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The Real Story Behind The Making Of Cool Runnings!
Greetings!
Watching the opening ceremonies from Vancouver on Friday night was exciting but unfortunately clouded with a touch of sadness. A Georgian Luge slider was killed on a training run just hours before the opening ceremonies. My brother John Morgan is a broadcaster for NBC at the Olympics and does the color commentary for Bobsled, Luge and Skeleton events. Like me, John was a National Champion in Bobsledding. This, it will be John's 8th Winter Olympics on TV reporting for ABC, CBS and now NBC. The Georgian athlete's death was hard on me because not only did I compete in the winter Olympic sport of Luge from 1978 to 1984 representing the USA in world cup racing all over Europe but also because I lost my oldest brother Jimmy in a similar accident. In 1981 I was representing the USA in Sweden in the World Luge Championships with my sister Bridget who was also on the USA womens' team. The night before our world championships Bridget and I decided to call our brothers Jimmy and John in Cortina, Italy at the World Championships. John was commentating for ABC Wide World of Sports as the expert Bobsled commentator. My brother Jimmy was Captain of the US Bobsled Team and driving the top 4 man Bobsled for the USA in Cortina. On Saturday night February 7 my sister Bridget and I decided to call Jimmy all the way from Sweden to wish him luck in his final two runs in Cortina. We found him that night coming back from dinner with the US team. It was a fun call that night back in the age before cell phones and instant internet communications. Jimmy was in 9th place right behind the Soviet Union's top four man bobsled team that ended up medaling in the 1984 Olympics in Sarajevo, Yugoslavia. Unfortunately, Bridget and I did not know it would be our final conversation with Jimmy because the next day Jimmy would die in his 3rd run down the dangerous Olympic Bobsled track in Cortina. That 1956 Olympic Bobsled course is a very dangerous bobsled track. Just four weeks after the world championships the track hosted the filming of a James Bond movie in 1981. A stunt athlete was also killed filming that movie.
The sliding sports of Bobsledding, Luge and Skeleton are very dangerous sports demanding tremendous concentration and finesse from the athlete. Women just started to race in Bobsled and Skeleton a few Olympics ago. Our US girls are very very good. One false move can mean the difference between a gold medal and a terrible crash or worse. For some of you that are confused about which is which, Skeleton is headfirst and Luge is feet first.
Just three weeks before the 1983 World Championships in Lake Placid I crushed my left elbow in a training accident and went from USA #1 top slider to sitting on the sidelines and watching the Russians and East Germans and Italians win medals on my home track.. It was the last time I would ever have had a chance to compete against the Europeans on my home track as I was to retire in 1984. If you go to our web site at ok401k.com and click on the story "Why I Am Not Surfing Anymore," You will see a picture of me winning the 1982 US National Luge Championships. That accident in 1983 prevented me from making the team in 1984. I just could not capture the magic needed just 11 months later to get ready for the Sarajevo 1984 Winter Olympics! When you are racing at super fast speeds, your body has to be moving perfectly. It will be interesting if our top girl skier Lindsey Vonn can get ready for the womens downhill this Wednesday night! She is trying to recover from a terrible leg injury.
I was looking today at the picture in the Sunday New York Times of the poor family from Georgia lamenting the loss of their son. It was a tragic picture showing a family and their friends lost for words and probably depleted of emotion. It's a tough moment when you lose a loved one and especially in something like a sporting accident where you are representing your country. I watched John on Saturday night reporting to Al Michaels from the Bobsled/Luge/Skeleton track 80 miles away from Vancouver. I could see how pained and tight John was reporting about the luge athlete's accident and especially how dangerous this new Vancouver Bobsled/Luge/Skeleton track is. When I was racing the top speed we could hope to achieve was 75 miles per hour. The athletes at this track are now approaching 100 miles per hour and I just don't see how the Luge and Bobsled athletes can react safely to get their sled down the hill. The Olympic committee working with Luge officials decided to drop speed for the men' competition from their higher elevation start down to the women's start where the speeds seemed more manageable for the athletes. I pray that the rest of the competition for the men and women in Luge, Bobsled and Skeleton go with out incident.
