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D4 Business |
2R
| SUNDAY, DECEMBER 28, 2014
MutualFunds
LUMP OF COAL AWARDS
FOR 2014, PART 1
Your Funds
Chuck Jaffe
Syndicated columnist
The mar­
ket may be
up this year,
but that
didn’t put a
stop to
naughtiness
around the
fund world.
My list has been made,
and checked twice, and it’s
time for the 19th annual
Lump of Coal Awards, my
two­part holiday tradition
of easing Santa’s burden by
singling out the bad boys
and girls of the fund indus­
try who deserve nothing
more than a lousy lump of
lignite in their Christmas
stockings this year.
While the long bull mar­
ket has covered up a lot of
performance flubs, Lumps
of Coal are about more than
just fund returns.
The Lump of Coal Awards
recognize managers, execu­
tives, firms, watchdogs and
other fund­industry fum­
blers for actions, attitudes,
behaviors, execution or
results that are misguided,
bumbling, offensive, disin­
genuous, ham­handed,
graceless, reprehensible or
just plain stupid.
And the losers are:
Management for Giant 5
Total Investment System
for thinking that investors
actually care what’s in a
fund’s ticker symbol.
In March, the ticker sym­
bol on Giant 5 was changed
from FIVEX to CASHX.
While investors love fun,
cute ticker symbols, they
like performance better.
Giant 5, which is a fund­
of­funds, badly lagged its
peer group all year — and
over the last five years,
according to Morningstar —
and is barely in positive
territory. If management
wanted an appropriate
ticker, they should have
gone for SUCKX.
The Allianz Global In­
vestors Retirement Funds,
for the year’s most off­tar­
get performance.
According to Lipper, the
laggard in the “mixed­asset
target 2015” category was
Allianz Global Investors
2015. Its 2020 sister fund
was dead last in its peer
group. As was the 2025
fund in its category. And the
2030, 2035, 2040, 2045
and 2055+ funds, all of
them hindmost in their
asset classes, with gains of
no more than 3.7 percent.
Only the Allianz 2050
fund wasn’t feeding on the
bottom, but it’s close; it’s
worst in the category for the
last quarter, leaving it sec­
ond­worst in the 2050 field
this year. Relative to its
eight target­dated siblings,
that’s a winner.
The Sector Rotation
Fund — run by Navigator
Money Management — for
failing to act its age.
Navigator, which runs the
Sector Rotation Fund
(NAVFX) as well as a news­
letter called “The Money
Navigator,” got clipped in
January by the Securities
and Exchange Commission
for “cherry­picking” the best
recommendations and time
periods to promote its ser­
vices. Regulators took par­
ticular issue with a newslet­
ter article which claimed
that the Sector Rotation
Fund produced an average
annual return of 10.25
percent from August 31,
2002 through October 31,
2011. Similar claims were
made numerous times by
the firm, on its website, in
newsletters and on fund
manager and company
President Mark Grimaldi’s
Twitter account.
Alas, the fund didn’t exist
before Dec. 30, 2009;
claims dating back to 2002
were poppycock, based
instead on a model portfolio
from one of Grimaldi’s other
newsletters.
Regulators are notorious­
ly slow to catch stuff like
that, yet they found the
error before Navigator
officials did. Ironically, the
fund’s real track record is
pretty good; the only prob­
lem with that record is that
it’s short. Time solves that;
fund managers don’t get to
use hypotheticals as some
sort of fake ID to seem older
than they really are.
Bruce Berkowitz, man­
ager at Fairholme Fund
(FAIRX) for giving up
more than a year’s worth
of gains in a single day.
On Oct. 1, a court ruling
sent the value of securities
tied to Fannie Mae and
Freddie Mac tumbling; as a
result, Fairholme lost nearly
10 percent of its value in
one shot, falling back to
levels it had last seen in July
of 2013.
Bets on Fannie and Fred­
die — two government­
sponsored enterprises in the
mortgage business — ac­
counted for about 15 per­
cent of Fairholme’s portfo­
lio. Berkowitz has never
apologized for being fo­
cused — and shouldn’t —
but in this case, he had a big
hand in his own demise, as
the plunge (some of Fannie
and Freddie’s preferred
stocks were down up to 50
percent) came after
Berkowitz lost a legal bid to
force the bailed­out enter­
prises to share profits with
private investors.
