New Info for Investors 
MICRO-CAP STOCK WARNING - Information is the investor's best tool when it comes to wise investing. But accurate information about "micro-cap stocks"-low-priced stocks issued by the smallest of companies-may be difficult to find. Many micro-cap stocks trade in the over-the-counter market and are quoted on OTC systems. But many micro-cap companies do not file financial reports with the SEC, so it's hard for investors to get the facts about the company's management, products, services, and finances, according to a recent AAII Journal article ... GAUGE YOURSELF ON SCAM AND RISK METERS - Even as the current financial crisis has battered the portfolios of many investors, so too has it fueled investment fraud schemes. In turbulent economic times, ongoing schemes tend to unravel as wary investors begin demanding their cash. And the opportunity for new fraud can rise, as fraudsters look for any hook to exploit those who hope to recover their losses. FINRA issued an alert to warn investors about classic types of investment fraud and to help investors spot and avoid the types of persuasion tactics fraudsters use. Their Scam Meter can help investors assess whether an opportunity is too good to be true, and the Risk Meter reveals whether you share characteristics and behavior traits that have been shown to make some investors vulnerable to investment fraud ... PROTECT DAD FROM PHISHING - The Federal Trade Commission's Father's Day e-card is the perfect gift for the man who already has enough ties. But even more important, it can save your dad a whole lot of headaches. Available from the FTC in English and Spanish at http://www.ftc.gov/dad and http://www.ftc.gov/padre, the cards offer dads advice on keeping their personal information secure. Help your dad figure out how to spot fraud on the Internet. When Internet scam artists go "phishing," they send spam e-mails or pop-up messages asking for personal information, Social Security numbers, and/or passwords. To gain the trust of those they wish to con, these hustlers often pose as representatives of a bank or credit union, an investment firm, or a government agency ... RETHINKING RETIREMENT SAVING AND INVESTING - You commit yourself to saving for retirement. You take steps to understand how long your financial resources must last in retirement years so you don't outlive your savings; you test guideline amounts needed to retire using an online calculator; you start contributing to 401(k) or IRA or SEP or other savings or investment account and keep contributing regularly and as a result, you watch your retirement savings steadily increase. The economic recession has fundamentally challenged that thinking but it doesn't mean you should give up hope, stop taking actions to plan, save and invest for retirement--or stop working toward your important life goals. Tomorrowsmoney.org offer several tips to rethink your approach to retirement planning ... STANFORD “RELOAD” SCHEME WARNING - Some investors in the Stanford International Bank CD program are being contacted by individuals who are offering their "services" to help return investors' lost funds. Unfortunately, unscrupulous individuals often approach victims with false promises of faster or larger returns of their lost money. Investors can be tricked into paying for these "services" thinking they are merely paying a little to get back a lot more. Instead, they are often victimized a second time. In SEC enforcement cases involving an asset freeze of a firm or individual, the court often appoints a receiver to act in the interests of all investors by identifying, locating and liquidating assets ... SURVEY: RETIREMENT EXPECTATIONS PLUMMET - The recession has cast a pall over the retirement expectations of the vast majority of Americans, leaving a record-low 13 percent this year able to say they are very confident of having enough money to live comfortably in retirement, according to the 19th Annual Retirement Confidence Survey (RCS) released by the nonpartisan Employee Benefit Research Institute (EBRI). Among workers, those feeling very confident about retirement has tumbled by a full half in the last two years ... AVOIDING A REVERSAL OF (MORTGAGE) FORTUNES - If you are in your sixties, and own your home, chances are you have heard about reverse mortgages. Reverse mortgages can be helpful to homeowners who want to stay in their homes but are having trouble keeping up with their mortgage payments, or who have no other source of funds to pay bills. But as more Americans near retirement age, some financial institutions are aggressively marketing reverse mortgages as an easy, cost-free way for retirees to finance lifestyles that can jeopardize their financial futures. The Financial Industry Regulatory Authority has issued an alert to urge homeowners thinking about reverse mortgages to make informed decisions and carefully weigh all of their options before proceeding ...
PARENTS—THE BEST FINANCIAL HEROES? - Now wrapping up its first year, the Arizona Pathways to Life Success for University Students (APLUS) study already offers promising data for how, as a culture, we can begin to move toward healthier personal finances. Study findings show that parents are poised to be the true heroes when it comes to better money management. APLUS researchers found that parents have more influence over their children's financial knowledge, attitudes and behaviors than work experience and high school financial education combined. The National Endowment for Financial Education funded the first wave of research ...
