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sschullo

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Everything posted by sschullo

  1. You have heard this before and you will hear it again, investors buy high and sell low! Yes, they still do it. After all of these years of buy and hold, rebalance in low cost index funds that have been available for everybody else except K12 teachers, and with 1.7 trillion in Vanguard and a half trillion in TIAA CREF, you would have thought the trading would decrease. Sounds like it hasn't yet. Dalbar latest report says it again: http://portfolioist.com/2012/05/11/the-most-common-mistake-investors-make/
  2. And the NEA knows better. Once again, I want to publicized their 401k plan that NEA offers their own employees, which would include the President on down: http://www.brightscope.com/401k-rating/256985/National-Education-Association-Of-The-United-States/261116/The-National-Education-Association-401K-Retirement-Savings-Plan/ Scroll down to the "Top Three Funds in the Plan: VANGUARD!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! What is the "Investment Adviser" and "Record Keeper?" Scroll down for the answer if you are not sure: VANGUARD!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Note to CTA or NEA officials. I fully expect that you will be telling Brightscope to take this report down soon. But don't worry, I have copies of Brightscope.com report. I will talk about it in my second book soon to be published later this summer or early fall. Do we really have to do this? Is the money so important that you want to rip off your own members and give your own employees a dream plan that we have been talking about here for over a decade? Still think nobody is noticing what you are doing?
  3. To lump sum or DCA has been debated for years. It just depends on your comfort level. You can do either or a combination and use the MM fund. Yes the market is high so that the funds that you are selling and moving are also high. While I don't know exactly what you are moving, looks like it maybe a sideways move. I think its more important to know where the money is going eventually: a diversified portfolio of equities and bonds with the bond allocation appx equal to your age. And keep learning about risk.
  4. Indeed, you read correctly, VALIC was behind it, which is odd...they have been a source of variable annuities for a long time...hence the name. Personally, it would appear they were jumping on the train and seeing the destination. VALIC is also losing a lot of district's it TPA'd for, ie LAUSD. All in all, not sure what they are playing at. Valic has a way to go. They need to change from selling to informing and reduce their annuity products to the TIAA CREF level with no surrender fees. Valic's products are still high fee as far as I can tell. They were the tpa for us at LAUSD until last year when our committee recommended and the CFO accepted CalSTRS, a nonprofit. I think they still want to be part of the TPA business. I think they supported the bill because they see the inevitable coming.
  5. Our enemy of 403b reform just released their latest newsletter. I read it with great interest. This is the first time I have read where the agents are beginning to get defensive about their practices! And I think we can agree on what they said: "By now you should know the story: Consultants in the employ of some major players in the industry have told state legislators and school districts that teachers are paying too much for their 403(b) accounts." They didn't deny this. We agree. Read the entire article here: http://www.asppanews.org/2012/05/08/403b-advisor-releases-spring-issue/
  6. Update. Last Saturday, United Teachers Los Angeles UTLA sponsored a financial education workshop on the 403b and 457b plan. The 75 participants were given a short talk about the history of 770.3 and what ab1949 was supposed to do. Guess what, they were angry that ab1949 was defeated. Duh, teachers aren't stupid when given the data. CTA now says on their website: "Oppose. Public employees: annuities and mutual fund custodial accounts. 5/2/2012 - In committee: Set first hearing. Failed passage. Reconsideration granted." What the heck does "reconsideration granted" mean?
  7. Video of the committee meeting discussing 403b reform bill ab1949. Scroll forward to 1 hour and 38 minutes to see Assemblyman Cedillo introduce the bill. The first speaker after Assemblyman Cedillo is our heroine, the famous Crystal Mendez at 1 hour 42 minutes, who knocked it out of the park! Also, LISTEN TO California's Teachers Association (CTA's) shameful testimony in opposition to our bill! Scroll in to 2:15. http://calchannel.granicus.com/MediaPlayer.php?view_id=7&clip_id=298 Here is the list of coalition supporters: Antelope Valley Community College District Association of California School Administrators AXA CalSTRS Faculty Association of California Community College Glendale Community College District Great-West Retirement Services The Harford Company Kern Community College District Los Angeles Community College District Los Angeles College Faculty Guild Los Angeles Unified School District Los Angeles Unified School District Defined Contribution 403b/457b Advisory Committee Peralta Community College District Riverside Community College District San Bernardina community College District San Joe-Evergreen Community College District Sierra College Small School Districts' Association South Orange County Community College District Teamsters Union TIAA West Kern Community College District Variable Annuity Life Insurance Company (Valic) Yosemite Community College District OPPOSITION: American Fidelity Assurance Company American Society of Pension Professionals California Teachers Association Financial Services Institute MidAmerica Administrative and Retirement Solutions National Association of Insurance and Financial Advisors of California National Tax Sheltered Accounts Association Retirement Options for Professional Educators Numerous individual financial advisors and their clients Make no mistake, The California Teachers Association KILLED THIS BILL and we will not forget!!!!!!!!!!!!!!!
