales and supervisory violations - including improper sales of Class B and Class C mutual fund shares and failure to have supervisory systems designed to provide all eligible investors with the opportunity to purchase Class A mutual fund shares at net asset value (NAV) through NAV transfer programs. For the share class sales violations, FINRA imposed an $800,000 fine against Prudential Securities and a $750,000 fine against UBS Financial Services, Inc. for improper sales of Class B and Class C mutual fund shares. A $100,000 fine was imposed against Pruco Securities for improper sales of Class B shares. In resolving the Class B and Class C share matters, these firms also agreed to remediation plans that will address over 27,000 fund transactions in the accounts of 5,300 households. It is estimated that total remediation to customers will exceed $25 million...
TAKE 5 FOR INVESTING KNOW-HOW
2/27/2008
From CFA Institute: Investment professionals, business news journalists, and investors who want to learn more about current market, ethical, and economic issues can now do so with the new CFA Institute "Take 15" Webcast series. These 15- to 20-minute interviews with topical experts are designed to educate those who follow today's news coverage but want to dig more deeply into topics such as who is responsible for the subprime crisis and where we may be going with systemic risk in structured products. Current "Take 15" topics include: Basics of Mortgage Securitization, Moral Hazard and Excess Liquidity, Systemic Risk in Structured Products, The Pricing of Illiquid Securities in the Subprime Space, Ethical Dilemmas in Soft Dollars, Gift Giving, and Proxy Voting, Asset Manager Ethics in Proxy Voting, and Avoidance of Front Running, and GIPS Compliance ...
CAPITOL HILL STOCK MARKET CHALLENGE
2/27/2008
From SIFMA: The Securities Industry and Financial Markets Association (SIFMA) recently announced the official start of the fifth annual "Capitol Hill Challenge Stock Market Game," SIFMA's only nationwide high school stock market game competition. Sixty schools across the country are competing for a grand-prize trip to Washington, D.C., to meet with their elected Member of Congress, tour the nation's capital and to see first-hand how our national economic policies are developed. Teams of three to five students each invest a hypothetical $100,000 portfolio in real-world securities ...
THE 2008 ELECTIONS AND YOUR INVESTMENTS
2/20/2008
From PathToInvesting: What impact is the outcome of the presidential election likely to have on your investment portfolio? In the short run, you'll probably be hard pressed to tell. There's no evidence to back up the claims that markets are stronger when one party controls the White House and weaker when the other does. Generally speaking, the markets prefer certainty to uncertainty. So once the ballots are counted and the decision is final, election speculation will no longer be a factor in whether to buy or sell. Investors will be reacting to other forces, and whether markets go up or down will depend on the same influences that affect them in non-election years ...
IDENTITY FRAUD TOPS LISTS
2/20/2008
From the FTC: The Federal Trade Commission has released the list of the top consumer fraud complaints received by the agency in 2007. The list shows that for the seventh year in a row, identity theft is the number one consumer complaint category. Of 813,899 total complaints received in 2007, 258,427 were related to identity theft, which can be a major concern for investors. The report states that credit card fraud was the most common form of reported identity theft at 23 percent, followed by utilities fraud at 18 percent, employment fraud at 14 percent, and bank fraud at 13 percent ...
PROTECTING SENIOR INVESTORS
2/12/2008
The Securities and Exchange Commission (SEC), the North American Securities Administrators Association (NASAA), and the Financial Industry Regulatory Authority (FINRA) announced a new initiative as part of securities regulators' efforts to protect senior investors. The goal of the initiative is to identify effective practices used by financial services firms in dealing with senior investors, and to provide information about these practices publicly. As regulators have increasingly focused on protecting older investors, many investment advisers and broker-dealer firms are evaluating their current practices in serving seniors ...
CHANGING ASSET ALLOCATION
2/12/2008
From AAII: Many investors who are approaching retirement are wondering if they will need to change their asset allocation when they are no longer collecting a paycheck. The information available from the popular press and many advisors is to generally guide retirees to change their allocation to one that is more conservative. This is usually interpreted to mean that the investor should lighten up on stocks and put more of their investments into bonds. But retirement doesn't necessarily mean an individual should change their asset allocation ...
HOW INVESTMENT RESEARCH PAYS OFF
2/7/2008
From CFA Institute: Investment analyst research can help investors make better informed investing decisions, which is particularly important during turbulent economic periods. "Investment research plays an important role in the investment decision-making process, and it can vary in terms of quality and usefulness," said Stephen Horan, CFA, head of private wealth at CFA Institute. "When there are significant market fluctuations, investors need to look beyond TV sound bites for information. CFA Institute believes it is important that individual investors understand the key benefits and limitations of securities research because doing so will help them make greater use of this valuable analytical tool." Horan said that, among other things, individual investors should read the entire research report with a critical eye to get the whole story ...
WHY YOU SHOULD PUT UP WITH CALLS
2/7/2008
From FPA: With equity markets in turmoil, many investors are seeking ways to protect their portfolios against losses. One traditional method has been the use of options such as collars, calls, and puts. But do they really work, and if so, which strategies work best? That's the research focus of an article, "Benefits of Protecting Investment Portfolios with Options: A Historical Perspective," by Robert Dubil in the February 2008 issue of the Journal of Financial Planning, published monthly by the Financial Planning Association. "We find that buying near-the-money puts, while expensive, results in increased overall return and significantly reduced risk," concludes Dubil ...
HANGING ON TO IRAs
1/31/2008
From ICI: Most owners of Individual Retirement Accounts (IRAs) have a strategy for managing their income and assets in retirement and tend to preserve their IRA assets as long as possible, according to a new study released today by the Investment Company Institute. With $4.6 trillion in assets, IRAs represent more than one-quarter of Americans' retirement assets and 10 percent of all household financial assets. Americans husband those assets carefully: Eight in 10 households owning traditional IRAs indicate they have a plan for managing their income in retirement. For seven out of 10 traditional IRA owners, that strategy includes a plan to preserve their IRA assets as long as possible ...