PREVENTING ELDER FINANCIAL ABUSE - The Employee Benefit Research Institute's American Savings Education Council new study on elder financial abuse prevention, "Broken Trust: Elders, Family, and Finances," provides a comprehensive understanding of the extent and implications of all manifestations of elder financial abuse-personal, institutional, and societal. While underreported, the annual financial loss by victims of this type of abuse is estimated at $2.6 billion dollars. And the increased aging of the population will dramatically increase the opportunity for it to grow. The perpetrators of such abuse are typically not strangers, and the victims come from all walks of life, regardless of gender or race ... MICROGRANTS FOR INVESTOR ED - The Investment Company Institute Education Foundation (ICIEF) is launching a pilot program to provide microgrants--up to $25,000 each-- to schools and other nonprofit organizations within the greater metropolitan Washington, DC, area to incorporate investor education into existing financial education courses, programs, and activities. Children and adults alike need a better understanding of financial markets and how these markets work to benefit both individuals and society. The program's objective is to identify, inspire, or replicate best practices in investor education--innovative, hands-on efforts that not only build knowledge, but change attitudes and create confidence as well ...
TOLERATING RISK IN LEAN TIMES - The April issue of Better Investing magazine features the article, "What's Your Tolerance for Risk?" After experiencing the 2008 stock market, many shell-shocked investors may seek to escape risk by avoiding investing altogether--an unwise decision, according to the authors: "Although this past year's experience has been very difficult for everyone, it may have some good long-term results. Perhaps people will realize that you can't make fortunes overnight, that you should avoid being heavily in debt, that you shouldn't spend all your income, that it's important to accumulate a cash reserve for a rainy day and that you really need to investigate before you invest. In other words, they may start believing all those maxims that financial planners have been preaching for years" ... “MONEY MATTERS” IN DIFFICULT TIMES - It's become an all-too-familiar headline: layoffs and furloughs, falling housing prices and rising consumer debt, declining retail sales and increasing costs of living. Money--and the lack of it--is a source of stress and frustration. To help, the Federal Trade Commission has launched Money Matters, a new Web site for people dealing with debt and struggling to find a job. It's a guide to creating a budget, saving, and spending wisely during these difficult times. It offers short, practical tips, videos, and links to reliable resources for more information on topics like credit repair, debt collection, jobs scams, managing mortgage payments, and foreclosure rescue scams ... LEARNING FROM TAX REFUND DELAY - With the economy in a tail spin, everyone is having a hard time making ends meet. So too are states, which face not only declining revenues, but the need to find millions of dollars for income tax refunds. California and Kansas are the first two to face that dilemma. California is suspending refunds for a time. The Kansas governor and the legislature are trying to fashion a solution. Could this happen where you live? It's possible. And if you were counting on that refund, now what? According to the National Endowment for Financial Education, one solution is to plan for the unusual ... rather than always have to scramble with the unexpected happens. NEFE explains why you shouldn't count on your tax refund to pay down debt, purchase a big-ticket item, or contribute to an IRA ... BEWARE THE AFFINITY SWINDLER - State securities regulators are warning investors to be on guard against a rise in affinity group fraud. In a world of increasing complexity, many feel the need for a short-hand way of knowing whom to trust. So, many fall prey to affinity group fraud in which a con artist claims to be a member of the same ethnic, religious, career or community-based group. The North American Securities Administrators Association offers tips for avoiding this type of fraud: beware of the use of names or testimonials from other group members; obtain a prospectus that details the risks in the investment and procedures on how to get your money out; contact your state or securities agency to learn more about the firm ... STIMULUS SCAM ALERT - The Federal Trade Commission is warning consumers that they could get stung by an economic stimulus scam. On the Web and in email, scammers tell consumers they can help them qualify for a payment from President Obama's economic stimulus package. They merely have to provide a little information (e.g., a bank account number) or a small payment. "Web sites may advertise that they can help you get money from the stimulus fund. Many use deceptive images of President Obama and Vice President Biden ," says Eileen Harrington, acting director of the FTC Bureau of Consumer Protection. "Don't fall for it; you'll get scammed" ... SEC IMPERSONATOR SCAM - The Securities and Exchange Commission is warning investors and financial services firms about con-artists who may use the names of actual SEC employees to mislead potential victims. The agency also is providing information to help potential victims protect themselves from SEC impersonators. In some instances, investors in the U.S. and abroad have been tricked into revealing private information, giving fraudsters access to their brokerage accounts, and even sending money and other assets to imposters ...
THE STIMULUS BILL AND YOUR FINANCIAL PLAN - For the members of the Financial Planning Association, the new stimulus bill means it's time to go back to the proverbial drawing board. On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009, a $787 billion stimulus package aimed at lifting the economy out of recession, creating millions of jobs, and boosting consumer spending. The plan includes numerous tax breaks for Americans who are struggling to make ends meet. Financial planners say it is a great opportunity to revisit and tweak your financial plan. "This is a huge wakeup call to every person in America to get your own financial planning done, to get your financial house in order," said FPA member Marty Kurtz, CFP®, of The Planning Center. Part of getting your house in order will require spending time "absorbing everything" about the new law before taking any action that could affect you over the next few years. "Spend time understanding the bill," said FPA member Paula Hogan, CFP®, of Hogan Financial Management. "There is a lot of money being given away." ...
