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WHAT'S NEW? Our Latest Updates!

How Low Do You Go?

As the market moved higher over the last year we made changes, selling some of our hotter stock and bond funds and then moving the proceeds to more conservative funds. Longer-term subscribers will remember that in late 2002, while the market was falling, we moved out of cash and into more aggressive funds. 

June 2004 performance review

The Conservative portfolio climbed just over 1% in June. Two of the funds in the portfolio were flat; American Century International Bond didn’t budge, while low risk Vanguard Short Term Corporate moved up less than one tenth of one percent.

Up, Up and Away

When a transition is complete the last great industry continues to exist in the economy, but grows at a slower pace and becomes a smaller percentage of our national product. Today’s outsourcing (or offshoring) of technology jobs is a sign that America’s current leading industry is about to be replaced by another.  What will replace it? Financing.

May 2004 performance review

The biggest hit to the portfolio was a 1.6% fall in Vanguard High Yield Corporate (VWEHX) as junk bonds took a beating in May. The fund is down to just 5% of the Conservative portfolio, so the total effect was muted.

The Economics of Oil

Suddenly oil is on everyone’s mind. It was inevitable – high oil prices always attract media and investor interest. Oil demand is up, supply is weak, fears are high, competition is low. Will high oil prices kill the economic goose that lays the golden stock market?

Ask MAX - Are Roth IRAs Too Good to be True?

Daria from North Carolina asks:

I can't seem to find a clear description of how the tax implications work with Roth IRAs. I understand that what I put into the ROTH is never taxed. Please correct me if I am not understanding that correctly.

My confusion is in the capital gains and distribution of dividends into the ROTH account. Are gains taxed? It would seem like too much of a plus for the investor if they (gains) were not taxed. I have been to several web sites to find a clear definition of the ROTH itself before I commit to opening an account."

Roth IRA's have only been around since 1997, when the Senate passed the Taxpayer Relief Act. The differences between a regular IRA and a Roth IRA are significant, and choosing the one that's right for you could have a big impact on how much money you end up with in your golden years. Please keep in mind when reading this that IRAs are a concept originated by the United States Government and hence are rife with ins, outs, and what-have-yous.

Are Roth IRA's too good to be true? Well, they are pretty terrific.

Are You Paying a Sales Load?

05/21/04 - Investing Tips

If you've know anything about MAXfunds, you know that we think load funds are bad and no-load funds are good. These days, however, determining if you are paying a sales commission when you buy into a mutual fund is more difficult then you may think. There is no boldface text on the application that says "This is a load fund". The load information is hidden in complex fee tables deep in a document most investors don't even glance at, the prospectus.

Mutual funds come in two basic forms: with built in sales commissions (loads) or without (no-loads). Determining which one you are buying can be confusing. Our own informal research has determined most people who own a load fund don't know they paid a sales commission.

April 2004 performance review

The SSgA Tuckerman Active REIT (SSREX) fund is no longer in this portfolio – we cashed out of funds that invest in REITs (real estate investment trusts) last summer. While we missed some upside in the fund, we also missed last months 15% fall. Given that stocks are more expensive then last year, if REITs fall another 15% or so we may add a small stake again.

Easy Does It

Each and every fund in each and every model portfolio can now be purchased on Scottrade’s no transaction fee (NTF) platform, which means that investors can buy and sell them without paying a fee of any kind. We synched our portfolios with Scottrade’s platform because Scottrade has the highest number of funds available for sale without transaction fees.

March 2004 performance review

Our recent spring cleaning seemed to help the Conservative portfolio. For the month it was up .29%, which may not sound like much, but given the stock market’s decline and our shorter duration bond holdings we’ll take it with a smile.