Berkowitz is determined
to fight the fight, and may
win it yet, but investors who
were just feeling like he had
regained the magic touch
that made him one of Morn­
ingstar’s “Managers of the
Decade” for the 2000s were
rightly shaken.
Morningstar, for the
performance — or lack
thereof — of its “Managers
of the Decade.”
We’re nearly halfway into
the 2010s, and the top man­
agers of the ’00s are embar­
rassing themselves.
Berkowitz and Fairholme
rank in the bottom 1 per­
centile of the large­value
category for the last five
years. Bill Gross has now
left Pimco after below­aver­
age performance in three of
the five years of the 2010s
and only Morningstar’s
third winner, David Herro
of Oakmark International
(OAKIX), has managed to
come away untarnished
(though he was well below
his category average this
year). And that’s after Legg
Mason’s Bill Miller spent the
2000s ruining the legend he
made en route to becoming
Morningstar’s “Manager of
the Decade” for the 1990s.
This big prize may be the
ultimate sign that past per­
formance is no guarantee of
future success.
The Geoff Bobroff Me­
morial Lump of Coal —
found in a fund’s paper­
work — goes to manage­
ment of the CMG funds,
for name­dropping.
Bobroff — an industry
consultant and former
chairman of the Matthews
Asia Funds — died of a heart
attack last summer. He was
an essential source to me
over two decades, and the
best and most­trusted
source to two generations of
journalists covering mutual
funds; he also was my key
sounding board for the
Lump­of­Coal Awards for
18 years He’d have appreci­
ated this one:
Capital Management
Group launched CMG Man­
aged High Yield Fund
(CHYOX) on Oct. 6, and
filed to change the fund’s
name — it becomes CMG
Tactical Bond on Dec. 30 —
and principal investment
strategy a month later.
When managers can’t
stick with what they’re
doing for more than a
month, their actions tell
investors more than words
just how much conviction
they have in what they’re
doing.
Fund managers with no
money in their fund, be­
cause we’re better off
giving them coal than our
money.
Several studies this year
reported that more than
half of all fund managers
have zero invested in their
own funds. There’s a big
body of research showing
that the more insiders’ inter­
ests are in line with yours,
the better a fund’s risk­ad­
justed performance.
Next week: All things
gross (as in Bill Gross), and
the Lump of Coal Mis­Man­
ager of the Year.
Chuck Jaffe is senior columnist for
MarketWatch.
He can be reached at
cjaffe@marketwatch.com or at
P.O. Box 70,
Cohasset, MA 02025­0070.
Copyright 2014, MarketWatch
Fund Tracker
Weekly spotlight on mutual fund performance
Winners and losers: A mutual­fund scorecard
Fund Wkly % YTD %