I promised a fun behind the scenes story about Cool Runnings. In 1988 my brother John Morgan along with famous Pittsburg Steeler wide receiver Lynn Swann were called upon by ABC to offer fun commentating at the Olympic Bobsledding at the Winter Olympics in Calgary, Canada. If it were not for Lynn and John's exciting behind the scenes story of the Jamaican Bobsled Team, you would have never seen the hit Disney movie Cool Runnings. I spent time with John and Lynn one day in Calgary. All they talked about were the crazy but athletically talented Jamaicans. During the Olympics, ABC switchboard lit up back in New York asking for more video of the kids from the Caribbean. We never dreamed their broadcast would lead to the movie. Here is a behind the scene tid bit. Disney called my brother John to play himself in the movie. He said, "no problem, just pay my way and I am there for production.' I don't think he made much money. Anyway, Disney called Lynn's agent. I don't know the complete story because his agent will always deny it. But, I am suspecting that Lynn's agent wanted too much money or maybe there was a scheduling conflict. Bottom line? Disney could not get one of the greatest NFL receivers of all time and a pretty darn good sports commentator to play himself in the movie. So, Disney ended up getting famed sports caster Al Trautwig to play along with John in the Cool Runnings movie which ended up being John Candy's last movie. And, in 1993 this fun low budget Disney movie ended up being the #1 hit movies of 1993 in the USA. And, from what I hear it was Disney's top grossing film. I never saw Lynn after those Calgary, Canada 1988 Olympics but I am sure he regretted not being in that fun movie.....Cool Runnings. And, now you know the rest of the story.
Where are the Jamaicans for 2010? They did not qualify for these Olympics. It's a shame. Since they started their fame off in Canada I think the Olympic Committee should have given them a waiver. So, unfortunately for 2010 we will not see any cool runnings. Watch the four man and two man Bobsled events. My brother John gets quite animated and excited. The USA has a great chance at winning medals both for women and men. It should be exciting. Check out the event and email me back and tell me what you think?
Want a ride on a Bobsled in Lake Placid or Salt Lake City, Utah? I can arrange it only if you have the guts and money to fly yourself up there and get on a sled! If you're faint of heart, watch the Bobsled this week on TV and my brother will give you an interesting and colorful commentary on what it is like! Enjoy the Olympics!
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| Ok401k Quarterly Fund Family Rankings Are In! How Did Your Favorite Fund Family Do This Quarter?
Since 2005, Ok401k has had a special relationship with the Fi360 program based in Pittsburgh, Pa. They are not only sponsors of the Accredited Investment Fiduciary program (AIF), which we subscribe to as a 401k professional advisor, but also produce the internationally acclaimed Fi360 investment management screening tool.
Since 2003, fi360 has produced a quarterly research report on the major fund families. The fi360 Fund Family Fiduciary Rankings™ report ranks fund families by the percentage of their individual funds that have either a "Passed" (fi360 Fiduciary Score™ 0) or "Appropriate" (fi360 Fiduciary Score™ 1-25) classification. It also presents the change (improvement or decline) in ranking from the prior quarter. Fund families must contain at
least five distinct funds with a 3 year history to be considered in the report.
Fiduciaries-such as trustees, investment advisors, and retirement plan investment committees-are required
to prudently manage investment decisions. As such, when a fund family is implicated in wrongdoing, the
fiduciary must show evidence that a process was followed in deciding whether or not the fund family should be retained. Knowing the fund family's overall fiduciary ranking can significantly help in reaching a sound decision, and demonstrating that a prudent process was followed.
The Fund Family Fiduciary Rankings leverage existing technology built by fi360 to determine the fi360
Fiduciary Score of individual mutual funds and exchange-traded funds. The scoring system ranks funds within their peer group as:
"Passed" - fi360 Fiduciary Score™ 0
"Appropriate" - fi360 Fiduciary Score™ 1-25
"Watch (2)" - fi360 Fiduciary Score™ 26-50
"Watch (3)" - fi360 Fiduciary Score™ 51-75
"Watch (4)" - fi360 Fiduciary Score™ 76-100
The fi360 Fiduciary Score - Quarter is calculated on a quarterly basis by first combining the Morningstar mutual fund and ETF databases. Each fund's share class is then evaluated against the nine fiduciary due diligence screens and point system identified in the methodology document available at http://fa.fi360.com/help. The points are totaled and ordered from lowest to highest within each peer group. Funds with 0 points are automatically given a Fiduciary Score of 0. Remaining funds are given a percentile ranking based on their total
points relative to the distribution of points in their peer group. This results in the fund earning a Fiduciary Score between 1 and 100.
Therefore, a Fiduciary Score of 0 is most favorable. It represents that a fund meets or exceeds all of fi360's recommended fiduciary due diligence screens. A Fiduciary Score of 100 is least favorable. As an example, consider a Small Value fund with a fi360 Fiduciary Score of 37. This means that the fund places in the 37th percentile of its Small Value peers based upon its evaluation against the fi360 fiduciary due diligence screens.
