August 2010 - Page 2 of 2 - NorthStar Capital Advisors

Hidden Costs of Mutual Funds

MUST-READ article on the “hidden costs of mutual funds”. Study shows the average annual trading costs (commissions, spreads, market impact and opportunity costs) of mutual funds to be about 1.44% IN ADDITION to the publicly disclosed expense ratio, which averages another 1.3.% per year. That means the average fund costs 2.75% per year!

Mutual Fund Trading Costs Go Unreported - WSJ.com

Mutual Fund Trading Costs Go Unreportedhttp://online.wsj.comIn selecting mutual funds, most investors know to check the expense ratio, the standard measure of how costly a fund is to own. U.S.-stock funds pay an average of 1.31% of assets each year to the portfolio manager and for other operating expenses, according to Morningstar Inc.

72% of Small Company Employees Have No Retirement Plan

‎72 percent of workers in small companies don’t have retirement plans available to them. Some firms don’t set up plans because of the cost. [U.S. Small Business Administration’s Office of Advocacy, March 2010 via WSJ].

Pitfalls of Money Management

Common pitfalls with managing money:

taking on credit card debt

not saving

waiting for tomorrow to save for retirement

borrowing too much to buy a house/car/college diploma

avoiding taxes at all cost

spending more than you earn

going without a will

not protecting your family w/ life insurance

failing to shelter your earnings w/ disability insurance

ignoring the cost of fees

[from NPR’s economics editor Chris Farrell]

Fund Investors at “JetBlue” Breaking Point?

Fed-up fund investors at a ‘JetBlue’ breaking point. Change your investment flight plan, but stay airborne. [The headline is so good that the article almost doesn’t matter!]

Fund investors at ‘JetBlue’ breaking point Chuck Jaffehttp://www.marketwatch.comBOSTON (MarketWatch) — It’s been nearly a week since the man known as the “JetBlue flight attendant” got mad as hell and decided he was not going to take it any more. He cussed out everyone in sight, grabbed two beers, popped open the airplane door and escaped down an emergency slide onto the…

Beware the “nice” man at church…

Beware the “nice” man at church who is trying to sell you financial products with high fees and commissions that benefit him more than you. — Roger Wohlner, CFP®

Enron and Your 401(k)

A common pitfall that we see over and over is owning too much company stock in 401(k)s. This is at odds with diversified investing and magnifies your exposure to one single company that you’re already obliged to for your income. The worst case scenario does happen. Can you say Enron?

Danger In Your 401(k)http://www.forbes.comOne might have guessed that it would be a long time before anybody was foolish enough again to tie up a big chunk of his retirement savings in the same enterprise that issues his paycheck. Apparently, a long time has passed.

Networth

Do you know your net worth? Grappling with this key number is a fantastic way to build a strong foundation for financial planning.

FIDUCIARY

The Magic Question: ARE YOU A FIDUCIARY? A fiduciary is someone who is committed to putting your financial interests ahead of his or her own. Registered investment advisors are legally and ethically required to act as a fiduciary in serving our clients. Try asking this critical question next time someone approaches you with an investment proposal. You would be surprised how hard it is to find fiduciaries.