More Window Dressing

Two weeks ago I wrote about what the Securities and Exchange Commission was doing to regulate the mutual fund industry to help the small investor, the "poor folks". It really added up to zero.

Now the SEC is going to make new regulations for hedge funds to protect the rich folks. And it is more window dressing. In fact, it looks downright stupid. When I say rich folks it is because in order to qualify to invest in a hedge fund you must have assets of one million dollars and income of $200,000 per year for a single person and $300,000 for a couple. With this kind of money you can hire an attorney or financial expert to read the hedge fund document. Furthermore, the major investors in hedge funds are not little investors, but pension plans, endowments and universities that are supposed to be administered by professionals.

The SEC says they want to put in regulations to help prevent fraud. Hey, you guys, what about all the fraud you did NOT find in the regular mutual fund industry? They missed multimillions of fraud in standard "poor folks" mutual funds and now they want regulations to protect the rich folks. All this will do is create more useless expensive jobs in Washington. Every time you hire a new government worker it is the same as putting more tax on everyone, rich and poor.

The Senate Banking Committee voted it in by a 3 to 2 committee decision. Three Democrats for and 2 Republicans against. It is the usual liberal Democrat who wants "feel good" legislation that does no good, but tells the public "we care". Such expensive nonsense.

And how are they going to put this new regulation into effect? More paperwork without question. The funds would be required to hire a Compliance Officer who would write out a set of trading procedures and a code of ethics. Because I have owned a regulated brokerage company I can tell you this is a pile of BS. The new compliance officer is paid by management. He is a toothless tiger. And the SEC will come to do an on-site audit every 2 to 5 years. Because my company was in Florida they did not show up until January or February.

What is most interesting is that there were only 46 hedge fund fraud cases during the past 5 years involving about one billion dollar. In an industry with more than $800 billion in assets this is a spit. Let the rich folks sue and don't burden us "poor" taxpayers.

This new regulation means nothing and is merely a first step for more stringent rules to follow. It is another additional cost of doing business and adds to our taxes.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005

[email protected]; 1-888-345-7870

In The News:

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Momentum stock picks, bonds bounce back and what CIBC's Tal sees for 'very difficult year' ahead: What you need to know in investing this week  The Globe and MailAlso: The grass isn't always greener. How tax and living costs compare in eight Canadian and U.S. cities.
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Mutual funds sell several blue chips stocks, buy mid-caps in March  Business StandardDomestic money managers were seen pruning their holdings in several blue-chip stocks, including Reliance Industries (RIL) and Housing Development Finance ...
What India's top three mutual funds bought and sold in February  LivemintMUMBAI: Inflows into Indian equity mutual funds in February were the smallest in more than two years as savers held back investments amid market volatility ...
7 stocks most favoured by mutual funds over last one year  Economic TimesAs the markets hit a speed bump, stocks favoured by mutual funds appear to be safer bets.
I want to invest Rs 1 crore in stocks and mutual funds for 5 years. How should I invest?  Economic TimesYou may consider the following asset allocation: 40% in large-caps; 40% in large and mid-cap, or multi-caps; and remaining 20% in mid- and small-cap funds.
Should you invest in international mutual funds?  LivemintIf you were to sort all equity mutual funds available for retail investment by their one-year performance, international funds would come on top. The best ...
The dangers of high mutual fund inflows  LivemintMutual funds have put ₹2.4 trillion into markets in the last two years.Equity mutual funds receive ₹8000 crore monthly through SIPs.
Active mutual funds fail to reflect index gains  Economic TimesThe Nifty, which has hit all-time highs for the second time in April, has advanced 12% in the last one year. But these gains are yet to reflect in many mutual funds' ...
Stocks vs Mutual Funds: Which is a Better Option to Invest?  EntrepreneurStocks and Mutual Funds have their own set of hiccups, which are better to know before making your investments.
Why your core equity portfolio should be in index mutual funds  Economic TimesInvestors flock to the performing fund “after” it has beaten the index. Fund selection is not an exact science, and there will be hits and misses.
How income from stocks and mutual funds are taxed for an individual  Moneycontrol.comCapital gains from transfer of unlisted share are considered as STCG where period of holding is less than or equal to 24 months, and LTCG when holding period ...
What to do if your mutual fund scheme earns more return than your investment  Economic TimesAre the returns shown in your mutual fund account statement same as the returns delivered by your fund? It is quite likely that you might have earned less than ...
Top 30 stocks that fund managers bought & sold in March; do you own any?  Moneycontrol.comData for equity flows into a mutual funds for March came as a breather after a weak February. Increase in net inflows in equity and income category led to the ...
Investment limits Sebi prescribes for mutual funds  LivemintDid you know that there are guard rails that the Securities and Exchange Board of India (Sebi) has put in place to protect you from the risks of over-exposure to a ...
Mutual Funds increase holding in ‘attractively valued’ oil & gas stocks  Economic TimesMUMBAI: Mutual funds have been adding shares of oil and gas companies such as GAIL, HPCL, BPCL and ONGC over the last few months, encouraged by ...
Mutual funds shooting themselves in the foot?  Economic TimesWhat if banks take a leaf out of Kotak and HDFC Mutual Funds' decision to direct investors to come another day to get their money instead of paying them on the ...
What top 5 money managers bought and sold in February  Economic TimesFebruary was the fourth consecutive month of decline in net investment into equity mutual funds.
27-year-old rule changed: Disclosure limit on MF, stock investment up for bureaucrats  Economic TimesGroup A and B officials had to intimate government if total transaction in shares or MFs exceeded Rs 50K.
Here are 30 stocks that fund managers bought & sold in February  Moneycontrol.comEven the month of February witnessed the lowest inflow in equity mutual funds in the last 2 years. Only Rs 5122 crore of *fresh* inflows took place in equity funds.
Fund managers ready to go shopping after sharp correction in stocks  Moneycontrol.comDomestic fund managers are capitalising on the market fall and buying shares as they feel the valuations have become attractive after a sharp correction in the ...
Here are a few mutual funds that stocked up on YES Bank in Q4FY19  Business StandardShares of YES Bank tanked 30 per cent in trade on Tuesday, after the bank reported a massive Rs 1,507 crore loss in the fourth quarter of financial year 2018-19 ...
Stay away from stock tips  LivemintIf taming the stock market was easy, everyone would do it.Losing money in market is real and facing volatility is part of the deal.
Top 8 most common mutual fund investing mistakes and how to avoid them  Business StandardMutual funds garnered Rs 8,022 crore of its assets by way of SIPs in December 2018, 29 per cent higher than the previous year | Illustration: Binay Sinha ...
Common investment mistakes to avoid  LivemintRemember, time in the market is key, so don't get affected by volatile conditions.Here are some common mistakes you should avoid while investing.
Here’s a better tool to judge mutual fund performance than simple 1-year, 3-year returns  Economic TimesOne invests in mutual funds to earn potentially higher returns than those in traditional investment products, and I'm sure everyone looks at the one-year, ...
Investing in mutual funds? Size of fund doesn't matter  Economic TimesA bigger MF is not always a better fund. If you come across a well-performing small fund, invest in it.
Stick to MFs if you lack knowledge on stocks  LivemintWhile equity is surely the way going forward considering your age and the financial goals, how you buy in equity is important.Direct stocks work very well if done ...
Why do wealth managers recommend multi cap mutual funds?  Economic TimesMany wealth managers believe multi-cap funds are a good starting point for long-term investors, specially those using SIPs for wealth creation.

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