obj return return
Biggest funds
American Funds A AmcpA p
American Funds A AMutlA p
American Funds A BalA p
American Funds A BondA p
American Funds A CapIBA p
American Funds A CapWGA p
American Funds A FdInvA p
American Funds A GwthA p
American Funds A IncoA p
American Funds A ICAA p
American Funds A N PerA px
American Funds A SmCpA pe
American Funds A WshA p
Artisan Funds Intl
BlackRock Instl StrIncoOpp
BlackRock Instl EquityDv
BlackRock Instl GlbAlloc r
Dimensional Fds EmMCrEq
Dimensional Fds EmMktV
Dimensional Fds USLgVa
Dodge&Cox Balanced
Dodge&Cox Income
Dodge&Cox IntlStk
Dodge&Cox Stock
DoubleLine Funds TRBd I
FPA Funds FPACres
Fidelity Freedom FF2020K
Fidelity Freedom FF2030K
Fidelity Invest Balanc
Fidelity Invest Contra
Fidelity Invest GroCo
Fidelity Invest LowP r
Fidelity Invest Puritn
Fidelity Invest TotalBd
Fidelity Spart Adv 500IdxAdv
Fidelity Spart Adv TotMktAd r
Frank/Temp Frnk A IncomA p
Frank/TmpFrnkAdv GlbBdAdv
Harbor Funds CapApInst
Harbor Funds Intl r
Loomis Sayles LSBondI
MFS Funds I ValueI
Metro West Fds TotRtBdI
Oakmark Funds I EqtyInc r
Oakmark Funds I Intl
Oakmark Funds I Oakmark
Oppenheimer Y DevMktY
PIMCO Instl PIMS AllAsset
PIMCO Instl PIMS TotRt
PIMCO Funds Instl Income
Price Funds BlChip
Price Funds CapApp
Price Funds EqInc
Price Funds EqIndex
Price Funds Growth
Price Funds MidCap
Price Funds N Horiz
Price Funds N Inc
Price Funds Ret2020
Price Funds Ret2030
Price Funds Value
Schwab Funds S&P Sel
Vanguard Admiral 500Adml
Vanguard Admiral GNMA Ad
Vanguard Admiral HlthCr
Vanguard Admiral ITAdml
Vanguard Admiral ITGrAdm
Vanguard Admiral LtdTrAd
Vanguard Admiral MCpAdml
Vanguard Admiral PrmCap r
Vanguard Admiral STIGrAd
Vanguard Admiral SmCAdm
Vanguard Admiral TtlBAdml
Vanguard Admiral WellslAdm
Vanguard Admiral WelltnAdm
Vanguard Admiral WdsrIIAd
Vanguard Fds TotIntBInv
Vanguard Fds DivdGro
Vanguard Fds STAR
Vanguard Fds TgtRe2015
Vanguard Fds TgRe2020
Vanguard Fds TgtRe2025
Vanguard Fds TgRe2030
Vanguard Fds TgtRe2035
Vanguard Fds TgtRe2040
Vanguard Fds TgtRe2045
Vanguard Idx Fds TotlIntl
XC
LV
BL
IB
BL
GL
LC
LG
BL
LC
GL
GL
LC
IL
GT
EI
MP
EM
EM
LV
BL
IB
IL
LV
MT
MP
MP
MP
BL
LG
XG
MC
BL
IB
SP
XC
BL
WB
LG
IL
GT
LC
IB
BL
IL
LC
EM
MP
IB
GT
LG
BL
EI
SP
LG
MG
SG
IB
MP
MP
LV
SP
SP
MT
HB
IM
IB
SM
MC
LC
SB
SC
IB
BL
BL
LV
WB
EI
BL
MP
MP
MP
MP
MP
MP
MP
IL
+0.7
+1.2
+0.9
0.0
+0.8
+0.6
+1.3
+1.1
+0.8
+0.8
+0.7
+1.1
+1.5
+0.5
+0.2
+1.6
+0.6
+1.0
+0.9
+2.1
+1.0
+0.1
+0.4
+1.5
NA
+1.0
+0.8
+1.0
+0.9
+0.8
+1.4
+1.0
+0.8
0.0
+1.4
+1.5
+1.7
0.0
+1.1
+0.1
+0.3
+1.1
­0.1
+1.1
+0.6
+1.6
+1.4
NA
0.0
NA
+0.9
+0.8
+1.6
+1.4
+1.2
+1.5
+0.9
­0.1
+0.8
+1.0
+1.5
+1.3
+1.4
0.0
­0.6
­0.1
­0.1
­0.1
+1.6
+0.1
­0.1
+1.8
­0.1
+0.4
+0.7
+1.2
+0.1
+0.7
+0.6
+0.6