MONEY ADVICE FOR THE NEWLY UNEMPLOYED - "Managing Your Job Transition: Making Smart Financial Choices after a Job Loss" is a helpful brochure published by the Financial Industry Regulatory Authority and distributed in collaboration with the Better Business Bureau of Metropolitan New York, Inc. It offers tips for consumers about managing their finances in the event of unemployment; asking the right questions about their companies' benefit plans, checking on financial advisers, and avoiding fraud. "Individuals can't control when they may face unemployment," said John Gannon, FINRA senior vice president for investor education. "But when faced with a sudden job loss, they may be able to ease the financial impact on themselves and their families. FINRA wants to help workers make sound decisions that preserve their hard-earned retirement savings" ... BUILD WEALTH, NOT DEBT - America Saves Week is February 22-March 1, and the Investment Company Institute is pleased to join more than 1,000 corporate, nonprofit, and government organizations in a nationwide campaign to promote individual savings. Each year, during America Saves Week, tens of thousands of Americans set a savings goal and commit to saving. Nearly 93 million Americans use mutual funds to save for long-term goals. "Now, more than ever," ICI President and CEO Paul Schott Stevens said, "it's important to stick with it. History tells us that markets will recover-and your accounts will rebound along with them" ...
FINANCIAL ED FOR COLLEGE STUDENTS - CashCourse - NEFE 's online financial education resource for college students - is now in use at more than 200 universities, colleges, and alumni associations. NEFE has improved CashCourse so that the resource engages students more and helps college administrators better reach their students with financial education. The five workshop kits include PowerPoint presentations, facilitator's guides, hands-on learning materials for students, and post-workshop evaluations. The workshop topics cover budgeting, money management, identity theft, credit, and debt. To learn more, visit www.CashCourse.org ... IRAS: HELPING AMERICANS SAVE - Seven in 10 U.S. households have some type of tax-advantaged retirement savings through work or through Individual Retirement Accounts (IRAs), according to a new Investment Company Institute study. "The Role of IRAs in U.S. Households' Saving for Retirement, 2008," found that IRAs have played an increasingly important role in Americans' retirement savings. Forty-seven million, or 41 percent, of U.S. households reported owning IRAs in May 2008. The study also finds that rollovers from employer-sponsored retirement plans have fueled the growth in IRAs, and more than half of households owning traditional IRAs have rollover assets in them. In 2008, traditional IRAs were the most common type of IRA owned, followed by Roth IRAs and employer-sponsored IRAs ... AVOIDING MADOFF-STYLE PONZI SCHEMES - How can investors protect themselves from financial losses in a Ponzi scheme of the type associated with Bernard Madoff? What red flags should they look for to alert them to a possible Ponzi scheme? What do investors need to know in general about spotting and avoiding investment fraud? The nonprofit Alliance for Investor Education (AIE) is responding to those concerns by outlining 12 of the best Web-based resources for investors to educate themselves about investment fraud, particularly Ponzi schemes. The Alliance's new "Avoiding Madoff-Like Ponzi Schemes: What Investors Need to Know to Protect Themselves" is available now ... KEEPING PERSPECTIVE IN A “MELTDOWN” - At times of financial turmoil, such as those we have experienced for the last year and even more severely over the last month, many investors may feel lost in unfamiliar-and extremely discomforting-territory. In times like these, when the media headlines are screaming "meltdown" and "unprecedented crisis," fear and uncertainty can prompt an emotional response that causes investors to flee their stock holdings and run for the cover of more certain investments such as Treasury bills. But this emotional response is based on a short-term perspective, and it could result in the opposite of what you intend-substantially increasing the risk that your long-term investment goals will not be reached. Instead, you need to take emotions caused by short-term conditions out of the equation by putting things into perspective and sticking to the fundamental rules of investing. The American Association of Individual Investors offers some advice on how to keep perspective in turbulent times ... SEC WARNING: BEWARE OF FAKE REGULATORS - Securities and Exchange Commission staff are aware of a number of ongoing investment scams in which con artists have used the names of real SEC employees to trick victims, including non-U.S. investors, into giving the fraudsters access to their brokerage accounts, revealing private information, and even sending the perpetrators money and other assets. Even where the fraudsters do not request that funds be sent directly to them, they may use the personal information they obtain to steal the individual's identity and then misappropriate his or her financial assets. If you receive a call or email from someone claiming to be from the SEC (or another government agency), always verify the person's identity. Use the SEC's personnel locator, (202) 551-6000, to verify whether the caller is an SEC staff member and to speak with him or her directly. You can also call the SEC at (800) SEC-0330 for general information, including information about SEC enforcement actions and any investor claims funds ... MADOFF CLAIM FORM UPDATE - The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms, and the court-appointed trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS) of New York, NY, issued the following joint statement this week: "... Trustee Irving H. Picard mailed on Friday (January 2, 2009) the following: over 8,000 customer claim forms, with detailed instructions for the completion and filing of the forms with the trustee; claim forms and related information to general creditors of BLMIS; and claims filing information to brokers and dealers ... The published notice provides information regarding the claims process, including instructions on how, where and by when to file a claim." ... 