The SEC has very strict guidance on how mutual fund performance may be reported.  When you go to sites such as Yahoo Finance, Google Finance and if you subscribe to Morningstar, you will always find the same reporting standards for monthly, quarterly and annual performance for mutual funds.

Unfortunately, it appears the “media” in personal finance has another Agenda, as we have written about with the New York Times, as in this Blog Post, “Hello New York Times, Please Define “Conventional Money Management”.

In an April 10, 2014 Bloomberg article: Mutual Fund Leaderboard: Who’s on Top in 2014? by Suzanne Wooley, Ben Steverman and Bloomberg Rankings, we analyzed one of their top picks for their large cap blend category.

What is the source of the Bloomberg quarterly returns?

What is the source of the Bloomberg quarterly returns?

 

We have asked Bloomberg for clarification on their methodology and sources, as shown to the left and have not heard back from them.  We wanted to confirm we have not made an error.

Take a look at Not On My Nickel’s research methodology and you be the judge.

Bloomberg selected the Dreyfus Fund (DREVX) as their  top performing large cap blend in its category for First Quarter 2014. Their methodology:  “Bloomberg Rankings identified the top-performing fund in each category.  Included were U.S. -domiclied retail mutual funds with a return above 7% in the first quarter and at least $250 million in assets”.

Here is what Bloomberg’s slide is telling retail retirement investors – that the Dreyfus Fund’s first quarter return was 10.7%. Bloomberg Mutual Fund Leader Board April 10, 2014

What should you look for in personal finance articles on mutual fund performance?

(1) Consistency in reporting standards for returns.

(2)  Performance over several periods and never just highlights for a Fund manager’s quarterly returns that simply serves to encourage performance chasing.

(3)  Always includes the overall fees and portfolio turnover for the fund, including references to the management style and the portfolio holdings.

Pictured to the right are the Total Returns for the Dreyfus Fund (DRVEX) as of 3/31/14,Morningstar total returns for DREVX as reported by Morningstar.  There appears to be a significant discrepancy from what Bloomberg reported for first quarter returns:  10.7% vs 1.23% for Quarter ending 3/31/14, as reported by Morningstar.

Bloomberg Has Done Excellent Work on Institutional Side

Quite frankly we are perplexed by this reporting and await Bloomberg’s explanation for what appears to be a significant misrepresentation.  However, Bloomberg is not subject to SEC oversight and has more latitude than the fund companies in reporting performance.  But, this still is not in the best interest of their retail retirement investors who read their reporting.  It may harm their portfolios with improper return data being published, if selections are based on their inaccurate reporting.

Your Independent Research vs Bloomberg’s Leaderboard

You be the judge.  Do you want biased information from conflicted media sources or unbiased research, tools and training to make an informed decision for your retirement nest egg.  The chart below is for 6 months to give a touch longer time horizon.  However, Not On My Nickel urges our subscribers to look at our Six Criteria (Under Save our Sanity) in selecting any portfolio manager.  Only select a manager that has a minimum of five years SEC – filed audited performance.

One should also note the fees in the Bloomberg top large cap blend selection are higher than the Not On My Nickel ‘s researched large cap blend fund. The portfolio turnover is just 3.79% in the fund below and is over 72.91% in the Dreyfus Fund.  Portfolio turnover is directly related to very high trading costs that take away from your returns—money out of your pocket.

We still have not heard from Bloomberg on their “return” methodology for their “Mutual Fund Leaderboard:  Who is On Top in 2014?”  It appears personal finance columns, in media that should be providing a service to retail retirement investors are providing a major disservice.  The New York Times and now Bloomberg reflect the state of the retail retirement “advice” market- disingenuous, misrepresentative and very conflicted.  Reader beware.

You Be the Judge – Why Did Bloomberg Represent, DREVX, as the Top in their Category-or is NOMN in Error?

Not On My Nickel Researched Fund v Bloomberg Top Pick

 

 

Education = FutMP900341471Remember Not On My Nickel’s Number One Rule

Make only informed choices through proper education and financial tools. Do not take advice or pay an assets under management fee to any “investment advisor” or “financial advisor” that does not file regular performance returns, against a widely published index, with the Securities and Exchange Commission, SEC.

This includes paying for investment advice to a CFP or to new online start-ups, such as Betterment or Wealthfront While their intermdediary fees are lower, it is still the same flawed “assets under management” business model. Until any investment adviser can deliver published performance returns against an agreed upon index, (for a minimum of five years and ideally 20 years) do not do business with them. The risks are too great.

Remember, just because the business model is online and costs less, it is not necessarily any better. Performance does matter. Modern Portfolio Theory, that these online services are based upon, has significantly detracted from retirement savings performance. Not On My Nickel experiential education and tools help you understand the pros and cons of Modern Portfolio Theory. It is in your best interest to make an informed choice on why or why not you would want such an online service to manage your money. Without the education and the proper tools, you cannot make an informed choice.

