A Safe Port For Mutual Funds But Not You!

Soft dollars, a form of legal kickback, is a sly way you can get ripped off by mutual fund managers. Full service brokers give these kickbacks to non-indexed mutual funds in the form of a "rebate" to purchase research, software, and even computer equipment.

You pay for these soft dollars! In recent years, the SEC estimated that soft-dollar deals exceeded $1 billion. Typically, $1 accrues for every $1.60 of brokerage commissions paid. Congress made these kickbacks legal in 1975 when it passed the "safe harbor" law. The legislation allows fund managers to pay more in commissions than is necessary, as long as the excess comes back in the form of services or research that benefits investors.

The problem is that this has created an opaque system that can be abused. In 1998, the SEC found that some money mangers were using soft dollars to pay for salaries, office rent, and even vacations! Think about this. You sweat every day at work to make a living. You buy a mutual fund to secure your retirement. Then the person who is supposedly protecting your retirement is sipping Margaritas in Cancun discussing with his or her buddies where to buy their next mansion with your retirement dollars!

The second problem is that many funds are not taking advantage of cost saving efficiencies in their operations just so that they can keep the soft-dollar spigot open. Think about this as well. If you had enough money to not have to work you would spend a considerable amount of time looking for safe places with a good return for your money. You would not waste money on things your family did not want and hence did not need. Why give your money then to a mutual fund managers who could care less if they waste some of your retirement dollars; its no skin off their back! The best way to avoid these losses altogether is to restrict your purchases of mutual funds to your 401(k) and try to only buy indexed mutual funds such as the Vanguard 500 (VFINX).

ABOUT THE AUTHOR: Dr. Scott Brown, Ph.D., a.k.a. "The Wallet Doctor", is a successful futures trader, real estate investor, and stock investor. Dr. Brown holds a Ph.D. in finance from the University of South Carolina. His 1998 articles in Technical Analysis of Stocks and Commodities were prophetic in predicting an impending stock market crash. He has helped many people become profitable investors by teaching them to look out over many years to spot stocks that are low and primed for rise in the new bull market. His second article met with approval by Dr. Bob Shiller of Yale University. Dr. Shiller is the economist that Alan Greenspan most highly regards who coined the term "Irrational Exuberance." In 1998 he shouted to the world to "get out" of the stock market but now he is shouting to everyone that it is time to "get in!" The Wallet Doctor is not only sought after for investment advice and coaching in stock investing but also in futures trading and real estate investing. Visit Dr. Brown's site at http://www.BonanzaBase.com or sign up for his investment tips at http://www.WalletDoctor.com

---

Google News Updated : Fri, 05 Sep 2008 08:05:30 GMT House committee widens probe of Vytorin safety - International Herald Tribune ChattahBox House committee widens probe of Vytorin safety International Herald Tribune - 7 hours ago AP TRENTON, NJ: A House committee investigating the safety and effectiveness of the popular cholesterol drug Vytorin and one of its components is turning up the heat on the drug's makers. Many Questions About Vytorin New York Times Drug Scare Shenanigans FOXNews Reuters - U.S. News & World Report - Forbes - MedPage Today all 547 news articles Publ.Date : Fri, 05 Sep 2008 00:32:18 GMT Stocks: A Terrible Thursday - BusinessWeek Washington Post Stocks: A Terrible Thursday BusinessWeek - 2 hours ago Major US indexes each tumbled nearly 3% as worries intensified over the health of the economy. All eyes are on Friday's jobs report Market players were probably wondering Thursday why they bothered to come back from their summer vacations. Stocks Are Broadly Lower Tracking Falls on Wall Street Wall Street Journal Stocks slide on economic worries CNNMoney.com Seattle Times - Los Angeles Times - Forbes - New York Times all 821 news articles Publ.Date : Fri, 05 Sep 2008 05:53:27 GMT Arthritis Drugs Linked to Risks From Infection - New York Times WNCT Arthritis Drugs Linked to Risks From Infection New York Times - 6 hours ago By AP WASHINGTON (AP) - The Food and Drug Administration ordered stronger warnings Thursday on four medications widely used to treat rheumatoid arthritis and other serious illnesses, saying they can raise the risk of possibly fatal fungal infections. Deaths Heighten Arthritis Drugs Warning WebMD Nation Digest 4 arthritis drugs get tougher warnings Seattle Times U.S. News & World Report - Reuters - Bloomberg all 491 news articles Publ.Date : Fri, 05 Sep 2008 01:38:34 GMT Tropical Storm Hanna aiming for Massachusetts - Boston Globe ABC News Tropical Storm Hanna aiming for Massachusetts Boston Globe - 3 hours ago By Andrew Ryan and Martin Finucane, Globe Staff Tropical Storm Hanna is expected to churn up the Atlantic coast and lash Massachusetts this weekend with winds gusting up to 50 mph near the coast and up to four inches of rain. Video: Hanna Nears US, but Stronger Ike Looms AssociatedPress Area departments gearing up for Hanna's arrival Attleboro Sun Chronicle Sun-Sentinel.com - Opelousas Daily World - The Associated Press all 5,279 news articles Publ.Date : Fri, 05 Sep 2008 04:23:14 GMT Jesse Jackson hospitalized for stomach pains - Chicago Tribune United Press International Jesse Jackson hospitalized for stomach pains Chicago Tribune - 1 hour ago By Jeremy Gorner | Chicago Tribune reporter Rev. Jesse Jackson was being treated Thursday in Northwestern Memorial Hospital in Chicago after falling ill. Video: Rev. Jesse Jackson Hospitalized AssociatedPress Jesse Jackson hospitalized after stomach pains USA Today Atlanta Journal Constitution - Entertainment Tonight News - CNN Political Ticker - AHN all 328 news articles Publ.Date : Fri, 05 Sep 2008 07:00:48 GMT UN warns of Haiti flooding crisis - BBC News BBC News UN warns of Haiti flooding crisis BBC News - 1 hour ago Several hundred thousand people need help in Haiti, which is suffering severe flooding after being hit by a series of tropical storms, the UN says. Attempts to Aid Desperate Haitians Hindered by Floodwaters Washington Post Storms line up to slam western Atlantic, southeastern US AFP Telegraph.co.uk - The Associated Press - Chicago Tribune - Bradenton Herald all 2,575 news articles Publ.Date : Fri, 05 Sep 2008 07:05:26 GMT Kilpatrick's rise and fall - Detroit Free Press Washington Post Kilpatrick's rise and fall Detroit Free Press - 37 minutes ago BY BILL McGRAW • FREE PRESS STAFF WRITER • September 5, 2008 Kwame Kilpatrick entered the mayor's office with extraordinary gifts -- charisma, savvy, flair, pedigree, connections, ambition and chutzpah -- everything a 31-year-old needed to make a ... Video: A Timeline of Detroit Mayor's Text Scandal AssociatedPress Detroit’s Mayor Will Leave Office and Go to Jail New York Times Chicago Tribune - San Jose Mercury News - DetNews.com - Wall Street Journal all 5,822 news articles Publ.Date : Fri, 05 Sep 2008 07:27:50 GMT RSS feeds Increase Online Traffic