+0.8
+0.8
+1.0
+1.1
+1.2
+1.1
+0.9
+13.3
+14.4
+9.6
+5.1
+7.9
+5.4
+10.3
+10.4
+9.5
+13.8
+4.3
+2.2
+12.7
+0.8
+4.0
+10.8
+2.9
­1.1
­4.3
+11.3
+9.7
+5.2
+1.4
+11.8
NA
+7.5
+6.0
+6.8
+11.2
+10.9
+15.8
+8.1
+11.6
+5.1
+15.2
+13.9
+5.0
+1.7
+11.6
­5.2
+4.8
+12.0
+5.7
+7.7
­3.9
+12.9
­4.3
NA
+4.4
NA
+10.3
+13.1
+8.8
+15.0
+9.9
+14.4
+6.8
+5.4
+6.3
+6.9
+14.8
+15.2
+15.3
+6.5
+30.1
+7.0
+5.4
+1.7
+15.1
+20.4
+1.6
+8.4
+5.5
+8.4
+10.8
+12.8
+8.4
+13.4
+8.1
+7.1
+7.7
+7.9
+8.1
+8.3
+8.3
+8.3
­3.1
XC
SP
XC
Vanguard Idx Fds TotStk
Vanguard Instl Fds InstIdx
Vanguard Instl Fds InsTStPlus
5­yr %
return
+15.2
+13.9
+12.2
+4.5
+9.1
+9.3
+13.5
+13.5
+11.3
+13.4
+10.6
+11.6
+15.0
+9.1
+5.9
+13.0
+6.7
+2.9
+0.2
+17.0
+12.8
+5.1
+8.2
+15.6
NS
+10.6
+8.3
+9.5
+11.7
+15.0
+17.8
+15.5
+11.7
+5.3
+15.5
+15.7
+9.6
+6.1
+14.7
+5.9
+8.6
+14.5
+6.9
+9.8
+9.9
+16.3
+5.8
NA
+5.0
NA
+16.8
+13.2
+13.3
+15.2
+15.9
+17.4
+21.3
+4.4
+10.2
+11.5
+16.1
+15.4
+15.5
+4.2
+20.3
+4.6
+6.3
+2.0
+16.9
+16.4
+2.9
+16.7
+4.3
+9.6
+11.4
+14.2
NS
+14.8
+10.2
+8.9
+9.7
+10.2
+10.8
+11.3
+11.6
+11.6
+4.6
Best performers
Voya Funds Cl A RussiaA p
Frank/Tmp Frnk Adv TFrMkAd
FPA Funds Paramnt
Direxion Fds EmgMBull p
ProFunds Inv Cl UltLatinAm
Direxion Fds NatRBull2X
Jacob Funds USSmCG I
ProFunds Inv Cl UltraJapan
Jacob Funds MicCGr I
ProFunds Inv Cl UltSmCap
ProFunds Inv Cl Oil&Gas
ProFunds Inv Cl InternetUlt
Fidelity Selects UtilGr
Fidelity Adv Foc A Utilities
Rydex Investor Utilities
Pacific Advisors SCapValA t
Hennessy Funds GasUtlInv r
ProFunds Inv Cl BasicMatls
Frank/Temp Frnk A UtilsA p
Invest Managers TowleDpV
Direxion Fds LatAmBull
Fidelity Selects InEqp
ProFunds Inv Cl UltMidCap
Wells Fargo Adv A Util&TelA
ProFunds Inv Cl UltDow30
Buffalo Funds MicroCp t
Fidelity Invest Utility
Litman Gregory Fds SmallCos I
SchdSmCV r
Amer Century Inv Util
Worst performers
+1.4 +13.9 +15.6
+1.4 +15.3 +15.5
+1.5 +14.1 +15.8
Fund Wkly % YTD %
obj return return
EM
EM
GL
SQ
SQ
SE
SG
SQ
SG
SQ
SQ
SQ
UT
UT
UT
SC
UT
SQ
UT
SV
SQ
SE
SQ
UT
SQ
SG
UT
SC
SV
UT
­35.7
­14.5
­1.7
­12.8
­37.3
­21.6
+1.2
+10.4
­4.5
+6.7
­15.1
+3.3
+24.1
+23.6
+25.8
­21.5
+23.3
+3.9
+27.9
+2.4
­31.2
+1.1
+18.1
+18.5
+19.1
­6.2
+15.0
­3.2
­11.7
+22.7
­6.7
+4.2
+11.4
­6.6
­19.3
­1.6
+0.1
+13.1
+12.2
+24.6
+8.4
+26.9
+14.6
+14.3
+12.5
+12.4
+18.3
+8.8
+14.2
NS
­18.5
+14.4
+27.4
+12.6
+24.1
+20.9
+14.6
+13.8
+9.2
+13.0
Fund Wkly % YTD %
obj return return
5­yr %
return
ProFunds Inv Cl BiotechUlt
Wells Fargo Adv A PrecMtlA
ProFunds Inv Cl UltBear
Rydex Dynamic InvSP5St H
Tocqueville Fds Gold t
Fidelity Selects Gold r
OCM Funds GoldInv t
Rydex Investor Biotech
ProFunds Inv Cl UltShNq100
Frank/Temp Frnk A GoldPrM A
Rydex Dynamic InvNasdSt H
USAA Group PrecMM
