L. A. Finance
Los Angeles Chapter of AAII
income. In that year 40 percent of workers were
covered by pensions, a number that dropped to
21 percent by 2008. For most
companies
July
2012
defined contribution plans are the retirement
their pensions, Social Security and their income
from their portfolios.
The retirement scene has been changing
as corporations which used to offer defined
benefit plans, are increasingly offering defined
contribution plans in the form of 401(k)s and
403(b)s.
The percentage of workers covered by
company pensions dropped from 40 percent in
1980 to 21 percent by 2008.
Portfolio income from fixed-income
instruments has drastically declined since 1970.
Average 3-month CD rates that were 8.2 percent
in 1970, declined by 2011 to 0.2 percent. June
yield for Barclays Aggregate Bond Index on an
annualized basis was 2.1 percent. Other fixedincome returns are similarly unappealing.
Eight Key Ingredients for Retirees’ Portfolios
The first key ingredient for today’s
retirees portfolio is a focus on total return, not
just income. A portfolio that draws income
from a number of sources is needed, such as
from: dividend and interest income, tax-loss
sales, from RMD (required minimum
distribution) and from rebalancing.
A second ingredient will be guaranteed
income to provide for basic living expenses,
derived from Social Security, your pension and
an SPIA (single premium immediate annuity).
Strategies for Pursuing Your
Retirement Paycheck
By William Parmenter, Ph.D., editor
C
hristine Benz talked on the topic
of Strategies for Pursuing Your
Retirement Paycheck at the June
16 meeting of the Los Angeles chapter of the
AAII at the Skirball Center.
Benz last talked to the Los Angeles
Chapter in Sept. 2011. She is the director of
personal finance and a senior columnist for
Morningstar.com. The most recent of her two
books is the 30 Minute Money Solution: A Stepby-Step Guide to Managing Your Finances
(Wiley & Sons, 2010),
is reviewed
on page six of this
issue.
(The 36 slides
in her presentation
have been posted on
the chapter website,
under the heading
Presenter’s
Slides,
found
at
www.aaiilosangeles.or
g. Readers are referred
there for a detailed
Christine Benz
outline of her talk, of which her speech was
a verbal expansion and annotation.
Changes in Retirement Planning
Benz introduced her two-hour talk and
answer session by discussing the changing
landscape of retirement planning. In 1980 many
retirees were able to live off a combination of
their defined-benefit pensions and portfolio
Table of Contents
Retirement Planning……..Christine Benz…..….p.1
30-Minute Money Solutions…Christine Benz…p.6
Education Nuggets……..Don Gimpel…...……..p.7
Letters to the Editor……………………………..p.8
Orange Country Meeting Announcements…..…p.8
1
A third ingredient will be a sustainable
withdrawal rate so you do not deplete your
assets before you die.
A four percent
withdrawal is useful as a starting point, and may
be tweaked based on time horizon and asset
allocation.
A fourth ingredient will be to have a
stable pool of assets from which to draw living
expenses for from one to two years. These
would be CDs, money market accounts, and a
high quality, short-term bond fund.
Ingredient number five is a measure of
inflation protection to prevent rising prices from
eroding your purchasing power. You can get it
with Social Security TIPS (Treasury InflationProtected Bonds), stocks, commodities, and
floating-rate, bank-loan funds.
Sixth is a growth component for
longevity in case you live longer than expected
and to provide a legacy for your grandchildren.
You can get it with a diversified collection of
stocks and with alternate bond types such as HY
(high yield, aka junk) and foreign bonds.
The seventh component is the ability to
put your plan on cruise control, so that you do
not have to devote so much time to investments,
or, in case a not-so-savvy spouse has to take
over. This can be obtained with individual
funds or ETFs that deliver a lot of
diversification.
The last ingredient is your attention to
tax efficiency, which is easy to do, and avoids
the sizable bite that taxes can take. You do it by
sequencing your withdrawal, and hold taxefficient investments (index funds, ETFs and
municipal bonds) in your taxable accounts.
Bucket Approach to Retirement Portfolio
The approach of putting assets in three
different buckets, with different levels of risk
and different timelines, brings retirement
portfolio planning to fruition. The bucket
approach has a number of advantages:
 It allows you to build a portfolio that is
well-diversified, and you do not have to
focus on income at the expense of return.
