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 today's mainstream, sanitized, and institutionally sanctioned financial crime rackets are being run by a new breed of crook. There have always been scandals and crooks in the history of American money, but our predator class is a distinct creation of the late 20th century.
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.
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.
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.
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.
Glenda D. Kemple, CPA, CFP, principal and co-founder of Quest Capital Management, lauds Kunhardt's work in keeping her and the firm's other planners up-to-date on changes and new trends in mutual fund analysis. She emphasizes that these improvements haven't varied the firm's central focus. "We use quality fund families, look for consistent performance, long manager tenure and to minimize style drift," she adds.
I believe today's mainstream, sanitized, and institutionally sanctioned financial crime rackets are being run by a new breed of crook. There have always been scandals and crooks in the history of American money, but our predator class is a distinct creation of the late 20th century.
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.
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.
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.
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.
Glenda D. Kemple, CPA, CFP, principal and co-founder of Quest Capital Management, lauds Kunhardt's work in keeping her and the firm's other planners up-to-date on changes and new trends in mutual fund analysis. She emphasizes that these improvements haven't varied the firm's central focus. "We use quality fund families, look for consistent performance, long manager tenure and to minimize style drift," she adds.
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