  8. Indeed, you read correctly, VALIC was behind it, which is odd...they have been a source of variable annuities for a long time...hence the name. Persaonlly, it would appear they were jumping on the train and seeing the destination. VALIC is also losing a lot of district's it TPA'd for, ie LAUSD. All in all, not sure what they are playing at. Hi Kat, Politics make for strange bedfellows. Yes, VALIC and California Federation of Teachers both supported the bill (ten years ago, both opposed a similar measure). I think VALIC sees the handwriting on the wall that 403b is going to change in favor of what we wanted all along for years and years on this board, low cost, mutual funds and NOT annuities. They are now offering a mutual fund platform just as they did when Valic was our TPA for 5.5 years for LAUSD. I talked to both gentlemen about VALIC's turnaround. They want to be competitive. I told them to keep TIAA CREF on their toes in front of the TIAA CREF rep! We all laughed. This coalition was great. I personally have never felt so good about the collaboration, the positive spirit when we knew the bill was going down because of CTA opposition. But we are great friends now as a direct result of our belief that teachers deserve a plan that is just as good or better than both CTA and NEA's own 401k plan. Check their 401k plans on www.brightscope.com. Just type National Education association of America and California Teachers Association in the search feature. NEA has Vanguard and CTA has a bunch of insurance companies but their plan is rated an 83, which is still very good.
  9. CTA won't feel it yet. But if they lose significant credibility from here on, I think it will be by their pathetic opposition in front of a lot of good ethical people who will not forget CTA's behavior! CTA opposed a great bill that looks after the teacher's best interest for the first time in 403b history and they opposed it in front of 15-20 statewide educational leaders on such weak grounds (Bill should come from teachers, not vendors)! The many supporters like me will tell everybody they know what really happened yesterday. I know first hand that CTA damaged their relationship with CalSTRS, IMO. It's one thing to bully your real opponents (those who attack our pension plan and teachers with incorrect data), but to bully us educators and other collective bargain units will never be forgotten. Our oversight committee will hear the full report on our next meeting and CTA is not going to look pretty. Of course all of this is IMO.
  10. Our California Bill ab1949 lost. It would have done away with a corrupted insurance code that favors large insurance carriers over mutual funds for decades. It would allow districts to competitively bid and offer an open architecture platform with mutual fund companies. The coalition was lined up almost to the back door for people supporting this bill. It was WONDERFUL. Assemblyman Cedillo argued passionately for the bill and do the right thing for teachers. He is my new hero. I was able to sit at the table and speak for about 30 seconds on behalf of the LAUSD oversight committee. There were many people from school districts, administrators, CFT, Junior College districts, Valic, TIAA CREF, CalSTRS and the LAUSD legislative rep spoke in favor. It was an impressive sight! The opposition had only about 5-6 people 2 were from our beloved unions and the rest were insurance industry reps. My old union UTLA and CTA. CTA killed it with their arrogance, power and skilled schizophrenia. Their rep was all over the place. She said that she is not against protecting educators from ex ploitation, hates that educators are paying high fees, wants to stop sales people from going into schools and that the annuity companies are taking advantage of educators. She kept stressing that this discussion should start with teachers and not from vendors. OK, I get that. If you want this coming from the teachers, then SPONSER a bill. CTA knows that their members are getting screwed, so either sponsor a bill or endorse Pension 2. But we know CTA REAL INTENTIONS…their RFP has been floating around for over 3 years suggests that they want to be in the game as a money maker (a la the NEA). Vendors, why have you not responded to CTA's RFP? What this tells me is that even though we lost the votes, big time, our side won that argument and the opposition knows it! It's so apparent that CTA focus is on pension reform and they desperately wanted to be part of this game because the rest of the world (OUR SIDE) is way ahead of them. CTA knows this but they lacked the content to argue for the teachers. OUR SIDE ALREADY DID THIS. WE EXPERIENCED THE RIPOFFS. So CTA did what they could and they knew they would win, just oppose it. It's so obvious that they are listening to NEA, Security Benefit who just made a deal with Graff last fall. Who knows what the connection is. But eventually we will find out. I think we were all impressed with the number of people who represented organizations, were united for the educators. The opposition looked transparent. I think they were a little surprised that this obscure issue got some much support. The line on our side went all the way back to the door! I remember vividly 20 years ago there was NOBODY that I could find to help me with my 403b, so we have come a long way. There are lots of good and ethical people who want to do the right thing for the teachers. The star of the hearing was our first speaker Crystal Mendez, the LA Times featured teacher that was on a front page article on unions and 403b by Kathy Kristoff.