5 FINANCIAL NEW YEAR’S RESOLUTIONS - With the holiday season officially underway it can be easy to spend most of your "financial thinking" on all of the holiday gift-giving, traveling and entertaining you will, or would like to be able to, do. TomorrowsMoney.org is highlighting five simple things that you may want to consider doing to tie up some financial loose ends and take advantage of a few savings opportunities over the next 4-5 weeks to help get you started on the right foot in the New Year. First, use your flexible spending or health care spending account savings. Second, contribute to your retirement savings plan. Third, bank any year-end bonuses or gifts. Fourth, make a tax-deductible charitable gift. And fifth, get a jump start on your financial New Year's resolutions ... PROTECTING SENIORS: OVERSIGHT OF EQUITY-INDEXED ANNUITIES - The Securities and Exchange Commission approved a new rule to help protect seniors and other investors from abusive practices that can occur in the sale of equity-indexed annuities. Equity-indexed annuities, first introduced in the mid-1990s, have grown significantly over the years. In 2004 alone, sales of equity-indexed annuities increased more than 50 percent to approximately $23 billion. Equity-indexed annuities are often sold to seniors and can lock up older investors' money for more than a decade. The rule that the SEC approved today sets out the standards for determining when equity-indexed annuities are considered not to be annuity contracts under the securities laws and thus subject to the investor protections against fraud and misrepresentation, limiting the potential for sales practice abuses in the promotion of equity-indexed annuities to older investors ... MADOFF LIQUIDATION PROCEEDS - The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms, announced on December 15, 2008 that it is liquidating Bernard L. Madoff Investment Securities LLC of New York, NY, under the Securities Investor Protection Act (SIPA). SIPC filed an application with the United States District Court for the Southern District of New York for a declaration that the customers of Bernard L. Madoff Investment Securities LLC are in need of the protections available under the SIPA. SIPC President and CEO Stephen Harbeck said: "Upon information provided by the United States Securities and Exchange Commission and the Financial Industry Regulatory Authority, it is clear that the customers of the Madoff firm need the protections available under federal law." Mr. Harbeck cautioned, however, that the scope of the misappropriation and the state of the defunct firm's records will make this more difficult than in most prior brokerage firm insolvencies ... AFFINITY FRAUD INVESTOR ALERT - National Futures Association (NFA) has issued an Investor Alert to help individuals avoid becoming victims of fraudulent investment offers targeted to specific ethnic communities, religious organizations and social clubs. This problem - known as "affinity fraud" - appears to be more prevalent today. In many cases, affinity fraud is conducted as a classic Ponzi scheme. The fraudster pays out high dividends to early investors using funds received from customers who sign up later in the process. The early investors with the illicit pay-outs then promote the investment offer to their friends and family, allowing the con artist to continue the scheme -- right up to point where the whole house of cards collapses ... MORE CREDIT RATING AGENCY DISCLOSURE - The Securities and Exchange Commission approved a series of measures to increase transparency and accountability at credit rating agencies, and ensure that firms provide more meaningful ratings and greater disclosure to investors. The new measures impose additional requirements on credit rating agencies, whose ratings of residential mortgage-backed securities backed by subprime mortgage loans and of collateralized debt obligations linked to subprime loans contributed to the recent turmoil in the credit markets. The SEC also proposed additional measures related to transparency and competition concerning credit rating agencies ... HELP FOR “SANDWICH GENERATION” - The North American Securities Administrators Association (NASAA) announced a new investor education program to provide members of the "sandwich generation" -- adults who are raising children while taking care of aging parents -- with the information and tools they need to be financially prepared and protect their assets from fraud. An estimated 16 million sandwich generation members face the financial challenge of balancing their own economic needs with those of their families. NASAA's "Sandwich Generation: Caught in the Middle" outreach program is designed to help adults facing the pressure of these competing financial responsibilities ... RETIREES: WHEN TO WITHDRAW BONDS - Retirees with a portfolio of stocks and bonds face a tough decision: In what order should they withdraw their assets to pay for retirement in order to best extend the life of their portfolio? Should they sell off their stocks first, their bonds, or a combination of stocks and bonds? Usually, withdrawing bonds first extends the life of a retirement portfolio longer than the other two strategies-but for today's retirees, a bonds-first strategy is "not worth the risk," according to a study in the November 2008 Journal of Financial Planning, published monthly by the Financial Planning Association (FPA) ... SMART INVESTING FOR ARMED FORCES - A new guide to smart investing that is specifically targeted to members of the Armed Forces is now available. The brochure, called "A Salute to Smart Investing," was funded by a grant from the Investor Protection Trust (IPT). It provides an overview of savings, using credit wisely, basic