Money Market Funds Just Got Safer … Or Did They?

After years of debate, the Securities and Exchange Commission this week finally adopted new rules designed to shore up the stability of the $2.6 trillion money market  industry. The question now is, will it help? While the changes largely affect institutional investors, one provision also applies to small investors by temporarily restricting their access to their money if a fund has liquidity problems. For decades money market funds were seen as reliably boring, investing in government securities or high-grade corporate debt. Though the funds’ …

Interest Rates Are Low Until You Do the Math

I often hear that interest rates are awful and that it’s the worst time ever for retirees needing to live on fixed income. Yet when you look at after-tax, inflation-adjusted returns, a different picture emerges. Many people smile when I tell them that back in 1980 they could have earned 12 percent on a 10-year U.S. Treasury or certificate of deposit (CD). Depositing $10,000 would have returned $1,200 a year. But if a third went to taxes, that gain would …

Those Free Financial Dinner Seminars May Give You Indigestion

Ever get those invitations for a free financial seminar at a restaurant? “Nothing will be sold – we only want to educate you on your financial future,” is the typical pitch. Most specify that “financial professionals may not attend.” However, I recently received one that didn’t exclude me, and decided to see what I might learn about my financial future. Here’s my experience and what you need to know. First, this wasn’t just some seminar at a local restaurant; this …

Planning for a Strong Financial Future

By Lee Baker, CFP One of my favorite things as a child was reading comic books. To be honest, if I had more free time, I would probably read them now. Like me, most of you probably remember the Charles Atlas ads in comic books and other magazines. You know the story: A bully kicks sand in a skinny kid’s face. Deciding to do something about it, the skinny kid sends for a free book from Charles Atlas that promises …

Is U.S. Stock Trading Rigged?

In his new book, Flash Boys: A Wall Street Revolt (W.W. Norton & Company, 2014), Michael Lewis, author of  Moneyball and The Big Short, says stock market trading may be rigged by so-called high frequency traders using supercomputers. During an interview about his book Sunday on CBS’s 60 Minutes, Lewis discussed the impact of high frequency trading in what’s known in the brokerage world as front-running. To explain what this is, let’s say you wanted to buy 100 shares of …

More Investors Choosing Target-Date Funds for Retirement Savings

Target-date funds are growing in popularity among investors in workplace retirement plans because they’re so easy to manage. You pick a retirement date, and the mix of investments automatically adjusts to a more conservative allocation as you move closer to that date. No muss, no fuss. If you’re not investing in a TDF, chances are you will be. A new study says that by 2018, nearly two-thirds of all 401(k) savings contributions will go into these funds. TDFs have become …