 It enables you to have an appropriate
asset allocation according to your
income needs and time horizon.
 It lets you ride out the volatility of stock
assets, knowing that your near-term
needs are covered by safe investments.
 It includes components to deliver current
income,
income
with
inflation
protection, and longevity protection.
The first step in creating the buckets is to
determine your monthly expenses, which should
be 75 to 80 percent covered by your income
from all sources, including pension, Social
Security and annuities.
The three bucket
portfolio is aimed at filling the 20 to 25 percent
gap between income and expenses
Los Angeles County Meeting Schedule
Westside Computer Group – Don Gimpel, (310) 276-9875
dgimpel@roadrunner.com. Veterans of Foreign Wars
Memorial Bldg. Culver Blvd. and Overland Avenue, Culver
City. The group meets at 10:30 a.m., on the first Saturday of
every even month.. Topic: TBA. The UltraFS 11 group will
meet at 9 a.m. on the same day.
Pasadena Group – Meets at 7 p.m. on the third Tuesday of the
month, except for August and December at Pasadena Main
Library, in the David Wright Auditorium, at 285 E. Walnut St.,
Pasadena. (Contact, Ivan Wong at (626) 446-2486,
IWong82762@aol.com.
Mutual Fund/ETF Group —Next meeting TBA in the Craft
Room at the Santa Monica Memorial Park, 1401 Olympic Blvd.,
Santa Monica, CA 90401. Contact Gunter Hagen (310) 457-7404.
Ghagen1@yahoo.com. Meetings are free to the public.
Stock Selection Group —Norm Langhout, (310) 391-6430,
normlang1@verison.net. Meeting at 7 p.m. , fourth
Wednesday of the month, using IBD, CANSLIM stock
selection method , at Fairview Library, 2101 Ocean Park
Blvd., Santa Monica.
Los Angeles Chapter, Skirball Center, registration at 8:30
a.m., seminars from 9 a.m. to noon on Sat. July 21, James
Goldberg on How to Make Money in the Current Economic
Environment, and Paul Davis, on Medicare Basics: A, B, C,
D...Choices
Desert (Palm Springs area) Group Currently not meeting. .
For more information contact Patricia Gamino at: fastnet@msn
com. or at (760) 485-6161.
Option Special Interest Group, meets online on first, third and
when applicable, fifth Tuesday of the month at 7:30 p.m.,
except August and December. Get instructions on how to
participate from Robert Morgen at RMWall-AAII@yahoo.com.
Currently, it is a small group, providing extensive interaction.
2
The second step in creating your buckets
is to determine your withdrawal rate. The
traditional rule is four percent, with an annual
inflation adjustment. (A four percent drawdown
rate offset by a four-percent growth rate would
allow you to preserve your assets for
perpetuity.)
If you don’t use a four percent fixed rate
of withdrawal, use a variable rate of withdrawal,
adjusting for circumstances.
The main problems in today’s retirement
environment are: low rates of real return in fixed
income, volatile market subject to bubbles, lack
of savings by potential retirees, and retirees are
living substantially longer than before. Don’t be
flummoxed by the imponderables, because you
can always fall back on the infallible Chinese
method—work until you drop dead.
Let’s do a case study using the three
buckets and an imaginary portfolio of $800,000.
“What?” yelped the man sitting next to
me. “I’m 65 and I only have $65,000 saved up.
What am I going to do?” he demanded of me.
“Are you still working?” I guardedly
asked.
“Yeah, he said warily, “and, my job
seems safe.”
“Use the infallible Chinese method,” I
replied sententiously, motioning him to be quiet,
as I wanted to hear the talk.
“What is that?” he queried insistently.
“I’ll tell you later,” I replied, shushing
him.
Anyway, back to the buckets. In year
one at four percent withdrawal on $800,000 you
take out $32,000. In year two, allowing for
three percent inflation, you take out $32,900,
and, so on. What if you do not need to take out
that much? Then, leave the unused portion in
the portfolio and let it grow.