  11. Ideally you want to roll it into an rollover IRA and reinvest it in low cost companies, to avoid a lump sum tax bill, unless its a small amount.
  12. This article is good, but way too complicated. The best way to protect ourselves is self-education: http://www.jdsupra.com/post/documentViewer.aspx?fid=da38d852-bce5-4fd2-a063-11ce11d4b083&utm_source=twitterfeed&utm_medium=twitter&goback=%2Egde_2501193_member_111526550
  13. You asked for my thoughts. I don't know the answers to your questions. At our district the Chief Financial Officer has the legal fiduciary responsibility, not the TPA or our advisory committee. Does that mean that the CFO is responsible for the employees' accounts in a falling market? I don't think so, if the employee knows about investment basics or the person selling the fund has told the employee the risks. I don't know where the fiduciary responsibility ends and starts between the CFO, the person enrolling the teacher and the individual teacher. As an ordinary investor, I think of myself as being the ultimate fiduciary. There is a lot of talk about fiduciary standards and responsibility. I don't have to think about having somebody look out for my best interests and set aside their personal interests or sell me funds with commissions that I did not want to pay. I know I am not doing any of that because I have learned enough to take responsibility for my portfolio. I know what I am paying, the performance and the risks I am taking. If the market goes down, my account will go down as balanced by the 70% bond holding. I know from experience not to put 100% in equities or 100% in bonds and none "under my mattress." Self-education made me immune to that "other" person fiduciary responsibility. It's not in my vocabulary for my personal portfolio. I have my own fiducary, "thank you very much." Am I making any sense? Steve
  14. http://www.indexuniverse.com/sections/news/11737-vanguard-cuts-fees-on-voo-bnd-and-vti.html?utm_source=newsletter&utm_medium=email&utm_campaign=DailyEmailBlast&utm_price=false
  15. Scott is a great guy who has been concerned about our best interests for many years. His columns about fiduciary standards are tops: http://www.advisorone.com/2012/04/27/morningstar-columnist-scott-simon-named-fiduciary?t=mutual-funds Summary of his latest column: "There is a fundamental, underlying reason for the logical inconsistency of a broker fiduciary standard: It is not possible to serve two masters. The oldest and most central fiduciary duty is the duty of loyalty--the notion that a fiduciary must place the interests of its beneficiary (participants and their beneficiaries in the ERISA context) before its own and any third parties. Registered representatives of B/Ds and other like entities cited in the last two columns fail in this most basic of duties because they are forced to pay legal homage to their B/Ds and the products they push, a requirement that leads to advice about such products that always has the potential to be in conflict with the best (or sole) interests of their clients. Not to mention that many good advisors who truly care about their clients are hobbled by this business model." I'll say. 770.3 is one such business model that is so out of touch with today's defined contribution plans in the 21st century. There is a growing awareness of more and more professionals who truly care about their clients, but this code prevents them from acting in the best interests of participants in 403b plans in California. This insurance code demands that school districts allow legal and massive conflicts of interests and prevents accountability in how the 403b plans(READ ANNUITIES)is presented to California teachers.
  16. Hi tony, Yep, this regs stuff is really a distraction. So many questions on the regs when hardly any of the regs takes care of our interests. We spend so much time answering regulations questions. I could care less. The answer is to learn investing and then we have the tools to work around them as best we can. I did it twenty years ago, and now there are low cost companies as 403b vendors. But today there are still no effective delivery systems worth a damn, except that candy bar! Have a great weekend, Steve
  17. Great write up by one of his followers who is also an author of numerous books on boglehead investing. Vanguard is the worlds largest mutual fund company with 1.7 trillion. 9 billion are in the indexes and the rest are in their low cost managed funds. http://www.cbsnews.com/8301-505123_162-57419051/book-review-the-house-that-bogle-built/?
  18. http://www.utla.net/system/files/bewarepizzapeddlers.pdf I have always been told that there are not free lunches. The money is coming from somewhere and it's from you, the investor. Readers: read J blimp comments about his clients doing so well with their investments, "all without paying fees". ALL WITHOUT PAYING FEES! http://board.403bwise.com/index.php?showtopic=5445&pid=30097&st=0entry30097 This is worth repeating over again. It's a flat out lie. No ethical "professional" can have a business without his or her clients paying a fee, whether is the spread between the market returns and what the company gets, or transfer fees, marketing fees all legal fees that the insurance industry can bypass the SEC guidelines. No mutual fund company can do with the insurance industry does. The mutual fund industry is highly regulated by ERISA and SEC, but not 403b.