investing strategies, common types of fraud, and danger signs of which all investors should be aware ... STICKING WITH INVESTING BASICS - The current turbulent financial markets can be a real buying opportunity for investors who know what they are doing, says BetterInvesting. BetterInvesting's veteran members have weathered many economic cycles, and they are sharing their market experience with other members and the general public. "We saw many investors who invested heavily in dot-coms in the late 1990s and lost significant amounts when the bubble burst in 2000. Before the dot-com crash, 'experts' said our investing methods were out-of-date," said Bonnie Reyes, president of BetterInvesting. "However, the fundamentals of our investing philosophy and the market itself ultimately held true, and the stock of companies without earnings fell fast and hard." BetterInvesting is highlighting several basics of investing that investors should stick with ... PICKING UP THE PIECES - What should investors worried about market volatility and facing the prospect of reduced assets for retirement do? Where do you turn for help if you face difficulty in the current market downturn and credit crunch? The nonprofit Alliance for Investor Education (AIE) is responding to those concerns by outlining 12 of the best Web-based resources for investing in uncertain times. The Alliance's new Picking Up the Pieces: What Investors Need to Know in Tough Times" is available now ... BE STRONG: OPEN ACCOUNT STATEMENTS - Especially in a down market, investors may be tempted to try and avoid the trauma of seeing the reduced value of their holdings by not opening their statements for their brokerage, mutual fund, or 401(k) or other retirement plan accounts. It has even been suggested that avoiding looking at your statements may be a good way to respond to turbulent financial times. This advice may be comforting but ignoring your statements can blind you to problems in your accounts. No one can protect your accounts like you can, and so you need to open your statements and see what is going on in your account. A new investor podcast from FINRA explains why it is important to continue to pay attention to your account statements ... MARKET DOWNTURN PHISHING SCAMS - According to the Federal Trade Commission (FTC), the upheaval in the financial marketplace may spur scam artists to "phish" for your personal information. If the recent changes in the financial marketplace have you confused, you're not alone. Phishers (pronounced "fishers") may send attention-getting emails that look like they're coming from the financial institution that recently acquired your bank, savings and loan, or mortgage. Their intent is to collect or capture your personal information, like your credit card numbers, bank account information, Social Security number, passwords, or other sensitive information ... INVESTOR ALERT: MONEY MARKET FUNDS GUARANTEE - The Financial Industry Regulatory Authority (FINRA) wants to make sure the investing public understands the U.S. Treasury Department's Temporary Guarantee Program for Money Market Funds. The Treasury Department's program, which opened Sept. 29, protects money held in participating money market funds as of Sept. 19 if those money market funds "break the buck." A money market fund breaks the buck when its net asset value (NAV) falls below $1.00 per share. Investors cannot sign up for the guarantee program on their own ... PREYING ON MARKET FEARS - The North American Securities Administrators Association (NASAA) cautioned Main Street investors against making sudden and uninformed decisions amid the ongoing market volatility and unprecedented turmoil on Wall Street. "We know from past experience that con artists follow the headlines to prey on the worries and fears of everyday investors," said NASAA President and Colorado Securities Commissioner Fred Joseph. "With the current economic situation, state securities regulators are concerned that scammers are gearing up to promote various investment schemes with promises of big returns. If history is any guide, these investments will be worth less than the paper on which they are printed." NASAA also offered several tips for investors ... SCAM WARNING FOR IKE VICTIMS - While natural disasters elicit financial donations and support from people across the country it also, unfortunately, creates an opportunity for con artists - those who may try to swindle you out of your money or scam you by offering fraudulent services. Do not give out your personal information or money to anyone without proper identification or proof they can do what they say they can. If someone approaches you and cannot provide appropriate identification, go to a disaster assistance site and ask for help. TomorrowsMoney.org recommends that you get copies of all financial transactions and commitments in writing and keep a small notebook to write down the names and contact information of people with whom you speak during this critical time of recovery and rebuilding ... TURBULENT MARKET ALERT - Given the turbulence affecting the financial services industry these days-including recent announcements concerning Lehman Brothers-you may be wondering what would happen to your securities account if your brokerage firm closed its doors. In virtually all cases, when a brokerage firm ceases to operate, customer assets are safe and typically are transferred in an orderly fashion to another registered brokerage firm. Multiple layers of protection safeguard investor assets. For example, registered brokerage firms must keep their customers' securities and cash segregated from their own so that, even if a firm fails, its customers' assets will be safe. A new Financial Industry Regulatory Authority investor alert helps investors understand the protections provided under federal securities laws to safeguard investor assets ...... INVESTOR ED ON YOUR IPOD - The Financial Industry Regulatory Authority (FINRA) today launched a new series of Investor Podcasts that provides unbiased information