892 articles · page 44 of 45
Companies with good corporate governance standards—those that avoided no poison pills, staggered boards, golden parachutes, and other practices favoring management—helped boost share prices, according to a new study by three university professors: Lucian Bebchuk of Harvard Law School; Alma Cohen of Tel Aviv University and Charles C. Y. Wang of Stanford. The study found that…
The 2008 financial crisis has assumed its role in economic and social history, and continues to get ongoing momentum from the severe recession it created, as well as the ongoing social protests. Yet while there has been extensive analysis of the misdirected and Frankenstein financial engineering which precipitated the recession, not much is known about…
First it was individual stock selection, than manager expertise, then investment styles (e.g., large-cap, small cap value), then asset allocation. Now, a new study shows that the industry fashion is alternatives, which is a general term for both alternative strategies (long-short, leveraged, or absolute return) and the foray into different sectors (commodities, real estate) or…
Corporations vs. Their Own Employees “Wall Street sort of lost its way, in that investment banking has become a function not of allocating capital properly, but levering capital and levering the returns on capital as opposed to transferring capital to productive industries.” –Bill Gross, CEO, PIMCO, as reported by Reuters, Bill Gross’ astute comments…
From the perspective of individual investors, revenue sharing is the Trojan Horse of the mutual fund industry. That means most investors have no idea that when they buy an actively-managed load fund, with its implied promise of above-average returns, they are also buying a package driven by 12b-1 fees and revenue sharing deals that they…
Most of the discussions about the need for greater transparency in financial transactions have centered on the need to adopt greater fiduciary responsibilities. But there is also another reason: economic. Or, more specifically, mutual funds benefit financially from the lack of transparency. When fund companies make it difficult for investors to choose…
The SEC has recommended that investment professionals providing personalized advice to retail customers follow a fiduciary standard of care, according to a SEC staff report sent to Congress on January 21. The long-awaited staff report recommends that the SEC commissioners write regulations to create a fiduciary standard for broker-dealers, which is about the same as…
Note: This article was originally published in July 2010. Investors are still waiting for a decision. After decades of wrangling, false starts, and back room intrigues, it looks like the SEC is finally addressing the long-over due, critical issue of mutual fund fees. Today, these fees charged to fund shareholders amount to $12 billion, according…
Master limited partnerships offer tax advantages that can be useful to investors.
Don’t always assume your financial planner is always working for the best interests of their clients.
A new study examining the income sources for Americans over age 65 shows more people are relying on Social Security for their retirement income, while income from jobs has remained consistent since 1962, according to a new study by the Social Security Administration. The study found that 38% of Americans over age 65 in 2009…
The current long recession is changing American spending behavior. Based on Bureau of Labor Statistics data from 2007 and 2010, Americans have reduced expenditures on luxury items (restaurants and clothes) and more on essentials (healthcare, fuel.) The data shows that consumer spending by family unit declined by 3% to $48,109, while average prices over the…
Senior mortgage and banking officials were never legally punished, despite the thousands of cases of mortgage fraud identified by the FBI.
Wage-based incomes continue to decline, according to the U.S. Commerce Department’s April 2011 report. Using data from February 2011, the report found that wages, benefits and salaries accounted for 75% of total personal income in 1970. This fell to 67% in 2005 and to 64% in 2010. At the same time, spending from the middle…
While the 401(k) movement has been going strong for the past 30-plus years, it now looks like the investment managers who were administering the funds and providing the advice have been engaged in a conflict of interest with their company plan counterparts. At least that is what the U.S. Department of Labor’s Government Accountability Office…
In a global economy, the world’s central banks have become increasingly intertwined and interdependent. This often creates interesting confrontations, especially when they are public. This is what makes this Bloomberg news article interesting. Since this article was published in June 2011, Europeans have imposed some salary caps on their top CEOs, yet that discussion has…
One of the biggest problems facing the mutual fund industry’s relationships with its millions of shareholders is justifying fund wholesalers’ salaries. This is a contentious and sticky issue for a few reasons: First, mutual fund wholesalers really don’t add anything that directly benefits shareholders, especially their net portfolio returns. Second, maintaining a…
Of all the astronomical numbers associated with the financial collapse–$8 trillion in lost housing equity from 2001 to 2008, and the $4.7 trillion bailout program–perhaps the largest economic cost of the long-running recession comes from the wasted talents of millions of unemployed Americans. With the official rate of unemployment running at 9%, which translates into…
Most mutual fund shareholders don’t know what they are being charged for their mutual funds and more importantly, why these expenses are critically important. In normal economic times, when the the economy is healthy, fund fees erode your investment returns, but they are offset by the investment gains. The fees are still significant, and in…
There are over 7,393 mutual funds and about 3,500 ETFs listed in the U.S., and virtually all charge fees to shareholders to help offset their operating expenses. This is considered an average cost of doing business. Thanks to competition from ETFs and pressure from investors seeking lower fees and expenses, the average annual mutual fund…