Contents of the Three Buckets
Bucket One: has $64,000, or eight
percent of the portfolio. It needs to cover two
years of living expenses. This money is kept in
cash or cash equivalents, such as money market
funds and CDs. The goal is stability not return.
You could put some of it in a short-term bond
fund like PRWBX, or MINT. (PRWBX is the
ticker symbol for T Rowe Price Short-Term
Bond Fund. MINT is the ticker for PIMCO
Enhanced Short Maturity Strategy fund.
Henceforward only the ticker symbol will be
given.)
Bucket Two: has $256,000, or 40
percent of the portfolio total. It is an
intermediate bucket to cover living expenses
from years three through fifteen of retirement.
It has a little risk, investing in intermediate term
bonds and a small percentage of equities. Their
ticker symbols are: PTTRX, MWTRX, VIPSX,
TIP, VWINX and DODBX.
Bucket Three has $480,000 or 60
percent of the total and consists of income for
years ten and beyond in your retirement, as well
as assets for your heirs. This is the long-term,
higher risk/higher reward portion of the
portfolio. Investment ticker symbols include:
VTXMX, or VXUS, VDIGX, or VIG, VGTSX,
DODGX, PRFDX and OAKIX.
Part of the mix, in the buckets, should be
income producing equities, such as CVX, FTE,
NVS and RIO, along with some income
producing funds and ETFs such as, VIG,
VEIPX and DGS.
Bucket maintenance, meaning moving
living expenses to bucket one, and moving
income distribution can be done annually or
quarterly.
Tax management in retirement is
concerned with the sequence of withdrawals to
minimize the tax hit. Take your RMD (required
minimum distribution) out of your 401(k)s and
IRA when you reach age 70 ½. If your expenses
are not covered by your pension, and retirement
payouts from IRAs and 401(k)s and your
taxable accounts, save your Roth IRA for last.
Additional Investment Recommendations
In connection with working through
another case history of retirement of a 65-yearold couple with a $1.5 million portfolio, Benz
gave additional investment recommendations
for mutual funds, as follows:
3

communication services, .78; energy, .89;
Industrials, .89 and technology, .85.
The Cyclicals as a whole had a P/FV of
.94. In that group, basic materials were .81;
consumer cyclicals were .92 and financial
services were .84. In the defensive group, only
the health sector was cheap with a P/FV of .90.
Benz finished with her best ideas for
equity investors. These were five-star stocks
with low P/FV ratios, wide moats and low
uncertainty ratings. The list: AMAT CVX,
CSCO, NVS, VMC and WU.
Questions and Answers
She pointed out that though you may
start out with a fixed 4 percent withdrawal rate,
you may have to adjust it according to
circumstances, with a goal of staying within a
band. Medical problems and natural disasters
are contingencies that would require adjustment.
In the early days of retirement more money
might be spent on travel, whereas in the last few
years of life medical bills typically will soar.
As
regards
annuities,
Benz
recommended an SPIA (single premium
immediate annuity), because it gives a higher
income stream. With a fixed annuity, it is hard
to research what you are getting. Another
problem with a fixed annuity is that the payout
is keyed to the interest rate environment, so with
interest rates being low they are not currently
attractive.
Avoid financial planners to whom you
have to pay an annual percentage. Benz
recommended the fee-only model, especially
those whom you could pay on an hourly basis
once per year.
Two helpful websites that can help you
find a financial planner are: www.napfa.org., the
site for the National Assn. of Personal Financial
Advisors, and www.FPAnet.org, the site of the
Financial Planning Association.
For further questions, Benz can be
emailed at Christine.benz@morningstar.com.
What To Do?
Benz’s talk was very well received by
her AAII audience, composed almost entirely of
Bucket Two: intermediate-term bucket:
PRWBX, HABDX, HARRX AND
VWELX.
 Bucket Three: long-term bucket:
VDIGX, HAINX, VTSMX, LSBDX
AND HACMX.
Knowing that ETFs are gaining ground
on mutual funds as investments, Benz, gave the
same recommendations, substituting ETFs, as
follows:
Bucket Two, intermediate-term bucket: BSV,
BND, LQD, TIP, and VIG.
Bucket Three, long-term bucket: VIG, VTI,
VXUS, JNK, and DBC.
