Posted on Tuesday, May 5, 2009 - by Henry Walter
Stable Value Funds
The ink was hardly dry as we posted an article on April 3rd with the title “How Safe is the Fixed Income Fund? An Update” when new articles appeared in both the Wall Street Journal and Barron’s on stable-value funds.

We think both articles are worth reading if you have a big stake in the Fixed Income Fund. Fund D may be perfectly safe, but you should be aware of some of the issues cropping up in stable-value funds in general. (Frankly, we don’t know how safe the fund is, so we regularly remind participants that all investments entail risk, and that it is unwise to have all your eggs in one basket.) Here is how you can access the articles.

The Wall Street Journal article was in the Friday, April 3rd, 2009 issue, on page C1. The title was “Stable Value? Chrysler Fund Shows Woes Still Lurking”. Either go to your local library or Google the title.

The Barron’s article was in the April 6, 2009 issue, page 26. The title “Don’t Judge This Strategy By Its Name”. You can buy Barron’s at Wegmans and other fine stores or Google the title.

In the past it has been difficult to analyze the Fixed Income Fund because of its lack of transparency. We learned a lot about how stable-value funds operate from these two articles.

We are often asked for alternatives to the Fixed Income Fund, a question difficult to answer, but we did make some suggestions in our posting on October 22, 2008.

Here is a different point of view from Charles Kirk a well-known trader and publisher of The Kirk Report ( www.thekirkreport.com ) .

“I don’t own any stable-value funds because I have never wanted to ‘trust an insurance company’ to stay in business for me to have a good retirement. I use CDs, TIPS, GNMAs, Treasuries and a total bond fund for my core and explore portfolios. Why take excessive risk in the fixed income part of your investment portfolio when your rewards are only a few extra points of return above the safe investments I prefer? I take the risk in the stock market where the upside is unlimited!”

One final note. Investors with most of their money in Fund D since mid-2007 must feel pretty good as they compare their performance (say +5%) to those who invested in a diversified portfolio (maybe -20% or worse). But don’t confuse safety and performance.

For questions or additional information on this blog entry, please contact us.

Posted on Friday, April 24, 2009 - by Katie Tkaczyk
All About Variable Annuities
The Securities and Exchange Commission has published a very helpful discussion of Variable Annuities: what they are and how they work. If you would like to look into them, here is the link: www.sec.gov/investor/pubs/varannty.htm.

If you find you have further questions, please feel free to ask me or Scott Klatt for some explanation. Just click on our contact line, under Advisors. We hope to hear from you.

For questions or additional information on this blog entry, please contact us.

Posted on Wednesday, April 22, 2009 - by Henry Walter
FINANCIAL SAFETY & SECURITY – A SAFETY QUIZ
Fraud is always present so we need to be continually on guard, but in recessionary times it increases as people become desperate. Victims are often older people especially widows who are taken advantage of by not only con artists but by so-called legitimate businesses like banks and brokers. Sophisticated investors are often victims too. Just look at the lists of Bernie Madoff and the Stanford Group victims which include a number of prominent investors who should have known better like Mort Zuckerman and Steven Spielberg. Younger people are also often victims, but the dollar amounts are smaller and there is ample time for them to recover.

Your writer learned his lesson when he was 18. At a railroad station a well-dressed, well-spoken man approach him and asked for help, a $20 loan, big money in those days. He claimed his wallet had just been stolen and he didn’t have enough money to get home. As soon as he got home he would repay the loan and he offered his business card. Your writer handed over the $20, and never saw it again. After he waited a few days for repayment, he checked out the address on the card and found there was no such residence. Some of you probably had similar experiences. A valuable lesson.

Here are a few ideas to protect your safety and security. First, take this safety quiz.
It’s fast, easy and the smart move. 14 short questions will rank if your daily habits are keeping your identity safe or putting you at risk. Of course, you have to be honest with your responses.

Your writer recently took the test and scored 20. A perfect score is 0 and the worst possible score 100. Your writer, who believes he is safety conscious, learned a lot.

To take the quiz open: http://www.idsafety.net/quiz1.asp

While you are at it, don’t forget to order your free credit reports (free every 12 months) from Equifax, Experian and Transunion. To order, visit www.annualcreditreport.com or call 1-877-322-8228. You can also order by mail from Annual Credit Report Service, P.O. Box 105281, Atlanta, GA 30348-5281.

If you want to go further, retrieve and read “2009 Identity Fraud Survey Report: Consumer Version” by Javelin Strategy & Research. Just Google the title and click on the first item that comes up. The report is 22 pages long and includes lots of good information on how to protect yourself.

We hope the above is helpful. If you have any comments, suggestions or questions, you can contact the writer directly at sip@frontiernet.net.

For questions or additional information on this blog entry, please contact us.