Fidelity Invest SCmdtyStrt
GoodHaven
Comstock Partners CapVlA
Midas Funds Midas Fd t
Leuthold Funds GrizzlyShrt
Rydex H Class InvRusSt
Harbor Funds CmdtRRtn I
ICON Fds Hlthcare S
Amer Century Inv GlGold
First Eagle SGenGld p
Schwab Funds HlthCare
Fidelity Advisor A Biotech A
Frank/Temp Frnk A BioDisA p
Invesco Funds A GoldPrec p
Credit Suisse Comm ComRet t
Federated Instl FPruBearIS
ProFunds Inv Cl PrecMetal
Putnam Funds A GlblHlthA
SQ
AU
SQ
SQ
AU
AU
AU
HB
SQ
AU
SQ
AU
SE
XC
SQ
AU
SQ
SQ
SE
HB
AU
AU
HB
HB
HB
AU
SE
SQ
SQ
HB
+8.7
+6.3
+4.7
+4.6
+4.5
+4.4
+4.3
+4.3
+4.1
+4.0
+3.6
+3.5
+3.4
+3.4
+3.3
+3.3
+3.2
+3.2
+3.2
+3.1
+3.1
+3.1
+3.1
+3.1
+3.1
+3.1
+3.0
+3.0
+3.0
+3.0
5­yr %
return
­5.8
­3.1
­2.8
­2.7
­2.6
­2.5
­2.4
­2.4
­2.3
­2.2
­2.2
­2.1
­2.1
­2.0
­2.0
­2.0
­2.0
­2.0
­1.9
­1.9
­1.8
­1.8
­1.8
­1.8
­1.8
­1.8
­1.8
­1.7
­1.7
­1.6
+47.8
­9.3
­28.6
­28.5
­4.9
­9.9
­6.7
+34.5
­37.2
­13.1
­36.7
­9.4
­16.0
­8.6
­18.1
­29.0
­12.0
­9.7
­17.0
+26.0
­12.7
­3.8
+22.9
+35.2
+34.8
­9.4
­15.2
­15.7
­35.7
+28.6
+43.5
­13.2
­32.3
­31.8
­10.3
­15.6
­12.5
+28.4
­37.3
­15.5
­37.1
­15.3
­5.6
NS
­18.7
­23.6
­17.2
­19.0
­3.1
+19.4
­14.7
­10.5
+20.0
+31.6
+30.0
­12.1
­5.0
­16.1
­25.0
+17.3
Footnotes: e: Ex capital­gains distribution. f: Previous day{rsquo}s
quote. n or nl: No upfront sales charge. p: Fund assets are used to
pay for distribution costs. r: redemption fee or contingent deferred
sales load may apply. s: Stock dividend or split. t: Both p and r. x: Ex
cash dividend. NE: Data in question. NS: Fund did not exist at the
start date. NA: No information available.
Key to abbreviations and footnotes:
Fund objectives: AB: Long­term top­grade corporate and govern­
ment bonds. AU: Gold oriented. BL: Balanced. EI: Equity income.
EM: Emerging markets. EU: European region. GL: Global (includes
U.S.). GM: General municipal bond. GT: General taxable bond. HB:
Health and biotech. HC: High­yield taxable bond. HM: High­yield
municipal bond. IB: Intermediate­term investment­grade corporate
bond. IG: Intermediate­term Treasury/government debt. IL:
International (outside U.S.). IM: Intermediate­term municipal bond.
LC: Large­cap core. LG: Large­cap growth. LT: Latin American. LU:
Long­term Treasury/government debt. LV: Large­cap value. MC:
Mid­cap core. MG: Mid­cap growth. MP: Mixed portfolio (stocks and
bonds). MT: Mortgage. MV: Mid­cap value. NM: Insured municipal
bond. NR: Natural resources. PR: Pacific region. SB: Short­term
investment­grade corporate bond. SC: Small­cap core. SE: Sector
(specific industries). SG: Small­cap growth. SM: Short­term munici­
pal debt. SP: S&P 500. SQ: Specialty diversified equity. SS: Single­
state municipal debt. SU: Short­term Treasury/government debt.