The Incredible Power of Informed Choice and Education in Leveling the Playing Field

If Americans would begin to follow Not On My Nickel’s most simple rule an industry would be transformed. Through the elimination of this financial intermediary, the financial advisor, societal benefits would be profound:

  • Senior fraud, through confusing certifications, would be close to being eliminated, since these intermediaries are redundant. Informed choice and education would reveal that..
  • Regulatory costs would be close to cut in half as most investment fraud and Ponzi schemes could be eliminated through transparency and bona-fide education. The SEC budget would decline and save significant tax-payer dollars.
  • 401(k) plans and 403(b) plans would change immediately, if every employee used their brokerage window and placed their money with the top performing portfolio managers. The poorly performing mutual funds would simply go out of business.
  • Americans would have significantly more money in their retirement nest egg. Significant sources of revenue would shift from financial service firms into the pockets of middle class Americans at their retirement.
  • Many jobs would be lost, yet new ones would be created in areas that add value to society overall. Financial service firms would be forced to focus on the true societal benefit, prudently managing retirement assets and the best way to deliver the best performance, not skimming off easy middle-man fees.
  • High-fee fund of fund Target Date funds that solely benefit financial service providers, not retirement investors, would disappear.

Why Do I Not Know About the Services of Not On My Nickel?

The Wall Street Journal or the New York Times and most press sources simply report on the firms that generate a revenue stream for them or they agree to the story due to a PR team that gets them to cover it or are connected to the firm since they have “Silicon Valley” venture capital funds. Not On My Nickel does not fit any of those categories.  Not On My Nickel is a new business model different from current financial services firms:

  • Financial service firms will never train you or educate you on how to take charge on your own. They will not provide transparency. Their future is dependent on taking a percentage of your retirement assets or annual planning fees. That is their business model, whether or not it adds any value to your nest egg. Not On My Nickel represents transparency and information to enable informed choice, so one can determine why or why not they should have or not have a “middle-man.”
  • Not On My Nickel takes a little work, for the retirement investor, upfront. Therefore, not many people will “like” us on Facebook or Twitter. We are not the easiest and quickest solution, but we are the best and only solution today. One has to have the inclination to invest some time to learn how to select a portfolio manager on one’s own. Not On My Nickel completely understands that taking the time to do so, is not easy. Work hours are long, families need attention, the house needs to be cleaned. One wants to have some down time on the weekend.
  • Not On My Nickel strictly focuses on the tools that enable an experiential learning to involve every level of investor in their bottom line immediately.  There is not sorting through difficult investment concepts from ‘growth’ to ‘value’ to ‘small-cap’ to ‘mid-cap’.  The learning rewards are immediate allowing excitement in the ability to take charge of one’s financial affairs.

We understand the realities of time constraints and a ‘boring subject’ matter.  We have the techniques to overcome these issues. We will work with you to make you feel comfortable taking charge.. We are up against the media and the financial services firms whose future depends on a chunk of your retirement. We are up against the trillions of dollars of ad budgets, TV budgets, Congress, and the SEC that are all promoting this failed business model that is NOT in the best interest of the retirement saver or society overall.  We are up against an industry that wants to keep you in the dark.

servicesHow to Maximize Your Retirement Returns?  

Join us today and get started on maximizing your retirement investment returns, that will increase substantially through bona-fide financial education and transparency, not self-serving financial advice.    Please read our Part IV Blog, tomorrow, for more information and details on how to get started.  We look forward to hearing from you.

 

Education = FutMP900341471Where Should I Go For Investment Advice? I Do Not Know Where to Begin

Not On My Nickel is here to provide you the basic education and ongoing research so you can hire your portfolio manager on your own, who will provide you investment advice that is not conflicted and where there are no hidden fees. It is the first and only fully transparent bona-fide retirement investing education service and portfolio manager research service.

Not On My Nickel works with you to provide you with the tools so you no longer need to be dependent on untrained, conflicted, self-serving sales personnel. We start with the basics and give you the life-long tools to manage your retirement savings, through transparency, education and unbiased research. We help you learn how to make these most critical decisions on your own:

 

  • How do I select the best portfolio manager(s) for my 401(k) or IRA?
  • Do I need to trade my IRA or 401(k)? Why you should not do so. That is why you hire a professional, experienced portfolio manager.
  • What are the best choices for my small business, to offer retirement savings to my employees?
  • What about asset allocation? You will learn about cash investments, why to avoid money market funds in today’s unprecedented interest rate markets, what is “voluntary recapture”, the dangers of bond funds and how to select the best long-term investment strategies from portfolio managers who have proven styles that have withstood the test of time.

In sum, you will be given bona fide education and the proper tools and training to effectively manage your retirement nest egg.

Not On My Nickel has six strict criteria that you will learn to aid you in evaluating who should manage your retirement nest egg–whether you have just started saving or have amassed a large retirement nest egg.

Not On My Nickel’s Experiential and Independent Curriculum

Not On My Nickel is the very first experiential curriculum for retirement investing that empowers you to cut through all the advertising and the self-serving advice designed to benefit the Advisor. We provide you the financial tools to help you make the determination on why one portfolio manager is better than another. Remember that the “advice” from your 401(k) or 403(b) financial advisor, providing Department of Labor mandated financial “education” is not really education. It is simply comments designed to get you to work with their firm, buy more financial products from their firm, save more in their products or pay annual fees for managing your life savings.

Not On My Nickel is not dependent on any financial services firm. We do not receive any form of payment from any financial services firm. We are the only bona-fide retirement education firm, independent education and research firm, that exists today.

Visit Not On My Nickel’s Blog tomorrow for Part III in our series “Best Retirement Returns Come From Transparency and Education, Not Conflicted Advice.”