My Opinion On Investing
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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.
As the market turned down, the corporate crime spree didn't wane as some theorists said it should. Hot stocks, IPO's, M&A were no longer where the Willy Suttons with MBAs, Turnbull & Asser shirts and Patek Philipe watches saw the money. They saw it in those huge piles of money accumulated by working people for savings and retirement -- corporate pension funds, public pension funds, 401(k)'s and mutual funds. Who would notice a few mil or bil siphoned off in arcane late-trading deals? They'll never know what hit them.
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
Open-ended mutual funds still are around because they continue to serve investors' needs for diversification and professional investment management. They are growing because they can adapt to demands for improved products and because of newer, more sophisticated analytical tools available to the CPA/financial planners who recommend these funds. The new tools not only give investors a chance at better long-term performance, they also provide CPAs with an edge in using this investment product.
In addition to the efforts by fund management, CPAs are getting another boon in helping clients manage investment taxes. The SEC-mandated aftertax performance reporting will spread across the industry this year. CPAs will now be able to compare apples to apples because a fund is required to report as a return what the investor actually takes home after paying taxes, not what the fund manager generates.
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.
Article Source: Articlelogy.com
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