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Subject: mutual funds

A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. The mutual fund will have a fund manager that trades the pooled money on a regular basis. The net proceeds or losses are then typically distributed to the investors annually.
Since 1940, there have been three basic types of investment companies in the United States: open-end funds, also known in the U.S. as mutual funds; unit investment trusts (UITs); and closed-end funds. Similar funds also operate in Canada. However, in the rest of the world, mutual fund is used as a generic term for various types of collective investment vehicles, such as unit trusts, open-ended investment companies (OEICs), unitized insurance funds, and undertakings for collective investments in transferable securities (UCITS). (Wikipedia Jan 2010)

As goes January?

Foreigners and funds buy US stocks

Market clockwork from former times

Foreign investors and mutual fund shareholders were the primary buyers behind the Bear Market Recovery of 2009. Stock buybacks had disappeared, a significant modification in investor/issuer behavior that had been seen since 1982 and SEC Rule 10b-18.

The rally hit a peak in January 2010, reminding many of the saying, “As goes January, so goes the year”.

Baby Boomers' retirement threatened?

GAO favors overly-optimistic projections

Implanting False Hope

In a study of the effect of the retirement of Baby Boomers on the price of equities, the GAO assumed that equities will provide real returns of 7% over the next decades. This figure is often cited in Wall Street promotional literature, but has no scientific basis.

Baby Boomers whose retirement plans are predicated on a 7% return on equities may find out, too late, that they have been misled by marketing flim-flam.

2000-2005

Stock values and cash dividends wither

Investors Forsaken by the SEC

Wall Street ballyhoo and flim-flam to the contrary, the year 2005 closed-out half a decade of misery and pain for the average investor in US equities. Average cash dividend yields never surpassed 3.8% during the period, and most of this meager dribble, so grudgingly conceded by corporate boards, was consumed by taxes and management expenses of the open-end mutual funds.

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Featured articles on inside pages

Stock buybacks

Stock buybacks, refusing to die, live on

In Q1 2009, stock buybacks came back, driving up equity prices and sparking a rally by dominating a thin market. These equity repurchases were financed from depreciation and bond issues. More ...

Securities Analysis

Are investors being misled?

Mutual funds are sold primarily on the basis of 'performance' measured by historical 'total return'.The famous Morningstar 'star' rating system is based on 'total return', in this case 'risk-adjusted total return' relative to funds of the same asset category.
More ...

US Politics

What is the future of private pension plans?

Between 1999 and 2002, US private pension funds lost US$ 1.2 trillion in value. It would almost seem that pension fund managers had been speculating with retirement money, attempting to beat each others' short-term performance statistics, with little interest in safeguarding the assets of plan beneficiaries. More ...

US equities

Stocks surge on spurious earnings

In Q1 2009, stock buybacks came back, driving up equity prices and sparking a rally by dominating a thin market. These equity repurchases were financed from depreciation reserves and bond issues. More ...

US Bonds

The collapse of the dollar and US bonds?

The extreme spending of the Obama government, combined with irresponsible bank lending policies promoted by Barney Frank and Chris Dodd, portend rising interest rates, the collapse of the bond market, and the end of dollar supremacy. More ...

World Economy

Working off the US trade deficit

Foreigners hold $16.8 trillion in US financial assets as a result of selling more goods to Americans than they buy from them. Since the 'deficit' is in dollars, the US has no problem in 'paying it off'. More ...

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2010-11-05 15:03