Moving on, Benz put up a slide covering
the last five years of the broad market, showing
the trend in being undervalued and overvalued.
Since 2007, about 80 percent of the time the
market was undervalued. The worst was
September/October, 2008, when the market was
45 percent undervalued. Since then, it was 6
percent overvalued in March, 2011, dropping to
22 percent undervalued in August, 2011, and on
to its current status in June, 2012 as being 13
percent undervalued.
Her next chart covered the last five
years, showing the valuation of wide moat
stocks. These are defensive stocks that tend to
perform well on the downside, and which,
according to the chart, are very rarely
overvalued, and almost always undervalued.
Their worst was in September/October, 2008,
when they were 45 percent undervalued. Since
then, wide moat stocks were 20 percent
undervalued in October, 2011, improving to
fully valued in February, 2012, then dropping to
10 percent undervalued in June, 2012.
Ticker symbols of some wide-moat
stocks include: CVX, CSCO, NVS, VMC, and
WU. These stocks have wide moats, are
undervalued, have a low uncertainty rating and
are Morningstar five-star stocks.
Tightening her focus to look at the P/FV
(price/fair value) ratios she said the broad group
of Economically Sensitive stocks had a P/FV of
.96.
In that group cheap sectors were
4
up-scale millionaires, who own their own
homes, and manage a portfolio, running in some
cases into millions of dollars. It is an audience
in the top five per cent, in terms of wealth,
social position and education.
But what about the rest of American
retirees?
As the audience was leaving, and as I
started to stand up, the 65-year old man next to
me, who had only saved $65,000, grabbed my
arm. “What is that infallible Chinese retirement
method?” he asked insistently.
“Work until you drop,” I replied. “I
mean, what’s to do? Most Americans are like
you. The average family has $3,000 of credit
card debt. Many people owe more money on
their house than it is worth. They do not have
assets—they have debt. People subsisting on
minimum wage can’t save money.
“If you are lucky you have relatives you
can fall back on. In China, children traditionally
take care of their elderly parents. The society
regards it as payback for raising them as
children.”
“Well, thanks, anyway,” the guy said,
with a worried look on his face.
No money. No kids. Greater longevity.
A tough job market. A low interest-rate
environment. It’s looks like a jungle out there,
with predators on the prowl. But, fortunately
this country’s social safety net has not yet been
eliminated.
Seniors Make Do
At the main senior citizens center at
1150 E. Fourth St. in Long Beach, where I am a
volunteer food services worker, we feed around
250 subsidized, large, lunch meals to seniors
Monday through Friday. The meals cost HSA
around $7.50 each to prepare and deliver, and
are sold nominally at $2.25 each. But the policy
is no one gets turned away for lack of money, so
the actual amount collected runs about 75 cents
per meal. Money is running short, and meals at
some Long Beach centers have been eliminated.
The seniors who eat the meals are
working class people, who worked all their
lives, and now depend on this one big meal of
the day to get by. There is a lively trade around
the tables in food scavenging and swapping, as
seniors bring in plastic containers to take home
food.
Generally speaking I would guess their
monthly income from Social Security and other
sources to average around $800 per month.
How do they stretch the money? They get
subsidized public transportation on buses and
trains. A senior, bus pass costs $35 a month.
They get subsidized housing through HUD, with
single apartments going for as little as $350 per
month.
For clothes and household items they get
a senior discount at Salvation Army, Good Will
and other thrift stores, where prices are a
fraction of their retail store counterparts.
The senior citizens center on Fourth
Street is a multipurpose center and communitycreating pole for the elderly. It offers free
medical scans, health care services, no and lowcost excursions (e.g. to the Skirball Center
museum), a television lounge, a recreation
center with pool tables and ping-pong, a variety
of
classes
(including
computers
and
drawing/painting), lapidary, clothes making, a
weight room, exercise classes, bingo, and
various levels of emotional support and referral
services.
Working class retirees in America, as
exemplified by the main senior center in Long
Beach, are getting by on less. They did not plan
their retirement. What was the point? They did
not have any savings to drop into three buckets.
Their resources amounted to only a drop in the
bucket. They are meeting the exigencies of daily
living by bravely carrying on the best they can.