Top 50 Ranked Fund Families for the 3rd Quarter In Our Fi-360
1 T. Rowe Price 78.46%
2 Marshall 75.00%
3 Buffalo 75.00%
4 Vantage point Funds 74.19%
5 Parnassus 71.43%
6 Manning & Napier 70.00%
7 Barclays Global Investors 66.67%
7 Oakmark 66.67%
9 Artisan 66.67%
9 Robeco Investment Funds 66.67%
11 Frontegra Funds 66.67%
12 TIAA-CREF Mutual Funds 64.18%
13 Capstone 62.50%
13 Commerce 62.50%
15 Vanguard 62.34%
16 FPA 60.00%
16 WesMark 60.00%
18 Alger 58.14%
19 Brown Advisory Funds 57.14%
20 Homestead 57.14%
21 Maxim 56.67%
22 Dupree 55.56%
23 Baird 53.85%
24 Victory 51.72%
25 American Beacon 51.43%
26 Nationwide 50.00%
27 Smith Barney 50.00%
28 Matthews Asia Funds 50.00%
29 AdvisorOne Funds 50.00%
29 Leuthold 50.00%
31 USAA 48.48%
32 RidgeWorth 47.92%
33 JennisonDryden 47.88%
34 Thrivent 47.73%
35 John Hancock 47.32%
36 VALIC 46.67%
37 First Eagle 46.67%
38 Loomis Sayles Funds 46.15%
39 Franklin Templeton Investments 45.78%
40 MFS 45.61%
41 Northern Funds 45.45%
42 Sit 45.45%
43 TCW 44.83%
44 Thornburg 44.44%
45 First American 43.42%
46 Mellon Funds11 43.24%
46 Schwab Funds 43.24%
48 Nicholas-Applegate 42.86%
49 FBR Mutual Funds 42.86%
49 Oak Associates 42.86%
50 Janus 42.47%
GONE AWOL. Notably absent are dynamic fund families, Fidelity and American Funds. American Funds, a huge leader had $1.19 trillion (yes TRILLION), in October 2007, Since then there has been more leaking going on than a New Orleans dike after a hurricane. According to Investment News magazine story recently, American Funds total long term fund assets stood at $880 billion down from 1.19 Trillion. At the end of September, this loss had put it behind the Vangaurd Group Inc., with $1.01 trillion and Fidelity Investments picking the 3rd place ranking with $709 billion.
LEAKING ASSETS? Meanwhile, Vanguard and Fidelity have seen inflows this year. Vanguard had $27.5 billion in net new flows, while Fidelity had $8.6 billion. American Funds in September year to date had outflows of $19.3 billion.
SOME FUNDS BEHAVE DIFFERENTLY? Size does not mean success. Many of the funds in our ranking you probably have never heard of and pale in comparison in the amount of money they manage to the "big 3" we mentioned. The outflow of money from American Funds though from Ok401k's point of view does make for some interesting observations and the real key here for 401k plans that may have all their fund chices with just American Funds or any fund family. According to the Investment News story by David Hoffman, "American Funds domestic-stock funds, which account for more than 38% of it's assets, receive a fund family score of three from Morningstar, indicating that the group is about average." Bottom line? Some fund families excel in different economic times (bull or bear) and have particular mutual fund investment choices that can really help your employees long term.
ONE SHOE DOES NOT FIT ALL! What does our ranking up above mean to you and your 401k plan? Well, it is of the opinion of Ok401k as a leading independent advisor that no one fund family has ALL the best investment choices. Unfortunately, some 401k vendors sell 401k plans that strangely sell only their proprietary investment choices which unfortunately and unnecessarily put YOU, the plan sponsor in a precarious fiduciary position.
T.Rowe Price is listed as our "top dog" or #1 fund family for the 3rd Quarter. This does not mean that this fine fund family has ALL the best investments. This ranking is merely short term and is a total score based on how all their funds did for one quarter. Our fi360 software enables us to look back long term and compare how each fund family and their individual funds stack up against each other (peer group). Since we are independent, we don't care who our 401k clients are with. As long as they have great investments and low fees.
To See the total rankings of all funds in this quarterly report in an easy to access PDF, just go to our web site at www.ok401k.com and click on the page from the front page the access to our "Fund Family Quarterly Rankings". |
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Bloomberg.com Hard Hitting Newstory Reveals 401k Hidden Fees.