PARLOT::Ebooks, Scripts, Websites, and more...

Adsense websites

Rolling your 401k: Contributory IRA vs. Rollover IRA

In an ideal world you would start your working career... Read More

Trading Is Not Rocket Science!

Despite what some people may lead you to believe; day... Read More

Choosing A Financial Advisor

With so many financial advisors trying to woo you with... Read More

Variable Annuities

You know all the articles you read about annuities that... Read More

Evaluating A Money Manager

Scams and frauds are designed to take your money through... Read More

Effective Advice For A New Generation of Investors

CATCHING A FALLING KNIFEOne of the most common mistakes made... Read More

Profitability And Stock Turn Rate

The inventory of the typical store represents the largest single... Read More

Investors: Avoid These 5 Common Tax Mistakes

For many investors, and even some tax professionals, sorting through... Read More

Trading Tips No 7: Developing a Casino Mentality for the Day Trader

I submit that the successful day trader would profit well... Read More

Six Principles of Successful Investing

1. Begin investing immediatelyProcrastination is the number one enemy of... Read More

Why You Need To Buy and Sell Gold Coins (Part 6)

Pre-1933 Gold Outperforms Today's Gold Bullion...Since 1970, an investment strategy... Read More

Discipline in Trading and Investing

The one thing I can think of that most affects... Read More

Investing in Car Dealerships: How to Do It Right

The financial characteristics of the automobile dealership are attractive:". .... Read More

Investing In Sons Business Could Cause A Real Family Feud

Q: My youngest son wants to borrow $5,000 to start... Read More

Wit and Wisdom on Money, Wall Street and Success - Part #1

I love to collect quotes as they concisely promote a... Read More

New U.S. Mint Coins a Golden Opportunity

In April, the U.S. Mint revealed plans to strike in... Read More

Useful Tips on Investing

Here are some useful tips on investing. When you make... Read More

Investing and Understanding What You Buy

"There is nothing more frightful than ignorance in action!" Johann... Read More

Rules of Simple IRA Your Business Needs to Know

A Savings Incentive Match Plan for Employees plan, better known... Read More

Oil and Gasoline Price Uncertainties

The Light Crude Continuous Contract hit an all-time high at... Read More

Creating Wealth by Gearing Up

Gearing is where you borrow money to invest. As already... Read More

Beta Factors: How They Can Be Used In The Current Situation

Ever since the turn of the century, world stock markets... Read More

Why the Rich Keep Getting Richer

Rich people: fortunate, lucky, selfish, and arrogant? Or highly educated,... Read More

Making Every Penny Count

More and more workers are leaving their jobs and taking... Read More

Stock Market Leaders and Laggards

Leaders are stocks that breakout immediately when the market confirms... Read More