on a variety of financial issues in an easily accessible format. The podcasts are available on FINRA's Web site and on iTunes. New podcasts will be added to the series every month to provide investors with topical and timely investment information. The first three installments of the podcast series are now online ... NEW LEADERS AT AIE - Dallas Salisbury is the new president of the Alliance for Investor Education (AIE), a nonprofit consortium of 19 leading U.S. organizations involved in investor education. The other newly elected AIE officers are: Joy Howell, vice president; John Gannon, secretary; and Gloria Talamas, treasurer. Salisbury also serves as the president and CEO of the Employee Benefit Research Institute (EBRI) and chairman of the American Savings Education Council (ASEC) ... LOAD VS. NO-LOAD MUTUAL FUNDS - Mutual fund investors should avoid unnecessary charges whenever possible. In most instances, <the easiest approach is to 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, according to the American Association of Individual Investors ... REVERSE MORTGAGES AND SENIORS - If you are in your sixties, and own your home, chances are you have heard about reverse mortgages-or will soon. Some financial institutions are aggressively marketing reverse mortgages as an easy, cost-free way for retirees to finance lifestyles that can jeopardize their financial futures. A new podcast from FINRA tells you what you need to know to avoid a reversal of fortune ... UNDERSTANDING SOVEREIGN WEALTH FUNDS - A sovereign wealth fund (SWF) is a government-owned enterprise that invests a portion of its country's foreign-exchange reserves in global financial markets. According to PathtoInvesting.org, SWFs are controversial, in part because their investment strategies, portfolio holdings, and returns are generally secret and in part because of the concern that the sponsoring countries could exert substantial economic pressure on the companies and countries where they invest. ... SEC 'RETIRES' SCHEME - The Securities and Exchange Commission (SEC) has obtained emergency relief to stop an allegedly fraudulent scheme that raised over $7.2 million from investors who were told the money would be used in a business shredding and recycling used tires. However, as alleged in the SEC's complaint, the tire shredding equipment did not work, there was no reasonable basis for purported income and return figures, and the investors never received a dime from their investment ... 401(K) DEBIT CARD INVESTOR ALERT - A number of companies are beginning to offer a "401(k) debit card" to employees who invest in 401(k) retirement programs. A 401(k) debit card allows you to borrow up to $50,000 or 50% of the value of your retirement plan, whichever is less, through use of a debit card. The Securities and Exchange Commission recently released an investor alert to make consumers aware of the factors they need to take into consideration before using one of these cards ...
RELAUNCH OF HELPFORINVESTORS.ORG - In order to make it as easy as possible for investors in trouble to find the help they need quickly, the 19-member Alliance For Investor Education (AIE) has launched an updated version of the "one-stop information shopping" site at http://www.HelpForInvestors.org to pull together 14 key links into a single Web page. The easy-to-use list shows investors where to check out financial professionals, how to report investment fraud, the best help for dealing with other major problems - including broker bankruptcies, identity theft and 401(k) claims - and filing arbitration and mediation claims ... TAKING TOO MUCH CREDIT? - Not so long ago, those who faced a temporary financial setback, such as the loss of a job, a health emergency or an unexpected expense, could borrow or use credit to get by - and many American still do that. But while some Americans use credit as a safety net to weather life's occasional storms, others rely on it as a way to finance a lifestyle they otherwise could not afford. Troubling trends include investors leveraging or prematurely depleting their retirement savings, trading in their insurance policies in transactions known as "life settlements," and tapping their home equity through reverse mortgages. FINRA is concerned that some investors may be risking their most valuable assets in an effort to raise cash quickly-including those in or near retirement, who may not have time to recover their losses ... NATIONAL SAVE FOR RETIREMENT WEEK - Recognizing that Americans are living longer, the cost of retirement continues to rise and that many workers may not be aware of the need to save for retirement or of all their options, Congress passed H.Res. 1294 in late June. Bill sponsors Cong. Allyson Schwartz (D-PA) and Cong. Sam Johnson (R-TX) mentioned Employee Benefit Research Institute (EBRI) research in their floor speeches. EBRI supported National Save for Retirement Week October 19-25, 2008 and will work to promote the ideals behind the Week ... EARLY RETIREMENT SEMINAR SCAMS - FINRA and the International Foundation of Employee Benefit Plans are launching two online resources to help companies and their older workers protect themselves from early retirement scams. Help Your Employees Achieve Their Retirement Dream: Tips for Spotting Early Retirement Scams offers tips on how to evaluate early retirement seminars with an investment angle. Early Retirement Seminars 101: Smart Tips for Spotting Retirement Scams, alerts employees to the pitfalls of early retirement schemes ... HOT SUMMER INVESTMENT SCAMS - As summer approaches, the North American Securities Administrators Association warns that scamsters are using every trick under the sun to separate unsuspecting investors from their hard-earned dollars. State and provincial securities regulators caution investors to "screen" for hot energy-related tips, speculative real estate promotions, unsolicited invitations from new online "friends," and complex, opaque investment products that fail to offer clear disclosures of their risks and costs ... 