Another Month in the Bag.
let go of another mutual fund and split the proceeds into Dow Chemical
(DOW) and Altria (MO) which about does it, I think. I set all
dividends to reinvest in more shares so while we are at lows we haven't
seen in a long time, I hope to pick up more shares at near historic
far, GE, MAS, RF, BAC, ABK and BGS have all paid out dividends in the
form of new shares. That's about the only positive note,
than the GNMA fund is performing nicely.
I suspect when the financial sector finally
turns around, the other sectors will follow suit.
XL are actually two stocks I have been trading in and out of
small profits. I currently have XL, which may take a while to
into positive territory again. At that point, I will buy some
|On My Own Now
Not that I haven't been for a year or two, but I couldn't see
Bob Brinker elected to do nothing while everything tanked
around us. During normal upsets, I don't to
anything but it
was clear to me at least (took a while) that this environment
anything but normal. I therefore elected to do something
In my opinion, if you sell the mutual funds on up
buy quality, dividend paying stocks on down ticks even at these
levels - you could be doing yourself a world of good.
And another thing about mutual funds, if you are holding them
taxable accounts - you could end up getting the double whammy
at the end of the year in the form of taxable distributions.
So to add insult to injury, not only will have your funds
to if not
40% more of their value - you will also get to pay Uncle Sam lots of
taxes on the fund distributions. That is not a pleasant
experience. This is worth giving some serious consideration
You can go on most fund sites or give them a call, and get
an estimate on the distributions the funds are going to pay out at the
end of the year.
I took a step backwards and had a look
at the stocks I bought and found what the value of those stocks would
had I owned them at the first of the year. If those stocks
to those values, I will have added almost 60% to the overall
value of the portfolio. In the meantime, I am collecting more
shares at cheap prices in the form of dividend distributions so
in theory, I should end up with even more.
I currently consider myself too young to be seriously looking at the
interest bearing side of the portfolio but in a couple years
when hopefully this economy has turned around and our community
organizer hasn't destroyed retirement plans by confiscating
same in return for a government guaranteed (why does this remind me of
annuities) plans, I will be adding a bond component
to lessen the volatility.
I am not going to spend a lot of time on this but it is something
frequently overlooked, especially those who choose to invest in
mutual funds. I can include myself in this.
a minute or two, and add up all those estimated costs of the funds you
own over the typical five year period. It can be an
eye opener. Add these costs to the taxes you pay on
in taxable accounts and then have a look at the dollars you
get to keep at the end. It may give you pause.
The absolute lowest cost is owning individual stocks or bonds but
unless you have sufficient assets, diversification can be a
The next lowest cost is exchange traded funds (ETF's), and then mutual
funds. You pay more in the form of management fees,
but you can get adequately diversified.
The most expensive are managed accounts. This can be in the
form of an adviser like Adam Bold and the Mutual Fund Store
which charges a wrap fee (a percentage of your portfolio), or
at the worst an annuity which can take you to the cleaners.
Adam Bold, Complaints about Same.
In retrospect this is not
but I have had a number of emails from customers of Adam Bold
his Mutual Fund Store franchise, expressing the
dissatisfaction of seeing their monies invested with same lose
50% or more in value. Most of these people had bad
with brokers and financial advisers and liked what they heard on the
Mutual Fund Store show, so they decided to give Adam Bold a try.
If you are looking at your portfolio and the considerable lack of
performance year to date, filing a complaint about
probably not going to do you much good. My advice would be to
stay with the portfolio recommendations for the near future because
bailing at this time is at best a 50-50 - proposition.
There are a couple things I could point out about Adam Bold and his
Mutual Fund Store as a reminder of what kind of business this is.
Of course, this is only an opinion but it is probably worth
doing some opining.
What Adam Bold charges for management of a portfolio is what is
commonly called a Wrap Fee. He charges 'a small percentage'
your portfolio for 'expert management'. The amount charged
with the amount one invests. The more the investment, the
the wrap fee. Bear in mind that just like mutual funds, he
his piece of the pie whether or not your account makes any money at all.
Here is some Franchise
The Mutual Fund Store version of
posture to my knowledge has never been one of going to cash.
Adam Bold does is select mutual funds with lower betas, in other words
he chooses funds which will be less volatile than the overall market.
For some reason and it is beyond my understanding, he will not
recommend GNMA's (Ginny Mae's). His commentary about same
caller calls in and mentions GNMA's, is along the lines of it
dumb and risky to invest in GNMA's and other bonds of this type with
interest rates so low because of the risk to net asset value.
