I agree that very few of them beat the averages ... how could they? They have offices to run, computers, phones, postage and staff ... and buy and sell a lot of stocks, and though their fees are low, many of them pretty well turn over their whole portfolio annually. Those that do that ... have a lot of capital gain to report to you (you hope!) annually ... of which the income tax people want their, in that case, ongoing, share. And they have that management expense fee (often higher than the income tax cost) that reduces their effective rate - and they get their guaranteed rate, whether they produce or not! Also - when it comes time to sell those units, you'd better have kept records of not just your original cost ... but also of all of those declared payouts that were reivested, in order to calculate your capital gain. Many mutual funds keep track of your average cost per unit ... that works O.K. ... until they get bought out/merged, etc. and usually the new system just starts from when they took over. Have you checked Morningstar, the agency that rates them? What about learning how money works and buying individual stocks yourself? I bought shares in one of Canada's half dozen or so nationwide banks over 40 years ago for about $4.20 per share, that was paying about a dime or a bit more as annual dividend. A year ago May each of those shares was "worth" (i.e. "could be sold for") $107.00 ... but they were heavily involved with the U.S. stinky problem mortgage situation, so their price slipped down through the 90s, 80s, 70s, 60s into the 50s ... and have recovered a bit to low 60s. Some here recently said that, of course, I sold ... no, I hadn't. Partly, at the time of the high price, didn't have any idea that it would slide so far ... plus, it went from 4.5 doubles in 41 years to about 4 doubles in those years ... which, apart from the increased income via dividends over those 40 years, is a pretty good rate of growth. But if I were about to buy more bank shares, it'd be a different one, as this is not their first goof in recent years. Recently dividend rate grew from $2.80 to $3.08 to $3.48, which earlier in Canada were tax-advantaged, and recently that advantage increased substantially: so that a person with solely that kind of income went from tax-free $28,000. - 30,000. tax-free, to $46,345. tax-free, an increase of over 60% in one year. Further ... I've subscribed to what I consider Canada's best personal money management magazine for quite a number of years, that carries no ads, is pretty well all text - and the writers respond to subscribers' questions. Local subscribers meet regularly in about 40 places across Canada and I've met with about 20 others monthly here for about 8 years or so: many perspectives and I've learned a lot, there. Cost? Gas to get there, wear and tear on the car - plus, time ... a couple of hours a month, and another at the coffee house after, with a few of the guys and gals. If I'd put that $4.20 into the average even equity-based mutual fund 41 years ago, would the size of that asset have doubled that well? Rather doubtful, I think. A couple of mine have - several haven't. But I don't want to dump 'em this year, due to forced sale of a major holding - Canada's largest telco going private (damn it!). And that's with the income reinvested - and my shares paid me dividends quarterly, with frequent increases, for 41 years. However - the big proviso - the average growth rate has not been that good. I've avoided some taxes as I went along, but that piper will have to be paid, one of these days. Whether while I'm alive ... or for my executor to take care of, before dispersal of my estate to my kids and charities. Had I put that $4.20 into a bank account, GIC, bond, etc. where the number of dollars of principal has been guaranteed, would I have developed any such result? No way! Apart altogether from the tax advantages in the equity-based game (whether of the mutual fund or individual investment variety)! Did I say earlier ... that I prefer to run my own show? Further ... though it was 60 years ago, I grew up on a farm, and farmers are used to irregular income, with loss of some potential income when a cow dies, or reduced yields due to drought or flood (but the price of diesel fuel, fertilizer had to be paid, regardless). And seasonal income, for many. How many town folks could handle getting paid once or twice a year? Plus, they manipulate not only capital, but labour - to repair the tractor, or trade it on a bigger one? Which would require getting bigger tillage equipment, as well. Put a new roof on the barn, this year ... or build it larger? Farmers were much more used to uncertainty than city folks. Or, rather, than city folks used to be. Now, with pensions shrinking and disappearing like fog in the morning sun ... and, in many areas, the values of one's equity in one's owned home (well, "partly-owned", considering the mortgage), and with employment being uncertain, with full-time work scarcer, there have been major changes in the economic picture for city folks, as well. Back up and look at the far horizon ... occasionally, at least. Good wishes for increasingly more effective use of not only your income, but of your assets, as well. ole joyful