401(k) DEBIT CARD PITFALLS - FINRA has issued an alert to inform investors about the potential pitfalls of 401(k) debit cards. Many Americans tap their retirement savings before they retire, potentially harming their efforts to provide for a financially secure future. The 401(k) debit card is often marketed as ideal for employers whose workforce include young, seasonal, transitory, or union workers. Although they may seem to be an attractive feature of some 401(k) plans, taking money out of your retirement savings, even for a short period of time, can have enormous repercussions for your retirement security -- particularly if you never put the money back ... SUBPRIME MORTGAGES 101 - A Federal Reserve survey shows that 53.7 percent of African Americans who took out mortgages to buy homes in 2006 used higher-cost loans -- often subprime adjustable-rate mortgages -- compared with 17.7 percent of whites. The National Endowment for Financial Education, through a grant to Hampton University, hopes to reverse that trend. The grant, awarded in 2004, created and provided financial education workshops for low-to-moderate income families and individuals, primarily those in the African-American community ... EMERGENCY ACTION TAKEN - The Securities and Exchange Commission recently announced that it has obtained an asset freeze and other emergency relief to protect investors whose funds were at risk due to fraudulent misconduct at a Longwood, Fla., based general securities and clearing brokerage firm. The SEC requested the relief when it filed a complaint on May 27, 2008, against North American Clearing, its founder and director Richard L. Goble, its president Bruce B. Blatman, and its former financial and operations principal Timothy J. Ward, charging them with fraud and other securities laws violations. The SEC's complaint alleges that the defendants engaged in illegal activities, including the misuse of customer funds, in order to hide North American Clearing's financial problems and to pay for its daily business operations. ... BEWARE 'PHONY REGULATOR' SCAMS - FINRA issued an investor alert to warn non-U.S. investors that scammers are using fraud-including setting up phony "regulator" Web sites and fake identities-to separate you from your money. Some scammers have misused FINRA's name and impersonated FINRA employees in email correspondence in an apparent attempt to lend legitimacy to their schemes. The scam generally begins with a phone call offering to pay you an enticingly high price to buy shares of stock you own that are virtually worthless (sometimes referred to as "non-performing"). To take the "deal," you are asked to send a fee in advance to pay for their services. Once your money is sent, you never see it -- or any of the money from the deal -- again ... 10 SMART TAX REFUND MOVES - Nearly 75% of all Americans will get a tax refund this year, averaging nearly $2,500. Do you anticipate receiving a refund? If so, don't just rush ahead and spend it. TomorrowsMoney.org has 10 suggestions for how to use your tax refund to alleviate financial anxiety, prepare for your future and gain confidence about your financial situation ... NEW TWIST ON ID THEFT FROM LATVIA - Stock traders posing as employees of a non-existent Latvian brokerage firm appear to have stolen personal information from individuals who thought they were applying for a job through Craigslist. According to the Securities and Exchange Commission, these traders allegedly used the job applicants' Social Security numbers, dates of birth and other information to open up online brokerage accounts. FINRA urges investors -- when conducting any activity on the Internet -- to always check out anyone who asks for your personal information ... WORK RETIREMENT PLANS: GATEWAY TO MUTUAL FUNDS? - Employer-sponsored retirement plans are increasingly the gateway to mutual fund ownership, according to a new report from the the Investment Company Institute. The report, "Characteristics of Mutual Fund Investors, 2007," also noted that nearly three-quarters of U.S. households list saving for retirement as their primary financial goal. Equity funds are the most popular type of fund, owned by four of five mutual fund-owning households ... INVESTING IN TURBULENT TIMES - Some investors are losing sleep at night as a result of ongoing market volatility and recession worries. The nonprofit Alliance for Investor Education (AIE) responded to those concerns by highlighting eight of the best Web-based resources for investing in uncertain times. The Alliance's new "Tips for Turbulent Times" is available now ... INVESTING TIPS ONLINE - MoneyTrack, the public television series funded by the Investor Protection Trust, has just announced it will now be reaching an additional online audience of 14 million a month through an agreement with MSN Money. MoneyTrack teaches viewers the basics of saving and investing by featuring real people's experiences as case studies and translating their lessons to the viewers through the guidance of its hosts and experts such as John Bogle, Ben Stein, Michelle Singletary, Jonathan Pond and even investing legend Warren Buffett ... MUNI BONDS 101 - The Investment Company Institute has provided detailed background information on municipal bonds ("muni bonds"), which are debt securities issued by state and local governments, or their authorized agencies, to borrow or raise money for public purposes such as building schools, highways, or hospitals. Municipal bonds are known as tax-exempt bonds. Because they offer tax-free income, municipal bonds generally have annual yields below those of corporate bonds or U.S. Treasury bonds ... PROTECTING BROKERAGE ACCOUNT ASSETS - In the wake of recent turbulence in the financial markets, the North American Securities Administrators Association (NASAA) today joined with the Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms, to remind investors of the important and effective safeguards already in place to protect brokerage account assets ... BEAR STEARNS Q&A - The Securities