Growing scandal hurts sales

[jamesinca]

Growing scandal hurts sales

Kathleen Pender Sunday, October 5, 2003

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The widening mutual fund scandal, which ensnared more firms and individuals last week, may be taking a bite out of industry sales, according to new data from AMG Data Services.

The Arcata (Humboldt County) firm estimates that outflows from the nation's stock funds exceeded inflows by $2.1 billion last week. Net outflows of that magnitude are usually associated with big stock market declines. But the market rose slightly last week and stands about where it was when the scandal broke a month ago.

"There has not been been the kind of negative market action that inspires these outflows," AMG President Bob Adler says. He notes that fewer fund groups had inflows and more had net outflows last week than any other week since early April. "I don't quite know why," Adler says.

Many factors influence fund flows, and weekly numbers can be highly volatile. But Adler says it's possible that allegations of improper and illegal trading at some prominent fund groups may be affecting sales -- even at complexes that have not been implicated.


http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2003/10/05/BUGUO245D11.DTL

[teryang]

1. Wait till next tax season

I won't invest in an IRA or 401K again until I see that the wave of corruption that has overtaken this country is stopped dead in its tracks by criminal prosecution. I think the experts are going to be surprised by the money that doesn't come in.

If I should lose my job, that is the first thing I'm going to do in the new tax year is get all my money out (what little is left).

[jiacinto]

3. I wouldn't do that

Actually, if you invest now, you will be thankful because the current economic instability is not going to last forever. But that assumes that this is money you won't need for at least 10 years or more.

[cliss]

2. Good point, Teryang.

I have no interest in turning my money over to other people, in good faith, and have them squander it.

I still remember Enron. If I were to quit my job, I would take my 401(k) and liquidate it, even though I'm going to get hit with a tax penalty. Less is still better than nothing.

[Frances]

4. Why wouldn't you just roll the 401K over into

a rollover IRA? You can roll over into a bank or a brokerage.

You have to have the bank or brokerage fill out paperwork, but the institution will be glad to do so because they will be getting your money.

For better or worse, I manage my own rollover IRA. I have some mutual funds, some stocks, and cash. It's not a lot of money, but if I had taken the money out when I left my last job, I would have had to pay the 10% penalty plus the income tax. Now the money is growing tax free, until I have to begin taking it out at about age 70.

And yes I hate the corruption of the brokers and brokerages and banks. I try to read as much as I can so that I get swindled as little as possible.

[teryang]

5. Appreciate the advice

I had sincere doubts about putting any more money in these retirement accounts. I've liquidated almost all equities but haven't made the last move to get the money out. When interest rates start to go up again it may change my outlook.

I've been wrong before, I lost a lot of money during the crash. It was because my job doesn't allow me the time to keep up with the markets like I used to. I would have lost a lot of money anyway, but I lost tens of thousands more because I was preoccupied with other economic changes which caused me to sell my business, sell my home, get a new job, etc.

At this point cash or real estate is just better.

One troubling item is that the advocates of the more conservative investing strategies seem to have gone totally ideological with right wing fanatical political ideas. When the investment newsletters are filled with fascist bullshit about John Dean and Wesley Clark something is critically wrong. When this is taken in the context of the globalism, WTO, GATS etc., it doesn't seem that American corporations are proponents of sound financial planning anymore but would rather extort their profits from various political schemes which are short sighted and amount to little more than ripping people off. Therefore, I have no confidence in the future of these markets.

[E_Zapata]

7. I don't want to buy into the market system - just on principles

that's money that goes to the big corporate thieves. I won't buy into that. Not that I have money to invest. :-) But if I did, I would buy gold and land.

[E_Zapata]

6. could it be that big corps have their operations outside the US,

so that maybe MF outflows won't affect them that much (since the inflows are dominantly americans, right here suffering the economic consequences of a depression)? Should have paid more attention in econ 101.