05/17/09 Rick and Susan Talk Mutual Funds

" Rick Schaffer Susan Kaplan is on Boston's -- evolution 96 not WTKK. Yeah welcome to another Sunday edition is an -- on radio --"

" JP with a two noon today. Taking your calls -- answer your questions about anything and everything having to do with money the queen of mutual funds the Einstein and invests best. Investment -- and English investing yourself in not -- not freeware up to five. Parallel universe is including northern New Jersey is here Susan Kaplan. Should be with the two -- today taking your calls and it's in your questions about anything and everything having to do with money and Paul to produce averages not here but old friend John parker who who have. It's a -- dude did you do the show John before you moved on to bigger and better things. Thank you for the government doesn't feel it but you did John parker who is want it as good as. -- The first are sponsored by first republic bank. All wanted to have a question about -- anything having to do money you give us callers 617822. When 969 pound forensics and different culture -- Martin's -- newsroom number two the most important rule here on the money show us that we take. -- When Susan gets through her financial and his sisters and we I'll -- topics we're gonna take power you missed ms. Kaplan and Hussein -- Susan and it's like a typical people down south -- ago missed or -- there in the use their first name me when I was in -- of it there in Atlanta mr. Lilly and Alice right. Things like that it by the way I I I am not going to have trouble figure out it's Saturday or Sunday since it's rainy I know it's --"

" The markets gave back a little this week. About between three and 4% so now a year today the Dow was down. About almost 6%. The S&P is down a couple and the NASDAQ is up six and a half it was up point nine but. -- we mentioned it's plastered this is this is actually good thing because this is like a normal market is that goes up in the people take some profit and it goes up than normal pullback apps -- On. But contrary to it people would say in never forget earlier this year when a caller called in and said. To niece Susan. Tell me now. Any mutual fund manager can earn anything at this time and I said to him. One stock in that fund goes up one dollar and he makes fun and it was so bleak at that time that you -- so angry and yes. You know we had some hostility in terms of telling people stay in the market and things like that and I get it sent it all ultimately about getting. In so what's what's becoming obvious to everyone now is that things are rebounding. But in addition to that. There what what no one really thinks about is why not a depression -- none of that is that we have many built in safe guides that didn't exist. In the nineteen yet there's a lot we didn't have unemployment insurance we didn't have social security and we didn't have FDIC insurance and so. That's huge in and -- the FDIC insurers may be the most important of a wall because you don't get these bank thank column runs in bank colonies -- what exactly. And more importantly is that Obama Geithner Bernanke. -- not Hoover Herbert who blurt Herbert Hoover Herbert walker. Andrew Mellon in Eugene Meyer who's that -- was the Federal Reserve Chairman. I'm from 1930 in 1933. And in stark contrast to that crowd who says let's see what happens if price instead were pouring money in and the also -- nice thing is Bernanke. Is a student. Of the great."

" Depression I'm I'm actually impressed by Bernanke and I I must admit and I ask you this I was not impressed by guy -- at the beginning yeah I -- the -- is a smart guy he's no Tony Stewart he just is a terrible public speaker that's the problem."

" Yep on the other lots of collateral things happen though that surprised people treasuries have tumbled in value why. Because now. Everyone's not just desperate for the safest investment in the world and now it's quite clear that other investments can offer. -- com and better returns and so you should know that in all of your individual lines including treasuries. Just because they dropped in value every single day they have a different value if they drop in value. He's that you hold them to immaturity and get all your money back it's not a reason to sell or anything like that is interest rates start to go up. Every single bond you have we'll drop in value its temporary guaranteed to get all your money back in the charity. Don't worry about it but that's the reason why we favor individual bonds to fund. Funds. There have been some new. Things on deck that you're going to beginning in your email box in your mailbox. And they're called commodity trading. Futures. And end the returns on commodity these crazy apps strategy now. Don't look good that it looks spectacular. The average managed futures program measured by the Barkley index. Who's up 14%. Last year what we can at that violent -- What you should know is that most of law the historical performance averages are based only on the results of those managers who choose to report their returns. The once or other business or down a 1000000%. Are not participating in this little island banged up and therefore. All the numbers you see I'm meaningless so another if you won tell us if you lost we ordered out exactly right we're -- county and in fact in there index something like they had something like 2% of the total points but even if it's successful. Fees on managed futures funds make mutual funds look cheap. They charged 2% management fee plus 20% of any profit. And then you pay your brokers went to 6% to get too in that fund could you can't get him by yourself. You have plenty of risk in the stock market we don't want to to buy any of these funky holding this is and it can really lose a lot the the investment. Sales community costly comes up with a new. Products to sell and most of whom are craft yet. Another line on the front page of yesterday's business section of the times. Staring out the right investment banks and basically the -- distilling. Many pages here. But basically what they say is you too dumb to do it and therefore. They have these things called portfolio solutions -- builder. And they have all these -- market writers. All of these places where you can't you and -- and plug it in an end and act like magic they'll tell you are exactly right. Because in the same article they talk about how all these -- strategy funds have not panda have not done right well have not kept. To their knitting and so now this is another thing. Do not let go of your investments period. -- dictate your standard of living for the rest of your life you have to be in he would not just going to turn over the reins. In anyway. And along those lines my last investment kind of issue here. The SEC talk about way too little way too late. Is now jumping into action in terms of regulation talk about the iron door being closed here."