What about another class of elderly—the
ones with no savings, not eligible for Social
Security, no family to fall back on and too
infirm to work? They face a sad plight, so sad
that people do not want to talk about it.
A big question going into this
contentious election season is will social
services for retirees be further cut in response to
5
the government at various levels unsustainable
debt accumulation?
The prospect is for a difficult tug of war
at the national level between guns and butter,
between the military apologists and the AARP.
One thing about the coming battle is certain, as
America’s number one, and most powerful
lobby, AARP will wage a furious fight in behalf
of its constituency, the elderly—the most
politically informed and active segment of the
population.
personal finance. Although this book was not
team written, Benz acknowledges in-house
contributions from an editorial team that
included the directors of mutual fund and equity
research, investment analysts, copyeditors and
worksheet designers. The multiple contributions
give the book a highly professional and
authoritative look.
The book is an engaging and easy read,
as the 36 chapters generally run about five or six
pages, start with an anecdote to hook you in, are
tightly focused on a single topic, and scan easily
due to the use of various typographical devices.
The reader can read the book
progressively from chapter one through thirtysix, or skip to the topic of their choice, say
saving for a child’s education using a 529 plan,
or estate planning.
The book builds from introductory
topics, such as calculating your net worth, and
budgeting, to more sophisticated subjects like
retirement investing and rebalancing your
portfolio.
30-Minute Money Solutions
A Book Review
By William Parmenter Ph.D., editor
C
hristine Benz, 30-Minute Money
Solutions, A Step-by-Step Guide
to Managing Your Finances,
(New Jersey: Wiley, 2010), 295 pp., $24.95
hardback. (Available at Amazon for $19.95
hardback, used; for $9.35 paperback, new; and
$9.32 Kindle edition)
The Competitive Edge
Bookstore shelves are spilling over with
introductory personal financial management
books. For them to sell, they need a competitive
edge to stand out. What specifically does this
book have to offer? I can mention three things:
One, when talking about creating a
portfolio, the book moves past generalities, and
gives lists of mutual funds with their sticker
symbols. For example on page 102, when
talking about creating a long-term, hands-off
portfolio, mutual funds are divided into three
categories, and at least nine mutual funds are
named as candidates for each category.
It looks like this: U.S. Stock Funds:
DODGX, FAIRX, FCNTX, OAKMX, and
SEQUX; Foreign Stock Funds: JETAX,
ARTIX, DODWX, HIINX, and OAKGX; Bond
Funds: FLTMX, FHIGX, HABDX, RPSIX, and
VWITX. (Use Yahoo Finance or any other
website to look up the ticker symbols.)
This is Benz’s second book in
Morningstar’s series of books on personal
finance. Her first was Morningstar Guide to
Mutual Funds: 5-Star Strategies for Success
(2005), a national bestseller. Other books in the
series deal with selecting mutual funds, stocks,
dividend stocks, and financial workbooks.
Benz is Morningstar’s director of
6
Education Nuggets
A main reason beginners hire financial
planners at $500 a pop is because they are
clueless on picking the funds for their portfolio.
Since Morningstar is a recognized expert in
impartial fund evaluation, pre-selecting for the
tyro reader is in itself way more worth the price
of the book.
Two, Benz is actually a skilled journalist
who both knows her specific subject and the
general context of her field, through having
gone to many conferences and interviewing
many experts in various areas of the financial
field. She pulls in that expertise from various
experts she has interviewed to enrich the text.
For example on p. 225, she quotes, “I
will say that not one of my client’s retirements
looked the way they thought it was going to
look. They lived longer than they thought, they
lived shorter than they thought, they were
healthier than they thought, they were less
healthy than they thought they would be.”
So she quotes financial planner Ross
Levin from a 2009 interview, pointing out that
his statement neatly sums up the challenges of
planning for retirement. Interesting point, and
one she uses to entice the reader to read the
section devoted to retirement investing.
Three, the book gets away from
platitudes and is actually helpful to the reader on
the reader’s terms.
By William Parmenter Ph.D., editor
D
r. Don Gimpel talked about the
two handouts he distributed at
the June 16, monthly meeting of
the Los Angeles Chapter of the AAII at the
Skirball Center.
