Thursday, August 23, 2012

No Pot Luck Investing Will Help You With Great Returns | Illinois ...

I know from experience there is now a professional, well-trained elite, supported by large institutions, that is adept and willing to use corrupt practices to accumulate wealth. Despite assurances from game-theorists and anthropologists that the criminal cadre in the species remains a constant percentage over time.

I believe there is no way the counter-class made up of regulators, watchdogs and do-gooders and hack columnists can match wits with the predator class. Today?s piles of money are so huge, great fortunes can be amassed by swiping the tiniest of slices in the wiliest of ways long before picked pockets are discovered.

My guess is that financial historians will start the clock in this epoch with the big merger scandals of the 1980?s which includes Ivan Boesky, Michael Milken and scads of lesser cads. Next came the long running, now forgotten, S&L scandals. Then a lull (maybe), punctuated by the pretty picture of the tech boom. That delusional portrait was been redrawn when we learned of the rigged IPO?s, insider trading, completely corrupt ?analysis? practices at the Wall Street giants and old-fashioned flimflam.

So, pension funds were raided, an entirely legal scandal. And now we?re learning about the mutual fund grifting rampage that may affect Main Street as much as prior fiascos: Putnam, Alger Management, Bank of America, Morgan Stanley, Strong Capital Management, PBHG Funds, Bank One Corp., Alliance Capital, Janus Capital Group are some of the implicated names.

The slow down down of buying mutual funds is exaggerated. Funds have grown and adapted over their 80-year history and continue to meet investors? needs for diversification and professional management. Better tools to analyze and select funds mean CPA/financial planners can make better use of them in client portfolios.

CPA/Financial Planners have a variety of analytical tools they can use to make mutual fund recommendations. These include software, Internet databases and other online research tools that make it easier to compare and contrast funds, determine risk and provide in-depth information on a prospective purchase.

?The new after tax reporting is a much more effective way to allocate assets,? says Carl Kunhardt, CFP of Quest Capital Management in Dallas. ?There?s been too much public misinformation, and individual investors have been led to buy the highest performing funds but ended up with less return than a more conservative fund after taxes.?

Congress is considering legislation that would eliminate the need for mutual funds to distribute capital gains annually. Shareholders would instead pay taxes on gains when they redeem their shares. And the SEC has issued new regulations requiring accuracy in fund naming?a fund must invest 80% of its assets in its namesake.

It?s the CPA?s job to put new investment products to work for their clients. Quest Capital uses sector funds to add incremental performance to the overall portfolio. Carl Kunhardt, who chairs the firm?s investment committee, makes predictions on sector movements. He expected and received higher returns from the communication and technology sector funds he used in 1998 and 1999. In 2000 and 2001 his planners added real estate mutual funds and REITs to client portfolios.

Vanguard recently announced a deal under which Hamilton Lane will manage a fund-of-funds for Vanguard?s accredited clients. While private offerings of these popular new vehicles have minimum investments ranging from $500,000 to $10 million, mutual funds? funds-of-funds offer investors access for as little as, $50,000. The industry is, after all, set up to cater to smaller investors.

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Source: http://illinoissr22online.com/finance/no-pot-luck-investing-will-help-you-with-great-returns/

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