Food for thought regarding Vanguard. Bloomberg.com-Worldwide Vanguard Managers Invested in Illegal Web Gambling, Suit Says By Andrew Harris Aug. 29 (Bloomberg) -- Executives at The Vanguard Group, the second-biggest U.S. manager of stock and bond mutual funds, illegally invested client assets in companies running Internet gambling businesses banned in the U.S., according to a lawsuit. In a complaint filed today in U.S. District Court in New York, investors in two different Vanguard-managed funds claim the firm's chief investment officer, George Sauter, portfolio manager Duane Kelly and eight trustees violated U.S. racketeering laws and breached their fiduciary duties to investors by acquiring stock in the Web-based businesses. ``Defendants caused the funds to become owners of illegal gambling businesses,'' according to the complaint. The plaintiffs seek class-action, or group, status on behalf of all similarly situated investors, plus unspecified compensatory and punitive damages. Vanguard, based in Valley Forge, Pennsylvania, has more than $1.25 trillion in assets. The company itself is only a nominal defendant in the suit that plaintiff investors Deanna McBrearty and Marilyn Hartsel styled as an action brought on the company's behalf. Rebecca Cohen, a Vanguard spokeswoman, said the company hasn't been served with the complaint and declined to comment. The case is McBrearty v. The Vanguard Group, 08cv7650, U.S. District Court, Southern District of New York (Manhattan). To contact the reporter on this story: Andrew Harris at the federal court in Chicago at aharris16@bloomberg.net. A link that might be useful: www.bloomberg.com/apps/news?pid=20601087&sid=aTnoX.S3B8MQ&refer=home

Thanks. The key feature that I found missing in the brokerage was that it was difficult to find a conservative stock fund that a) didn't have high fees b) didn't require high initial investments c) *did't* have a transaction fee...usually ~$20 every time you buy more shares! For whatever reason, this simple index-like fund is able to have both low operating fees *and* no trading fee. Janus seems to be "ok" with regard to fees as well. I was looking at their growth and income fund. It seems to cover many bases...including 20+% exposure to the international market. I'm still trying to decide. As I try to gradually buy more shares as this market slips, I'm not so sure I want the fund manager changing strategies mid-stream...so I tend to favor funds with low turnover and minimal "management". Of course, I'm only guessing that the market is going to turn down at least for a bit. I have bought in "up" markets and was burned, so now I'm going to try buying...over time... while everyone is running for the hills!

You figure that you can produce 6 - 8% annual increase in value of your assets, when a substantial proportion of them is invested in a type of asset where the principal amount can't grow, resulting in the current income being reduced not only by income tax ... but also, since the number of units of the principal can't grow, by the rate of inflation, in order that the purchasing power of the principal not be eroded?? How?? Where can you find a GIC, CD, bond or whatever interest-earning asset that can produce like that? Several years ago, a parishioner asked me how I, a clergyperson, could subscribe to "The Financial Post". I told him that bread costed me the same price that it costed him. My divorce, over 35 years ago, when clergy, " ... didn't *do* that!" ... caused deep hurt to that career. Having been a personal financial advisor for over 25 years, now at almost 80 years of age, I was until recently about 80% invested in equity-based assets ... somewhat less, now, though I sold none ... though I've used some cash on hand last year and this to buy more stocks ... whose value has gone down. Our banks and mortgage system are more strongly regulated - a recent international study has concluded that the Canadian banking system is about the strongest in the industrialized world (or, what until now *has been* the industrialized world). I bought shares in a bank 41 years ago,at $4.20 or so, paying about a dime to 12 cents dividend annually (which is taxed here at low rate, but interest income at top rate). The share value has gone up, down and sideways over those years ... and dropped substantially a few years ago, when they were involved with a rotten deal that ran by the name of "Enron". In May of '07, whatever it was "worth" ... each share could be sold for $107.00 ... and paid $3.08 dividend annually ... which was raised to $3.48 in the fall of '07. Unfortunately, the bank was involved with some nefarious mortgages in another land ... and/or some "Asset Backed Commercial Paper" ... that turned out to be more "paper" than "asset". Share price in the 90s through the summer of '07, back over 100 in early fall ... then down to 70 by year-end, 60s by spring, 50s in the summer ... 