SV: Small­cap value. TK: Science and technology. UN: Unclassified.
UT: Utility. WB: World bond. XC: Multi­cap core. XG: Multi­cap
growth. XV: Multi­cap value
5­year % return: Annualized performance over the past five years.
Top 5 mutual funds by objective, year­to­date % return
Emerging markets
InstAX­fd r
AME Fd
EmergAs r
EAsiaA t
EmMktI
Price Funds
Price Funds
Fidelity Invest
Fidelity Advisor A
Virtus Funds I
Equity income
Utilities p
ValLdrs
ParnEqty
EqInc
DivInco Y
Invesco Funds A
Paydenfunds
Parnassus Funds
JPMorgan Sel Cls
BMO Funds
Health | biotech
HlthSciA
Biotch
Biotech A
BioDisA p
Biotech
Prudential Fds A
Fidelity Selects
Fidelity Advisor A
Frank/Temp Frnk A
Rydex Investor
Global
Lazard Instl
Vanguard Fds
Guinness Atkinson
Cohen & Steers
USAA Group
GblInfra I
GblMnV Inv
GlblInno
GblInfra I
CapGr
International
Guggenheim Funds
Fidelity Invest
Fidelity Invest
Virtus Funds I
Fidelity Advisor T
Large­cap core
Vanguard Fds
Vanguard Admiral
PNC Funds
BMO Funds
JPMorgan R Cl
WldEqIncA
AggIntl
Canada
ForOppI
IntCAT p
YTD %
return
Mid­cap core
+11.0
+9.7
+6.7
+6.2
+5.0
FPA Funds
JPMorgan Sel Cls
Dreyfus
Davenport Funds
Vanguard Admiral
YTD %
return
Small­cap core
+17.8
+16.3
+16.0
+15.4
+15.3
Hennessy Funds
Forum Funds
Lazard Instl
Vanguard Fds
JPMorgan Sel Cls
YTD %
return
Natural resources
+36.4
+35.7
+35.2
+34.8
+34.5
Invest Managers
Invest Managers
Center Coast
Oppenheimer A
Oppenheimer Y
YTD %
return
Pacific region
YTD %
return
Long­term bond
+19.7
+14.7
+14.0
+13.3
+12.0
Matthews Asian
IndiaInv r
Frank/Temp Frnk A IndiaGrA p
Eaton Vance A
GrIndia t
Neuberger&BermFd GtChinEq I
Hennessy Funds
Japan Inv
+59.3
+40.1
+36.5
+17.8
+9.3
Vanguard Idx Fds
Vanguard Admiral
GuideStone Funds
Del Inv Instl
Legg Mason A
YTD %
return
Science | technology
YTD %
return
Long­term U.S.
+39.8
+38.9
+28.2
+26.7
+25.8
Vanguard Instl Fds
Wasatch
Vanguard Admiral
Fidelity Spartan
Price Funds
YTD %
return
Mortgage
+6.1
+3.9
+3.8
+3.2
+3.2
YTD %
return
PrmcpCor +20.7
PrmCap r +20.4
LCCrEqI p +18.1
LowVolEq I +17.9
IntrepAm +17.9
Fidelity Selects
Fidelity Advisor I
Columbia Class A
Columbia Class A
Price Funds
Peren
IntpdMCp
ActMidA
EqtyOpps
MCpAdml
CorGrow O
GoldenSCC
USSmMid I
StrSCEqInv
MExpEnhI
Sector
+17.6
+16.7
+16.0
+15.9
+15.1
Fidelity Selects
Fidelity Selects
ICON Fds
Fidelity Selects
Fidelity Selects
YTD %
return
Balanced
+14.4
+12.8
+12.4
+11.1
+10.6
WellsFargoAdv A
Meeder Funds
Meeder Funds
Price Funds
Hennessy Funds
YTD %
return
Intermediate bond
MLP&Engy +12.6
MLP&EnI I +12.5
MLPFoc I
+8.1
StlpthAlpha +7.9
Alpha Y
+6.9
Electr
Electronic
SelComm A
GlobTech
GlbTech
Gold oriented
GAMCO Funds
First Eagle
Tocqueville Fds
OCM Funds
Wells Fargo Adv A
YTD %
return
GoldAAA
SGenGld p
Gold t
GoldInv t
PrecMtlA
­3.5
­3.8
­4.9
­6.7
­9.3
YTD %
return
Trans
Air
ConsStapl
ConStap
CstHo
YTD %
return
DivCapBldr
AggGr p
DynaGr p
CapApp
Eq&Inc Inv
Invest Managers
MorganStanley Inst
Dimensional Fds
Western Asset
GuggenheimFunds
Managed Acct Srs
VanguardAdmiral
AMG Managers
Frank/Temp Frk A
SEI Portfolios
+34.2
+27.7
+17.2
+16.7
+14.8
CutwSelInc
CorPlsFxI