Dr. Don Gimpel
One handout, from Morningstar, was a
chart of the fair evaluation of the market as a
whole. Currently the market is undervalued by
about six percent. Readers are encouraged to go
to
Morningstar’s
website
at
www.morningstar.com. and look at the charts
on ten sectors to see if they are over- or
undervalued.
The
second
handout,
from
www.exoadvisory.com/gurus/ gave grades to
forty investment gurus. Their average accuracy
was 46.87 percent in making predictions. A
coin flip would yield .50 accuracy. You’re
better off flipping a coin and saving hundreds of
dollars on newsletters.
The top guru, Jack Schannep, of the
publication Sweepstakes had an accuracy rate of
66 percent. Not bad in an investment world that
is so risky that the professionals in the field
prefer to make their money on salaries, fees,
bonuses and other forms of OPM (other
people’s money).
Helpful Web Site
If the reader goes to the website
www.morningstar.com/goto30MinuteSolutions
they will find reference guides, downloadable
multi-page worksheets, financial calculators, upto-date investment ideas, and other planning
tools.
The book’s target audience is the person
interested in taking charge of their financial life
and looking for a book to empower them,
provide expertise and motivate them. This is
that book. And, the book does not stand
alone—it is backed up by Morningstar’s
impressive research operation.
7
Letters to and from the Editor
was developed. The first two nodes of what
would become the ARPANET were
interconnected between Leonard Kleinrock’s
Network Measurement Center at UCLA and
Menlo Park on Oct. 29, 1969. Later it morphed
into the internet. The headquarters for the
international governance body of the internet,
ICANN is in Marina Del Rey.
L.A. is center of Hollywood-land, that is,
the movie industry, and a major mover in the
popular music industry. These two industries
create the images and the icons that drive
popular culture around the globe.
L.A. is where popular authors have
defined the future: Aldous Huxley with Brave
New World (1932), and, Island (1962); and Ray
Bradbury with the Martian Chronicles (1950)
and Fahrenheit 451 (1953). The future will be
the images in our imagination as much as it will
be in our physical surroundings.
L.A. is at the center of Higher
Consciousness, with the Aquarian Age’s
fascination with mind expansion, through diet,
asanas, pranayama, and meditation, taught by
various Hindu and Buddhist popularizers, and
practiced in yoga studios and temples.
L.A. is developing a place of primacy in
contemporary arts, with oil billionaire J.Paul
Getty’s endowment of two world-class
museums, and real estate billionaire Eli Broad’s
patronage and expansion of LACMA. Broad’s
stated goal is to make Los Angeles number one
in contemporary art.
L.A., so say the realtors, has an ideal
location—one of the few places in the world
with a Mediterranean climate, where you can
snow ski, golf and go surfboarding in the same
day.
To Live and Die in L.A. to quote a
popular movie title, means to live at a particular
time in a place that is on the cutting edge of
science, culture and the expansion of
consciousness. People in the future will look
back on the Los Angeles of today and marvel, as
we do today at Greece during its ‘golden age’ of
Pericles around 450 B.C. or at Florence during
Edited by William Parmenter Ph.D.
L.A. Finance is looking for letters to the
editor. Don’t you have any burning financial
issues that need public airing? Send your
missives to the editor at
wparmenter@yahoo.com, and you will find
yourself in print.
Readers will note that Pro Forma has a
new name, L.A. Finance, and a sharper look.
About time…as editor I sided with the
collective disgust of the former name. Pro
forma means to do something as a formality,
usually in a perfunctory manner. What kind of
name is that for a financial publication? L.A.
Finance, in a more attractive type face,
designates the location of the publication and
defines its contents.
Why is the location, Los Angeles--lo
mas santisima ciudad de los angeles—
important? Is it really the most saintly city of
the angels, a gateway to the future and to the
riches of heaven and earth?
L.A. is the microcosm of the
macrocosm, the new Ellis Island, with over 100
ethnicities. You can visit communities of Tibet,
Bolivia and Kenya and never leave L.A.
L.A. is where the universe expanded
exponentially. Edwin Powell Hubble used the
100-inch telescope on Mt. Wilson in the early
1900s to challenge the reigning belief that the
Milky Way constituted the whole universe.