" we you know we need back. And I wasn't a nice guy Joe Joe Kennedy Joe Kennedy who is who started the SEC was a great leader in the SE CBC -- all the BS that they were doing."

" The SEC commissioners voted five to zero yesterday in a proposal to subject 9000 investment advisors to annual surprise inspections. Of those money managers with direct custody of clients' holdings. News now. You don't want anyone else have direct custody of your holdings you want them to be held in any in in the fined around insured. Regulated controlled the brokerage account like. LPL financial is mine Fidelity's one -- well Maryland used to be England have been different. The point is you wanna be at a broker dealer and so because -- and should I I apologize for drug and shows that the F one of the problems and SEC does not know what they're doing this is another good example first of law that all these people including Madoff had custody of client holdings and -- subject to exams to begin with. Is ridiculous and now -- boy they're gonna be examined. I'm just doing away with they haven't figured out it's wrong you want your things held at a broker dealer because then. If you're adviser the adviser's firm. Vanguard the the fund everything goes out of business you're standing there holding what you're holding those are your holdings -- investments and you don't lose them. And therefore you have to be really careful in -- do any of these. The last sort of announcement of today is that the IRS's going after things as we know President Obama is not a fan of the wealthy. Holding all the money for their family and not paying proper taxes. Some of the jazzier estate planning techniques. Like grant her retained annuity to congrats -- these things she give away on your money by life insurance street places. And therefore are. It all works out there are now challenging them in their challenging. Family limited partnerships that fit the challenging a lot of these things if you're already in one. There's nothing you can do but hire good tax attorney and see what happens. But going forward. Especially in these very aggressive tax area I would."

" And -- this administration is clearly riveted. On this issue and I think Q could be sorry. During the show -- make comments and questions economy haven't specific mutual funds listeners to this radio show should consider the investment objectives risks charges and any applicable -- the investment company may impose for the security before investing. The fund's prospectus contains this and other information about the mutual fund and should be read carefully before making a potential investment. Mutual fund investing doesn't tail risk and you could experience a loss of principal he should consider consulting with a financial advisor prior to making any investment. The opinions voiced in the show up for general information only are not intended to provide specific advice or recommendations for any individual. To determine which investments made the appropriate for you consult with your attorney -- financial adviser tax advisor prior to investing. Securities in my officer offer to LPL financial member of the -- the SIPC."

" It is 617. Kids who want to recognize that a number. Found its its agriculture Verizon Wireless phone user we're gonna take a break when we come back and take calls on let's see. College related questions life insurance related questions. We haven't done as Susan hasn't -- one of her galactic -- famous make overs. But I'm gonna pick the 8235 years old or younger -- cage fighting is only your gives call and Susan will do whatever galactic reclaim -- make over."

" Also lately some people have been calling when you're away wreck on. If you want to know how do you stand in terms of your investments verses retirement what to learn things like that I can give these sort of a concept of value behind -- you ahead do you need to send our money."

" That sort of thing -- called one of those questions. -- questions I was asking SE for people if you look at it buys a -- sell home especially first time home are definitely -- call if you have been looking to refinance having trouble because you get. -- have enough equity in the new -- plus program is in full force of give us a call car related questions and if you got problems with money. -- trying to save as for weeks if you get problems with money actually say -- for years and you you don't have much money give us a call you don't have to be embarrassed people think all I have to have a ton of money called money shall not true so you fit into one of those categories gives calls to a 78221969. 969 free coffee Verizon Wireless phone user if you don't fit into one of those categories -- and old bulls will. Gets more later six point 782219269. 969 free coffee at Verizon Wireless phone user we'll take a break when we come back we'll go right to the phones. Here on the Sunday edition of the best money show on radio on Boston's talked evolution 969 WTKK."

" I need that kind of --"