and Exchange Commission this week issued answers to frequently asked questions from investors regarding Bear Stearns. Bear Stearns' corporate structure includes several broker-dealers registered with the SEC. As a result, many protections remain in place for customers of Bear Stearns' broker-dealers. Under SEC rules, registered broker-dealers must maintain net capital to provide financial resources so that if the firm fails, customers will get their cash and securities back ... RETIREMENT MYTHS & MISCONCEPTIONS - Retirement is a passage from one lifestyle to another. Those who take the voyage seriously and do the right kind of retirement planning usually have a smoother trip. Discussions with seasoned retirees indicate that there are many myths and misconceptions about retirement. One example: Some people, including women, continue to believe that only men retire. This misconception ignores the career women who have the same retirement adjustment problems that men have. For more myths and misconceptions about retirement, see Michael Leonetti's article from the AAII Journal ... GUARDING AGAINST ID THEFT - The Securities and Exchange Commission is moving ahead with amendments to Regulation S-P, which sets forth privacy obligations for entities regulated by the Commission. The amendments would help safeguard customer privacy by providing more detailed standards for information security programs. "Today's proposal should help guard against growing problems such as identity theft and intrusions into online brokerage accounts," said Erik Sirri, director of the SEC's Division of Trading & Markets. ... IT'S AMERICA SAVES WEEK - From EBRI: A national survey shows that about half of all U.S. households report adequate savings progress. Only 53 percent say that they save at least 5 percent of their income, while only 57 percent of those not retired say they are saving enough for a retirement with a "desirable standard of living". The survey was released this week during the second annual America Saves Week, in which more than 80 major governmental, non-profit, and industry organizations are participating. The survey includes questions that make up a "savings checklist" found on the new America Saves Week Web site ... DIVERSIFY TO PROTECT YOUR WEALTH - One of the biggest mistakes that investors make is holding onto an over concentrated position in one stock, according to the Financial Publishers Association. Many people do this because they work for, and are shareholders of, a particular company that they know well. Or they bought a particular stock 10 or more years ago when they fell in love with it. Under both scenarios, capital gains taxes can be a huge issue. This article from Zack's Investment Research urges you to diversify, because you never know when you will be sitting on another Enron ... CHECK SCAM WARNING - The Commodity Futures Trading Commission has issued a fraud advisory about a check scam. It appears that a number of individuals have received possibly fraudulent checks for sums of money ranging from $3,500 - $4,000. These checks have been sent via UPS in an envelope with the CFTC cited in the return address. If you receive a check with the CFTC cited in the return address, immediately contact the Commission's toll-free Customer Protection Hotline, at 1-866-366-2382.... AVOIDING FINANCIAL ID THEFT - Your brokerage firm has an obligation to safeguard your personal financial information. But even the best procedures cannot prevent all instances of identity theft -- especially if the vulnerability lies with you, the customer. A new brochure, brought to you by FINRA and the Securities Industry Financial Markets Association (SIFMA), describes the critical steps you can take to safeguard your financial accounts and help prevent identity theft ... KIDS GUIDE TO MONEY - "Great Minds Think: A Kids Guide to Money" is a free, self-directed activity book from the Federal Reserve that teaches the basic concepts of financial decision making in a fun way. Topics include earning, spending, saving, and opportunity cost. The activity book also includes a certificate so children can celebrate when they complete the activities. The book is designed for youths ages 9 to 12 ... IT'S BUY AND HOLD ... NOT BUY AND FORGET - If you're a buy-and-hold mutual fund investor, it's easy to roll along owning shares in a particular fund for years. As long as the fund is performing at least in line with its benchmark index, there's little reason to make a change. On the other hand, buying and forgetting doesn't work. BetterInvesting suggests you ask six questions of your mutual fund regularly. Mutual funds, as with any other investments, require regular due diligence to ensure they're not running off the rails ... REBALANCE YOUR PORTFOLIO MORE OFTEN? - Looking more often for opportunities to rebalance your investment portfolio actually results in the need to rebalance less frequently than traditional methods, yet produces lower risk and better returns, according to research in the January 2008 issue of the Journal of Financial Planning, published by the Financial Planning Association (FPA). Rebalancing provides two potential benefits. The problem with traditional rebalancing methods such as quarterly or annually, according to the article, is that "the dates chosen for rebalancing are arbitrary, and thus we cannot possibly expect to catch the juiciest buy-low/sell-high opportunities." ... START NEW YEAR PLANNING TO PLAN - The start of a new year is the perfect time to evaluate your financial situation and plan for the future. The American Financial Services Association Education Foundation (AFSAEF) recommends creating a personalized plan to keep your finances on track throughout the year. The group offers several tips for creating a successful budget, such as planning for expenses that may not be monthly and contributing to an emergency fund. They also suggest avoiding common pitfalls, such as procrastination and setting unrealistic goals ...
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