49 on Oct. 6, 55 last week, 52.74 now ... which, though it has paid about 3% dividend over the years, is now returning 6.6% dividend, at an even lower tax rate than a couple of years ago, thanks to our government which helps the rich ... as does yours. The stable portion of my asset has been ... a mortgage-related mutual fund, whose value per unit has scarcely moved in recent years, and pays decent interest - that's taxed at top marginal rate. I'm fortunate that frugal I live comfortably on less than my two gov't. and one private pensions, plus mandated income from tax-deferred individual retirement account. At age 70, I felt that I should plan to finance to age 100, i.e. 6 blocks of 5 years each. Since each dollar of the first block that I eat in the first five years is no longer able to produce income, I'd better not eat all of the dollars in that block of funds in the first five years. As I'll need more dollars to pursue the same lifestyle in later years due to inflation, that's another reason to preserve some/many of those first-block dollars. The fact that we often need to incur more medical costs, plus cost of care, e.g. residential or (horror of horrors, nursing home) during the latter days/years of our lives, that's another reason to preserve a larger proportion in the early years. It seemed to me wise not to spend more than that first block of funds in the first ten years ... and many people say that it's wise to invest much of the part of one's assets that's to run for more than 10 years in equity-based assets. That would mean that I could invest up to 83% or so of my asset in such a way. In order to qualify for employment income I must have physical, mental and emotional health well enough to carry out my assigned duties, or I don't qualify ... plus hope that my employer remains viable, doesn't shift my job elsewhere, sell out, go broke, etc. Though pension systems often suffer erosion of value of assets in a mArket downturn, so payouts might be adversely affected ... all that I must do in order to continue to qualify for my pension income is ... ... stay topside the grass! Since coverage for my living expenses via pension is pretty well guaranteed, I feel that I can play games with my investment system. Also .. when I die, there'll be disposal costs to meet, and a substantial income tax bill to pay early on. But much of the assets will be transferred to charities and my executor will get a tax-deductible receipt for full value ... plus will have no income tax to pay on the capital gain of that asset. Neither of my two offspring, as beneficiaries, will need to liquidate the assets which will be transferred into their names in the short term ... and if they need money, if the stock seems undervalued at the time, can use those assets as collateral to fund a loan (though if the proceeds were used for a consumer situation, the interest would not be deductible). Though I've seen several market downturns over the years, some lasting for a substantial period, this is the worst downturn that I've seen ... but a downturn in the markets doesn't get me all bent out of shape. Usually, the longer the downturn, and/or the further the drop, the more likely that the recovery will be strong and long ... and sometimes rise rather quickly, early on. Which means that one needs to be invested, in order to participate in the first part of the recovery. I think that the current extraordinary circumstances may mean that the market drop may be prolonged. If a deal goes through as proposed, I'll soon have some more cash to invest. If it goes on longer, I plan to use a line of credit at the bank, expanding it if necessary ... ... to continue to invest periodically through the time of reduced values. As a mutual fund manager told us sales people 25 years ago when I sold them for a brief period, "I like to buy a dollar for 40 - 60 cents". It was almost 17 years ago that I made my most recent purchase of a mutual fund: their managers, very few of whom outperform the market averages consistently, are paid too much. Plus ... they get theirs, whether they produce anything for me or not. Good wishes for developing increasing skill in managing your income and assets. ole joyful