More then ever, employers in Oklahoma and around the nation are seriously looking at their 401k plan fees both revealed and the ones 401k vendors don't want you to know about. The reason? When the market is down, this is the time employers should be making changes or asking their 401k provider to lower these high fees that affect their employees retirement balance.
At Ok401k we have seen many great news reports from the media that educate employers about hidden insurance or mutual fund company fees. For the first time one of America' s leading business media reporters have finally got the hidden 401k fee game right. Click on the link below to access this stunning report on how your employees may be paying more then they deserve to invest in your 401k plan at work.
What is the next step? If you supervise your 401k plan, you have a fiduciary responsibility to be aware of these fees. Why? The world "fiduciary" means simply that you are responsible for other people's money. And, that means specifically your employees 401k money. Your employees are relying upon you to get them the bang for their investment buck. We can help you. At Ok401k we have a unique comparison program that reveals these hidden fees in an easy to understand and colorful report. Call us at (405) 603 4986 for your free review.
Terrence Morgan, AIF
President
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The Worst 401k Target Date Funds To Offer Your Employees Are.......
Guessing in business can be dangerous especially if you're economists on Wall Street or the trustee or fiduciary on your company 401k plan. Regarding the science of economics 101, Oklahoma's own Will Rogers once said that; "an economist guess is liable to be as good as anybody else's" Edgar Fiedler who seemed to not like Ivy Leaguers said; "Ask five economists and you'll get five different answers - six if one went to Harvard."
An Objective Analysis That Compliments Your 401k! Guessing as a strategy in trying to evaluate a target date fund inside your 401k plan could have far reaching and terrible consequences for your employees who are relying upon you more then ever to pick the appropriate menu of funds. Guessing is not an option. There are very advanced software systems leading 401k advisors use to evaluate fund choices these days. Not to be out done, Ok401k enjoys one of America's leading 401k analyzers called Fi-360 Tools software. Fi360 Tools are considered by many investment professionals to be a leading, global resource for investment fiduciaries, providing research, analytical, and reporting services. The array of products and services offered under the Tools business line are designed to aid advisors like Ok401k who serve as or support investment fiduciaries.
Pushing Their Own Choices! The first place to begin for employers in trying to decide to offer target date funds is what inventory of target date funds are available to you to select from? Is it just the ones from your 401k vendor? Many 401k vendors push their own proprietary target date funds and will not provide you access to other choices even if the other choices are better. Having your 401k provider decide your target date selection by default is like having the Captain of the Titanic tell you, "Don't worry, we only have enough life boats for half the guests on our maiden cruise but we are unsinkable, so what difference does it make?" There is a science out there in selecting 401k investments and you better be sure that your target date funds fit your employee's goals and objectives. You see, ERISA mandates that 401k Trustees (you the employer) have an Investment policy review/process in place to select and monitor your investments that are offered to your employees. You and your 401k committee should be well insulated from potential litigation if your 401k advisor has a well documented and well thought out analytical process on your investment choices and target date funds.
We Are #1! Last week I attended the Plan Advisor Magazine's National 401k Advisor Conference in Orlando, Florida. I was the only 401k professional from Oklahoma to attend this important national conference for advisors that specialize in 401k plans. Most of the leading 401k mutual fund and insurance company vendors were there exhibiting. These fund providers that sell 401k plans were of course saying that their bond funds, international funds, mid cap, small cap and large cap funds were all the best, especially their Target Date Funds.
Just Two Flavor Styles! For the purpose of this Ok401k story, target-date mutual funds come in two flavors. Unlike Braums ice cream stores throughout the southwest which has an incredible selection of ice cream from funky monkey to mint chocolate chip which is my son's favorite, you better be aware of these two different target date flavors or philosophies because the one flavor the target date fund manager uses may not fit your employees' style of investing. One target date style anticipates your worker at retirement date cashes out in their 401k and moves their money to an IRA. The second flavor or strategy is the assumption that the worker does not cash out at retirement and keeps their money in your 401k plan during retirement. What strategy is good for you and your employees? As an employer you better fully understand when you pick a Target Date Fund family for your workers, if the fund family is managing the money to retirement date or to 20 years after retirement which we at Ok401k think is ridiculous and full of liability. This is called the "Glide Path".
Retirees Are Not Leaving Their Money Behind! We asked Fidelity, one of America's largest 401k vendors, what percentage of assets do they retain when a worker retires. The answer we received was less then 50%. This means, that if all the rest of America's retirement plans are like Fidelity's 401k plans, the typical retiree is taking the money from their 401k plan faster then Johnny Depp playing John Dillinger in a bank heist movie.