This is ignorant and short sighted. Look at the
performance of GNMA's during the dotcom bust and the current trouble we
are in. Not much else, other than cash has been as safe as
GNMA. I took 33% of my wife's portfolio to GNMA's some months
and the only thing I regret is not doing it sooner.
If I was conspiratorial, I would say the reason he wants
to do with GNMA's is because that is a Bob Brinker favorite over the
years and he wants nothing to do with Bob Brinker picks.
anathema to the Adam Bold philosophy for 95% of investors.
opinion is that most investors are not adequately diversified if they
own individual stocks, taking on more risk than they should and I would
tend to agree with that. However, Adam Bold says the only persons who
be invested only in stocks should have assets in the millions
and on that point I disagree. A general rule of thumb is that
you have 25 stocks spread out through different market sectors with no
more than 4% in any one stock, you are diversified.
What is the lowest cost to your portfolio? Individually owned
How does Adam Bold and the Mutual Fund Store make their money?
They can't make any money off of individual stock ownership.
They generate their fees by managing assets.
The Mutual Fund Store - Filing a
I don't think the
customers would get anywhere by filing a complaint when it comes to
poor performance. The only exception to this in my opinion
be if a Mutual Fund Store counselor placed a customer's assets in the
wrong types of investments - investments which run contrary to the
needs, lifestyle and desires of a client.
An example of this would be putting a single 80 year old grandmother's
savings into a small cap aggressive sector fund specializing in Russia,
when she wanted a stable, safe portfolio for income
Adam Bold is not that stupid. I doubt his
The Mutual Fund Store - Is it
I would say that
if an individual is
not interested in managing his or her own assets, one could do far
worse than Adam Bold and the Mutual Fund Store. Purveyors of
cost annuity products and other predatory salesman would do
damage to to an investor's portfolio that Adam Bold's service ever
I like listening to the shows when I can. People call in with
interesting questions and once or twice I've picked up some mutual
funds I otherwise would not have known of. People
get educated about mutual funds, other types of
and an understanding of sharks swimming the waters, taking
advantage of the ignorant. He spends time with people,
the elderly who are about to or have fallen prey to the predators of
the investment world. In times of financial crisis, those out
generate commissions from investors by scaring them to death
into overdrive with their hype. It is nice to have someone out in
radio land speaking to the problem.
I would be most
interested in getting
some feedback from a few Mutual Fund Store clients in the form of the
general type of account they have (aggressive, long term,
retired) and the funds and their percentage allocations that make up
those accounts. I would have thought by now I would have seen
few typical portfolios on line somewhere, but they are elusive.
the hits on this page have been going up and up for the last last year.
I would guess it has something to do with the economy at large.
In 2009 I listened to quite a few Mutual Fund Store shows
and have been keeping track of the Adam Bold opinions about this
recession, and comparing that to my thoughts about same.
I have come to a few conclusions and will wrap them up in one generic comment:
Adam Bold has some pretty good advisers and I don't think they have been steering him wrong at all.
do think that investor risk or profit with the Mutual Fund Store
has to be filtered a bit through the prism of what is best for the
store itself, in that they make a profit first and then the best
interests of the customer are fulfilled within the framework of the
That however is probably true for most businesses in that if you can't make a profit, why stay in business?
is still better than getting sucked into fixed index annuities and
other financial schemes which promise to limit on your downside in
exchange for not being able to take advantage of any considerable
I am still interested in seeing a few examples of a Mutual Fund Store portfolio.
can get Cairn Terrier opinions until the cows come home but when it
comes to finance, information is tighter than a clam shell.
know where this comes from. For some reason, it has been
considered taboo for practically forever to share with your kids what
you generate for an income and what it truly takes to support the
lifestyle your kids are used to living. My parents were the same
Me, I took a different route. When the kids
were seniors in high school, they knew exactly how much I and my wife
made. Therefore, they also know exactly how much they would have to
make to support the lifestyle to which they were accustomed.
kids rapidly came to the conclusion that if they wanted to live the
life we currently live, more education was a requirement and not an
expensive afterthought to do in order to have that piece of paper which is considered important to those who do the hiring.
you are of this mindset, you are probably not doing your kids any
favors. They end up living in a fantasy land until all
those bills you currently pay, are theirs. Fantasy is big with
this latest generation as I have said before, Reality Bites.
The pain is
lessened if you introduce your kids to the world of financial reality
This circles back to the original request for
some portfolio examples. People won't talk about personal finance
and therefore do not educate others about about the things they did
well, and those things they did not so well.
Try doing something altruistic for a change. Talk to your kids about the real
world of finance. What they will remember is not the $$$ of
dollars you made or the $$$ of dollars you lost...........they will
remember that you cared enough about them to talk to them at all about
that taboo subject of family finance.