FINANCIAL ED 101
1/31/2008
From NEFE: The National Endowment for Financial Education (NEFE) now provides an easily implemented, unbiased and noncommercial financial education solution for colleges, universities and alumni associations to offer to their students. CashCourse, an online financial education resource directed at college students and recent grads, was piloted last fall at several universities through their Web portals. Living away from the guidance of their parents during college is often a time when many students make unwise financial decisions due to lack of financial knowledge. This deficiency can lead to financially irresponsible or uninformed behaviors, such as getting into debt, which can extend well beyond their college years. Increasing concern over this issue has lead to the joint effort between NEFE and universities to fill in the missing gaps of financial knowledge that many college students have ...
WHY YOU NEED TO GROW YOUR NEST EGG
1/23/2008
From FiPA: It's tough to invest successfully. You're putting your money at risk when you invest. You can wind up with less than what you started with. In addition, unless you pay a mutual fund manager to do your homework for you, you can expect to spend several hours a week researching potential investments. All of that seems to work against the one true aim of investing: growing your nest egg now to have more money later. You absolutely need to invest today if you want a shot at comfortable golden years. The Motley Fool explains why you must invest NOW ...
WHY YOU SHOULD KEEP AN EYE ON COMMISSIONS
1/23/2008
From AAII: Non-financial firms can make consistent profits by combining parts into a whole. For example, GM buys parts, puts them together, and sells cars for more than the cost of the parts. GM adds value by putting the parts together. But financial firms cannot add value merely by buying securities and combining them into a portfolio. Mutual funds can charge a convenience fee for combining securities into a portfolio and for reinvesting the distributions, but these conveniences can be attained for 0.20% or less. Thus, there is, at best, a very small value added merely from combining securities into a portfolio ...
GUIDE TO ONLINE INVESTING FORUMS
1/16/2008
From NFA: The Internet provides many opportunities to get involved through live chat rooms, online forums and bulletin boards. In many cases, you can obtain valuable information from these Web sites. You can also, however, obtain false information and even become a victim of fraud. The National Futures Association offers tips on how to safely participate in these forums. Some posters use multiple aliases. That means it is very difficult for you to know the true identity of the individual behind the message. Don't assume that the person posting the information is an investment professional that has no ulterior motive in sharing his information with total strangers ...
CEO PAY: WHAT AN INVESTOR NEEDS TO KNOW
1/16/2008
From CFA Institute: The CFA Institute Centre for Financial Market Integrity has released its global manual, The Compensation of Senior Executives at Listed Companies: A Manual for Investors, which provides a comprehensive, in-depth examination of how executive compensation is determined, the elements of compensation, governance practices, and associated risks for investors. The Manual outlines some common corporate governance structures instrumental in setting compensation and describes the purpose and implications of each ...
INVESTING AT YOUR LIBRARY
1/9/2008
From FINRA: The Financial Industry Regulatory Authority (FINRA) Investor Education Foundation and the American Library Association (ALA) today announced 13 grants, totaling more than $853,000, to public libraries and library networks across the country, giving millions of library patrons and their families greater access to unbiased investing information and resources. The grants are awarded as part of a new program, Smart Investing @ your library, which is administered jointly by the Reference and User Services Association, a division of ALA, and the FINRA Investor Education Foundation. The program addresses the growing need for reliable investor education at the grassroots level. Increasingly, individuals are responsible for their own retirement planning and for navigating complex financial decisions virtually every day. Investor education opportunities and materials will be available to patrons at no cost ...
TARGETING YOUR FRIEND
1/9/2008
From PathToInvesting: A target fund is a fund of funds that holds a diversified portfolio of individual mutual funds or exchange traded funds (ETFs), or a combination of mutual funds and ETFs. The target fund managers choose the particular combination to create an asset allocation that's designed to meet a specific long-term investment objective. In most cases, the funds that are included in the fund of funds are part of the sponsor's family of funds. The money you invest is divided in proportion to the weight the managers assign to each fund in the portfolio. In a simplified example, if a target fund includes ten individual funds that are equally weighted, each time you invest, 10 percent of the total goes into each of the individual funds ...
PICKING THE RIGHT TAX POCKET
1/3/2008
From AAII: One big advantage of a 401(k) plan is that it is tax-advantaged -- it helps minimize the amount of money Uncle Sam can grab from your pockets in the form of taxes. But the best way to limit Uncle Sam's reach is to make sure you are putting the right assets in the right pocket. In this instance, the pockets are either taxable savings accounts or tax-deferred 401(k) accounts. The decision as to which account -- taxable or tax-deferred -- will hold your stock assets and which will hold your fixed-income assets while attaining your desired asset allocation is often referred to as the "asset location" decision. If you are just starting out and have savings only in your 401(k) plan, the decision is relatively easy. But sooner or later you will be saving in both taxable and tax-deferred accounts. In this situation, your first decision, as always, is your asset allocation decision the percentage of your total savings that you invest in the various asset categories. The recent AAII Journal article, "Picking the Right Tax Pocket for Your Assets" can help you make these decisions. ...
HOW TO STOP LOSING MONEY IN 2008
1/3/2008
From FiPA: The vast majority of retail traders lost money in 2007 and will lose money in 2008, despite ample doses of education, enthusiasm and brilliant ideas. The best way to start making money is to stop losing it. In that connection, TheStreet.com, a member of the Financial Publishers Association, is offering the thoughts of RealMoney.com contributor Alan Farley on the 20 ways to staunch the bleeding and get back into the winner's circle in the new year...
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