Glide Path Does Make A Difference! Target date funds are the perfect auto pilot style of investing for your workers. I personally love them because quite frankly the vast majority of employees are incapable of selecting and monitoring their portfolios during the working years. Target date funds allow a worker to pick the year they are going to retire. For example, if I am 30 years old that would mean I have about 35 years to retirement and would pick the 2045 Target Date fund portfolio. The fund company then manages the money for the employee, rebalances the portfolio at least annually and diversifies it between fixed income and equities. Some target date funds are more aggressive then others and have a higher exposure to stocks. Some target date funds only use their proprietary fund managers which may be a disadvantage and some companies can have a "Glide Path" that manages the money way past the year your employee has retired which is really the "gist" of this discussion today and a name you as an employer should become familiar with. The GLIDE PATH is what can get your 401k plan in trouble folks and you better become aware what this term means.
Minus 8% or Minus 43%? Quick, what 2010 Target Date fund from what famous fund family suffered almost a 43% loss in 2008? On the other side of the spectrum, what famous 2010 Target Date Fund from another fund family experienced only an 8% loss in 2008? Which loss do you think your 63 year old worker would have liked in 2008? An 8% loss or a 43% loss in their 2010 Target Date Fund? The 2010 target date fund that lost 8% had a conservative low exposure to stocks at the workers assumed retirement age in less then two years. , the other one that lost over 43% had a longer glide path thus heavy exposure to stocks way past the workers retirement age.
Dismal Returns! Let's put this into perspective. If you averaged out all the 2010 Target Date fund returns in 2008, the average 2010 Target Date fund lost approximately 28%. So, this means that more then likely your worker with one or two years to go to retirement lost over one fourth of their retirement portfolio in a 2010 Target Date Fund which is equivalent in Ok401k's eyes to medical malpractice. Our Ok401k review of most 401k target date funds found quite a few fund managers are assuming (first three letters of assume?) that your worker will not take their money out of the 401k plan and they will keep managing it way past retirement. Is this what is going on now in your 401k plan when a worker retires?
Industry Wide Embarassment in 2008! At Ok401k we thought this was quite embarrassing to the Target Date Fund industry when the whole enrollment process to employees was to encourage them to let a professional 401k money manager diversify their 2010 portfolio, rebalance it for them and help them invest professionally for the long term! For the average Joe Blow 401k participant just two years from retirement that does not know much about investing, I thought the results were quite dismal for professional money management in the target date industry. Currently Congress, along with the Department of Labor and other interested parties, are investigating the impact of target date funds on participant accounts after the 2008 melt down.
The Glide Path Game! Now, let's finish this story up with the glide path game you better be aware of. Some target date funds, typically the more conservative ones, build their glide path to end on or about the anticipated retirement age of the participant, the "targeted date," like the 2010, expecting the participant will take the money in cash---either personally or in an IRA and make a new investment decision. That design reflects a belief that neither the manger or the target date fund nor the plan sponsor knows what the participant's retirement investment decision will be. We at Ok401k believe that this is the more "prudent" decision for the 401k committee. An employer should make sure that the purpose of a target date fund is to reduce volatility as a worker nears retirement. Some target date managers structure their glide paths, to continue beyond retirement. We think this is rather presumptuous and unprofessional and may jeopardize the employees balance at retirement. These target date fund managers have a glide path that goes almost 20 years down the road assuming that they will still be managing your employees money at retirement, thus their portfolio at retirement will be a lot more aggressive then perhaps it should be for someone at retirement. These aggressive portfolios got pounded and lost workers close to retirement a lot of money.
Bottom line? You better have a philosophy in place and understand how your employees feel about their money at retirement if you are offering target date funds inside of your 401k plan. Will they take the money and run or keep it with you till they begin to take withdrawls in retirement? Ok401k has a complete report on over 250 target date funds and their strategy. We can help you ascertain if their money management strategy fits your employee's strategy. Give us a call at (405) 603 4986 or email me at terrencemorgan@ok401k.com
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Terrence Morgan, AIF
Ok401k, Inc.
(405) 603 4986
Terrence Morgan, AIF is a Registered Representative of and offers securities though Wilbanks Securities, Inc. Member FINRA & SIPC. Securities activities supervised from Wilbanks Securities, Inc. at 4334 Northwest Expressway, Suite 222, Oklahoma City, Ok. 73116. (405) 842 0202. Fee based through Wilbanks Securities Advisory. Fiduciary status requires employer being given WSA ADV form Part II and a fee agreement must be established. |
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