  19. Hi J, We agree with your assessment to James about his website. Steve
  20. Yea, its frustrating because of people who presenters and delivers this "garbage" don't share our best interests. That's their job. But we have a job too. That's why so many teacher colleagues that know something stinks give up. The fact that you said to us that you are frustrated is actually a good thing. You are persistent. The 403b/457b world has not caught up yet to those of us who know the "garbage" that districts offer. 20 years ago it was very easy to find out what is going on: avoid paying all commissions, loads and never use annuities for long term growth. That's all I knew at the time and it was a tremendous help to eventually learning to invest in the following years. Actually, it is a lot better now with many great investments: Target date, lazy portfolios, etc. I am not privy to what Jersey offers, I live and worked in California and it's just as bad. Still, I managed to work out a plan that looked after my best interests with the garbage that LAUSD offered at the time. Hopefully, you can work through this. It's well worth it. Steve
  21. Hi Scott, Welcome. Since TIAA CREF is the administrator, you might call them. Here is something to ponder in the meantime. What if the return was terrific on one hand or it lost money on the other? What would you decide in each case? I hope you don't decide based on last years returns. My point: Returns are not the reason we choose a plan. We choose plans because we want some exposure to risk via equities so we can outperform bonds to keep up with inflation, some protection with bonds for rebalancing to keep our gains, and fully diversified with bonds and equities as broadly as possible with all stocks from around the world and all bonds within the United States to manage and spread out the risk. We want to reduce risk, interestingly, returns are increased over time when risk is reduced through diversification. The return is not considered in this choice to choose or not choose a fund. Last year's return darlings become tomorrow's dogs and it can happen quickly. http://enroll.tiaa-cref.org/Resources/CustomFiles/calstrs_easy_choice_ports.pdf The 2020 fund is for somebody who is retiring around 8 years. It has a 29% equity and 71% fixed (bonds). I think it's a great choice because you have all of the bases covered with a broadly diversified portfolio including inflation protection and TIAA CREFs traditional annuity. I think it's a good choice for somebody close to retirement. I am going to be 65 in a few months and I have a similar portfolio with 30% in stocks and 70% in bonds. My portfolio earned 2.6% last year, but over the last three years it earned an average annual return of 9.2%. I am happy since it recovered from a 11.9% loss in 2008. If you have any more questions, we are here to help. Have a great day, Steve Thanks Steve, I did call them and they could not give me any rough figures on the performance of the fund. They said I would have to figure this out and I do not know how. I just wanted to have some kind of guideline. Thanks Sorry you had trouble finding the information you were looking for. If you go to www.Pension2.com there is a link on the right had side of the page about half way down under "Quick Links" entitled "Quarterly Performance". The PDF document that launches contains performance information for all of the funds available under Pension2, including the Easy Choice Portfolios (page 5). Specific to your question, the Conservative 2020 fund returned 3.14% for calendar year 2011. On the Pension2 site you can also find allocation information for each of the Easy Choice Portfolios, which are set up with particular risk-tolerances and retirement dates in mind. If there is any additional information we can provide, CalSTRS Pension2 program can be reached at 1-888-394-2060. Thanks Brian, It's great that somebody from CalSTRS comes here to answer questions, assuming you are from CalSTRS pension2. The OP wanted the calendar year return for 2011 of that 2020 conservative portfolio. The page 5 reports through Aug 31, 2011 with 3 month, YTD, etc. etc. I am also interested in the calendar year returns of all of these portfolios since inception, from 2007 through 2011. Thanks in advance, Steve Yes I am from CalSTRS, sorry for not clarifying. We are always here to answer any questions. Specific to the above request, the information on the Pension2.com site is current as of 12/31/2011 and includes 3 month and year-to-date returns, as well as 1 year, 3 year, and since inception returns for all Easy Choice Portfolios. The performance numbers are updated quarterly and 3/31/12 numbers will be posted to the site in the next few days. Hi Brian, Thanks again for answering the OP question and my request to get all of the data from the Easy Choice Portfolios. As a frequent poster for ten years, I just wanted to clarify your comment that calstrs were "always here to answer questions." Yes, that may be true if people call you on the phone. I criticism of calstrs has been tight lipped about their PR on this site. For the past 4 years, there have been many questions about Pension 2 here. It's very frustrating for educators like us to get the word out about Pension 2, while seeing our colleagues get bitten by the 403b sharks all over California. Without your help, the OP would not have gotten his question answered. It's very encouraging when you said that Pension2 staff is going to aggressively get the word out about the great Pension2 plan, the very best 403b in California that's available to all school districts. Have a great weekend and look forward to more posts. Steve
