Money Matters Radio Show #835

From Money Matters January 21, 2007
New song from Bob Haworth, formerly with the Kingston Trio. Mike talked to Bob about the song "Can You Get Me In?" which is an unusual twist on the issue of illegal immigration. More details and purchase the song on www.bobhaworth.com.

Mike commented on "whispers" on Wall Street -- hidden profit estimates that affect stock prices short term. His advice - ignore the whispers and short term reactions.

Mike talked about the latest Mark Hulbert column. Hulbert says one of the top newsletters the past five years is technically out of business, but its static portfolios have done better than most newsletters and all but 12 of competing mutual funds. Doing nothing - a good strategy!
Numeric funds closing June 2007 and Chicken Little fund closing in the next few weeks. Fidelity closing the Fidelity Nordic fund and merging money into Fidelity Europe.
Listener calls in with details of the new HSA at Blue Cross Blue Shield of Georgia. Sounds good says Mike.
Health care funds - Mike says he likes them. He cited index fund IYH, also real estate fund with health care REITs - that fund is RNP and one stock of interest HR. Do not buy until you examine these closely says Mike. They are not for everyone's portfolios.
A listener has a chance to invest in a startup bank. Mike says history of such ventures the past ten years has been very very good says Mike.
Target funds - nice and convenient, but some have fess on top of the funds inside the target umbrella. Better to invest and allocate yourself says Mike. For that matter, Mike says you also want to avoid financial planner fees when you can. Hire someone like him only when you need professional help. But for most financial decisions, rely on your own common sense.
What are fair fees for planners? Mike says 1% of assets managed is common. Hourly planners usually charge between $150 and $300 an hour.
Listener asks if he should buy a gold fund "out of Texas". Mike said absolutely no. If you want to buy gold, you can buy an index these days at very low expense, such as GLD. Better yet, Mike says consider energy royalty trusts for commodity exposure. An example to study (not a recommendation to buy), is BPT.
Listener wonders what Delta stock will be worth if Delta is taken over by another airline. Answer - nothing.
Larry called in and talked about dividend stocks and if it was okay to stop re-investing at 62. Answer -- you bet. Rising dividends drop into a money market fund inside an IRA - reposition that cash into something like a good bond fund, money market or CD. Why not? (Better yet, take some money out, spend it and have a good time. There is a time when you start spending your earnings.)
Duke Energy and Spectra - the two companies that resulted form Duke spinning off its natural gas unit. Keep both says Kavanagh - both excellent firms.