The stock market boom of the 1990s, the proliferation of 401(k) plans and the mass use of mutual funds so greatly increased the number of Americans who own equities that a new demographic term was born: the investor class.
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 -- 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.
SEC-Mandated after tax reporting rules mean funds must report as a return what the investor actually takes home, not what the fund manager generates. This will make it easier for CPAs to compare funds because all will use the same reporting standards.
For most CPA/financial planners, ETFs and separate accounts, where planners place money directly with asset managers, live side by side with mutual funds. Quest Capital uses mutual funds for clients in tax-free or tax-deferred accounts and for smaller clients. Benjamin Tobias, CPA, CFP, CIMA, of Tobias Financial Advisors in Ft. Lauderdale, Florida, is wildly enthusiastic about ETFs. From nothing just three years ago, Tobias now has 35% of client assets in ETFs. But there are instances in which he doesn't use the new products
As originally conceived, mutual funds had serious flaws, some of which are described here. The industry responded. Total shareholder costs on equity mutual funds declined 40% over the last two decades, funds now come in every size and flavor and management has worked diligently to reduce the annual bite for taxable investors by lowering portfolio turnover.
Exchange-traded funds answer some tax and fee problems as well. With ETFs, investors don't realize gains until they sell their shares. Fees for the indexed versions are now averaging under 20 basis points compared with 100 basis points on traditional open-ended funds.
Before you can plan a mutual fund strategy, you need to have a clear picture in your mind of your goals as an investor. You also need to determine the amount of time you have to reach those goals. Investing is time-sensitive, so you will always need to factor time into any investing strategy.
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.
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 -- 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.
SEC-Mandated after tax reporting rules mean funds must report as a return what the investor actually takes home, not what the fund manager generates. This will make it easier for CPAs to compare funds because all will use the same reporting standards.
For most CPA/financial planners, ETFs and separate accounts, where planners place money directly with asset managers, live side by side with mutual funds. Quest Capital uses mutual funds for clients in tax-free or tax-deferred accounts and for smaller clients. Benjamin Tobias, CPA, CFP, CIMA, of Tobias Financial Advisors in Ft. Lauderdale, Florida, is wildly enthusiastic about ETFs. From nothing just three years ago, Tobias now has 35% of client assets in ETFs. But there are instances in which he doesn't use the new products
As originally conceived, mutual funds had serious flaws, some of which are described here. The industry responded. Total shareholder costs on equity mutual funds declined 40% over the last two decades, funds now come in every size and flavor and management has worked diligently to reduce the annual bite for taxable investors by lowering portfolio turnover.
Exchange-traded funds answer some tax and fee problems as well. With ETFs, investors don't realize gains until they sell their shares. Fees for the indexed versions are now averaging under 20 basis points compared with 100 basis points on traditional open-ended funds.
Before you can plan a mutual fund strategy, you need to have a clear picture in your mind of your goals as an investor. You also need to determine the amount of time you have to reach those goals. Investing is time-sensitive, so you will always need to factor time into any investing strategy.
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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