ITExQual
CorePlus I
USIntrBdA
LTBnd
LTGrAdml
ExtDrGS4
ExtDurI
WACpBdA
+15.3
+15.1
+14.3
+13.1
+12.2
YTD %
return
+8.2
+7.8
+7.6
+7.4
+7.2
YTD %
return
+18.6
+17.2
+16.2
+15.1
+7.7
YTD %
return
ExDurTreas +43.3
USTryFd +30.9
LTsyAdml +24.0
SpLTTrAd r +24.0
USTLg
+22.2
YTD %
return
US MrtgInst
GNMA Ad
IntDurGv x
StrMPrt
GNMA A
+7.7
+6.5
+6.4
+6.4
+6.4
SOME HAVE
ENOUGH
TO RETIRE;
SOME ...
Investing
Scott Burns
Syndicated columnist
Q: My
question is
very sim­
ple.
I am 55
years old. I
have a
govern­
ment job
from which I can retire and
have about a $4,000­a­
month annuity.
I also have a house pay­
ment of $1,600 (still owe
25­plus years), but no
other major debt.
And I have saved
$450,000 in a 401(k)
account.
Can I retire based on this
scenario?
A: With an income of
$4,000 a month, some
home equity and $450,000
in savings, you can retire if
you are willing to do what
it takes to live on the given
resources.
Lots of people do it. And
they do it without moving
to Mexico, Thailand or
Panama.
It’s really a question of
how much you want to
stop working and what you
are willing to do to achieve
that goal.
But if you want to main­
tain your current lifestyle,
shelter arrangements and
medical­ insurance cover­
age, it’s probably too early
for you.
The reason is your age.
At 55, you have a very
good chance of living an­
other 30 to 40 years. The
resources you have are
likely to look pretty limit­
ed.
Q: I turn 65 in Decem­
ber; my wife turns 61 in
November. We are consid­
ering retirement.
Here is our current situa­
tion:
(1) No credit­card debt.
We pay off every month.
(2) No mortgage on a
$675,000 home.
(3) Two late­model cars
that are paid off in full.
(4) We have $50,000 in
our checking account.
(5) We have $20,000 in
a Vanguard taxable ac­
count.
(6) Our combined esti­
mated monthly Social
Security benefit will be
$5,000.
(7) Our combined
monthly pension benefits
will be $3,000.
(8) Our total 401(k)
balance is $3 million.
Can we retire now and
be financially secure that
we will not run out of
money?
A. Of course you can
retire!
In fact, let’s put it anoth­
er way: If you can’t, who
could?
But let me tell you why.
Trust me, you aren’t the
only person with lots of
assets who can’t make the
jump because they don’t
know how much is
enough.
The one figure missing
from the facts you sent is
your anticipated retire­
ment spending.
But we can squeeze it
out of the information you
sent. Here’s how. The
biggest single expense for
most Americans after
retirement is the cost of
shelter, their home. A
recent report from EBRI,
the Employee Benefit
Research Institute, found
that Americans age 60 to
64 devoted 42 percent of
their spending to shelter.
The proportion remains
stable as people age, in­
cluding for people 75 and
over.
What could go wrong?
Take your pick from a
Menu of Worry. But con­
sidered against the human
condition, you’ve got it
made.
So enjoy it.
Think about others. Help
others. The more you do,
the deeper you will under­
stand, and enjoy, what you
have.
Questions:
scott@scottburns.com
Copyright 2014, Universal Press
Syndicate