Based on his discoveries of other galaxies,
astronomers vastly expanded their knowledge of
the known universe, and the emergent field of
astrophysics took a leap forward.
L.A. was where America launched its
Space Age. Jet Propulsion Laboratory was
where its head William H. Pickering
spearheaded the leadership team, composed of
Wernher von Braun, James Van Allen and
himself, that launched America’s first satellite,
Explorer I, on Feb. 1, 1958.
L.A. was ground zero for the launch of
the Wired World, as the place where the internet
8
the Renaissance in the late 1400s under
Lorenzo Medici, who commissioned works by
Michelangelo, Leonardo da Vinci and Botticelli.
L.A., ok, what about the word Finance in
the masthead? AAII is an organization of
education and guidance through collegial
interchange in personal investing. Finance, as
in investing in the financial markets, is
descriptive of the members’ activities.
L.A. as a major financial center? No
way—stick with New York, London and
Tokyo—let’s avoid inflationary rhetoric. L.A.
did emerge, during the heyday in the 1970s and
1980s of Michael Milken, as a center of highyield bond financing; he led a surge in the
productivity of the use of capital. With so
many billionaires California, not just L.A., is an
important source of financing and capital.
The old art on the masthead looked to
me like an Apple 2e desktop computer, trendy
back in the mid-1980s, with a memory of about
250 MB and a floppy disk drive. The new art
shows a chart, increasingly used to track ETFs;
a calculation pad, and a book, denoting investor
education, connecting with AAII’s mission.
In addition, the publication has an
increased use of drop heads, break heads, color,
photos, and the presentation is more geared to
that of a commercial magazine rather than that
of an internal house organ. As editor I plan to
be more active in soliciting submitted articles
and letters to the editor, to broaden the scope
and the interactivity of the publication.
The sharper look of L.A. Finance is only
a work in progress. Many changes were made
in the five years since I have been the editor,
and, no doubt, many changes are pending for the
future. As my skills in computerized
typography improve, I am passing them on to
the reader in the form of an improved
publication.
If you want to let me know what you
think, I welcome your comments. Send me an
email at wparmenter@yahoo.com.
Orange County AAII Announcements
The AAII Orange County Chapter
will present:
August 20--Time-tested Mutual Fund Managers
and Investment Strategies-Benjamin Shepherd, Editor of Louis Rukeyser’s
Mutual Funds and Louis Rukeyser’s
Wall Street www.investingdaily.com
September 17--(Special Time 1:00 p.m.)
Economic Indicators, the Market and
ETFs--Matthew McCall, President, Penn Financial
Group LLC www.pennfinancialgroup.com
October --No Meeting
November TBD--Federal and State Income Tax
Law Update--Herb Farrington, Tax
and Financial Services
Location:
Balearic Community Center
1975 Balearic Dr.
Costa Mesa, CA 92626
714-754-5158
Payment:
At the door, everyone, $5/person
For more information about the
Orange County chapter of AAII and their
meetings, go to:
http//www.robertsgeneral.com_aaii.
Note to L.A. Finance Contributors
P
lease have your copy typed in
Word in 12-point, using Times
New Roman typeface. Articles
from Special Interest and Neighborhood Groups
are requested. Letters to the editor are welcome
and will be run in a separate section. Articles
from the Orange County and other area local
chapters are solicited. Readers who want to
email an article about investing or the financial
Check out the AAII Los Angeles chapter
website at: www.aaiilosanges.org.
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system will have a chance to appear in print.
Book reviews are welcome. Call if you
want to check on your ideas in advance. Email
articles and letters to the editor at
wparmenter@yahoo.com, or call the editor at
(562)-437-2412.
L. A. Finance is offered free of charge
exclusively via email and is also available
for downloading from the Los Angeles
Chapter
web
site
at:
www.aaiilosangeles.org.
The American Association of Individual
Investors Mission: AAII is an independent
nonprofit corporation formed in 1978 for the
purpose of assisting individuals in
becoming effective managers of their own
assets through programs of education,
information and research. Neither L. A.
Finance nor the Los Angeles Chapter of
AAII accepts any responsibility for
investor’s investment decisions. The
investor takes the total and complete legal
and ethical responsibility upon himself.
Caveat emptor.
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