  22. Hi Scott, Welcome. Since TIAA CREF is the administrator, you might call them. Here is something to ponder in the meantime. What if the return was terrific on one hand or it lost money on the other? What would you decide in each case? I hope you don't decide based on last years returns. My point: Returns are not the reason we choose a plan. We choose plans because we want some exposure to risk via equities so we can outperform bonds to keep up with inflation, some protection with bonds for rebalancing to keep our gains, and fully diversified with bonds and equities as broadly as possible with all stocks from around the world and all bonds within the United States to manage and spread out the risk. We want to reduce risk, interestingly, returns are increased over time when risk is reduced through diversification. The return is not considered in this choice to choose or not choose a fund. Last year's return darlings become tomorrow's dogs and it can happen quickly. http://enroll.tiaa-cref.org/Resources/CustomFiles/calstrs_easy_choice_ports.pdf The 2020 fund is for somebody who is retiring around 8 years. It has a 29% equity and 71% fixed (bonds). I think it's a great choice because you have all of the bases covered with a broadly diversified portfolio including inflation protection and TIAA CREFs traditional annuity. I think it's a good choice for somebody close to retirement. I am going to be 65 in a few months and I have a similar portfolio with 30% in stocks and 70% in bonds. My portfolio earned 2.6% last year, but over the last three years it earned an average annual return of 9.2%. I am happy since it recovered from a 11.9% loss in 2008. If you have any more questions, we are here to help. Have a great day, Steve Thanks Steve, I did call them and they could not give me any rough figures on the performance of the fund. They said I would have to figure this out and I do not know how. I just wanted to have some kind of guideline. Thanks Sorry you had trouble finding the information you were looking for. If you go to www.Pension2.com there is a link on the right had side of the page about half way down under "Quick Links" entitled "Quarterly Performance". The PDF document that launches contains performance information for all of the funds available under Pension2, including the Easy Choice Portfolios (page 5). Specific to your question, the Conservative 2020 fund returned 3.14% for calendar year 2011. On the Pension2 site you can also find allocation information for each of the Easy Choice Portfolios, which are set up with particular risk-tolerances and retirement dates in mind. If there is any additional information we can provide, CalSTRS Pension2 program can be reached at 1-888-394-2060. Thanks Brian, It's great that somebody from CalSTRS comes here to answer questions, assuming you are from CalSTRS pension2. The OP wanted the calendar year return for 2011 of that 2020 conservative portfolio. The page 5 reports through Aug 31, 2011 with 3 month, YTD, etc. etc. I am also interested in the calendar year returns of all of these portfolios since inception, from 2007 through 2011. Thanks in advance, Steve
  23. Hi Scott, Welcome. Since TIAA CREF is the administrator, you might call them. Here is something to ponder in the meantime. What if the return was terrific on one hand or it lost money on the other? What would you decide in each case? I hope you don't decide based on last years returns. My point: Returns are not the reason we choose a plan. We choose plans because we want some exposure to risk via equities so we can outperform bonds to keep up with inflation, some protection with bonds for rebalancing to keep our gains, and fully diversified with bonds and equities as broadly as possible with all stocks from around the world and all bonds within the United States to manage and spread out the risk. We want to reduce risk, interestingly, returns are increased over time when risk is reduced through diversification. The return is not considered in this choice to choose or not choose a fund. Last year's return darlings become tomorrow's dogs and it can happen quickly. http://enroll.tiaa-cref.org/Resources/CustomFiles/calstrs_easy_choice_ports.pdf The 2020 fund is for somebody who is retiring around 8 years. It has a 29% equity and 71% fixed (bonds). I think it's a great choice because you have all of the bases covered with a broadly diversified portfolio including inflation protection and TIAA CREFs traditional annuity. I think it's a good choice for somebody close to retirement. I am going to be 65 in a few months and I have a similar portfolio with 30% in stocks and 70% in bonds. My portfolio earned 2.6% last year, but over the last three years it earned an average annual return of 9.2%. I am happy since it recovered from a 11.9% loss in 2008. If you have any more questions, we are here to help. Have a great day, Steve
  24. Paying a record amount for a pro sports team may or may not turn out to be a good bet. But if rich guys are going to buy their toys, they should probably use only their own money.
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