OFF TO THE RACES

One of America’s more influential financial planners, Ric Edelman, recently advocated that successful securities investment should consist of a broad diversification of mutual funds, mimicking, he said, horserace gambling where you bet on every horse in every race.  It’s a fascinating concept; evidently Mr. Edelman is far too wise to have ever succumbed to racetrack betting.

Though it’s true that betting on every horse in a race guarantees you’ll pick the winner, it also assures you’ll lose money.  The racetrack industry operates on the pari-mutuel system, whereby a betting pool of those who select the horses finishing in the first three places share the total amount bet, minus a predetermined percentage for the management.  So betting on all the horses will result in a return of the amount bet—less the track’s take.

There’s a moral here: Only the track can be certain of a profit.  There’s an even more profound moral as it relates to investment in broadly diversified mutual funds through a financial planner.  Both the mutual funds and financial planners are positioned as is the track, in that they take their percentage off the top regardless of how the securities finish the race.

I subscribe to a different style of investment.  If corporate securities are your choice, you’ll do better to avoid the funds and the financial advisers and choose your own stocks and bonds.  Select corporations with lower price-earnings ratios that show consistent profits and which pass a portion on in quarterly dividends.  You then review your personally-managed portfolio regularly, disposing of those which fail to meet these requirements.  Admittedly, this method of investment will require both time and attention on your part, as well as initial uncertainty . . . and possibly some mishaps along the way.  However, if you’re unwilling to become personally involved in your own financial achievement, you’ll likely live to regret that decision.

Understand one basic precept: No one out there has the same interest in your wellbeing as you do.  Placing your financial future in the hands of another, no matter how favorably recommended they may be, is an invitation to untold misery.

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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

Click onto http://www.onthemoneytrail.net/

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AUTISM: AN INTENSIFYING SCOURGE

Autism: The very word strikes fear into the hearts of parents.  As the National Autism Association informs us, this neurodevelopmental disorder can occur in all ethnic, socioeconomic and age groups.  As for symptoms, there seems to be no human malfunction which cannot be attributed to this ailment, be it impairment of social skills, linguistic development, behavioral characteristics or personal sensitivities.  Whatever problem you may perceive in your offspring, it must be autism.

Fortunately we live in a nation now making every effort to combat this affliction.  The federal funding law for autism, first enacted in 2006 and regularly renewed, provides over $3 billion annually for research, services, training and monitoring by the National Institutes of Health and affiliated agencies.  In addition, scientific research grants from countless foundations ensure no shortage of contributions.  If autism can be combated by money alone, the ailment will soon be a thing of the past.

As I scan the 86 listed autism symptoms, they include: makes honest, but inappropriate observations; often uses short, incomplete sentences; may have a very high vocabulary; difficulty with loud or sudden sounds; perfectionism in certain areas; tends to tune out when being reprimanded; high skills in some areas and low in others; excellent rote memory in some areas.  As I reflect back on my youth, I recall exhibiting these very characteristics.  Could it be I suffered from autism before the ailment had been discovered?  Luckily I outgrew it without diagnosis or treatment.

One thing is clear: Thanks to continual investigation by those organizations devoted to its diagnosis and treatment, autism is becoming ever more recognized.  I’ve just learned that the number of children ages 3 to 17 previously diagnosed has increased in the past year from 1 in 68 to 1 in 45.  How can that be?  It’s because the agency designated to report on those afflicted with the ailment manipulated the format on their questionnaire so that what was previously reported as “developmental disability” became categorized as “autism spectral disorder.”  When you want to verify that some trait has become more prevalent, this is how it’s done.

A final thought: There are fortunes to be made on autism.  Whether or not any autism sufferers actually benefit from the cascade of revenue will be incidental.

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If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

Click onto http://www.onthemoneytrail.net/

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THE SCHOOL WARS GO ON

A teachers’ union official minces no words: “Our public school system is now up for sale to special interests.”  In rebuttal, the representative of a New York hedge fund responds: “Within 24 hours of the parents lawfully petitioning their own government to transform a chronically failing school, district officials chose to hide in a back room.”  And this portrays the conflict over whether to convert a standard public school into a charter school.

 

What are charter schools?  The criteria vary, but generally they differ from traditional schools in that parents are given options with regard to the schools their children attend and the rules under which they function.  Many are nonprofit, in which the teachers need not meet certification standards nor be dues-paying members of a union.  The claim is that students in charter schools will do better than in ordinary public schools.  Perhaps they do, but it’s uncertain whether it’s a matter of cause or effect.

The belligerents phrase their arguments in grandiose ways: “Children of working-class families possess the right to demand quality education,” as opposed to “Parents must have the ability to transform their chronically underperforming schools.”   But the conflict is far more profound than the hyperbole suggests.  The root of the problem is that massive amounts of taxpayer dollars follow the student, where under the formulas predicated upon Average Daily Attendance (ADA), fortunes will flow to those whose schools can be governmentally sanctioned.  It’s this perennial conflict over the money which causes the battle to rage on as it does.

I contend it doesn’t matter much how a school functions or whether the faculty is particularly competent.  Bright and motivated students will do well while those that are dull and lethargic will do poorly.  In this regard, nothing will ever change.

There’s a fundamental flaw in the American public school system which the professional educator dare not acknowledge.  It’s that there are millions of youngsters impressed into the system that have no legitimate reason to be there.  Legions of youths will grace the seats of countless classrooms and never learn much of anything.  The simple fact is that it’s designed to operate in exactly this manner.

 

♦          ♦          ♦          ♦          ♦

If you enjoy this weekly Straight Talk by Al Jacobs, you’re invited to check out my monthly Financial Newsletter, as well as my new book, The Road to Prosperity

Click onto http://www.onthemoneytrail.net/

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