July 2014

With summer in full swing, hopefully everyone has found some time to enjoy family and friends. Maybe, with weather permitting, we'll get out on Lake Norman to take in some fireworks this weekend. I say that every year, but as I get older I find that I'm less motivated to fight the crazies out there.

Kelly and her husband Matt have just purchased their first home, so congratulations to them. They're actually closing as this email is being sent. So, while we're all out enjoying ourselves this holiday weekend, they'll be experiencing the joys of home ownership: yard cleanup, painting, repair work, etc. Despite all the hard work in store over the coming months, they are excited to start this chapter of their lives. Judy and I are proud of the effort they have put in to get to this point, because we all know it isn't easy saving up for your first house.

Folks have also been asking about my son Tyler and how he's doing. He's been doing great! His health has been good (for those of you that don't know, he has Crohn's disease), and he's doing great at his job in Huntersville working for a mortgage firm. So, Judy and I are very happy and blessed that both kids are doing so well.

My new book, "Finding Safe Harbor in Retirement", is finally getting close to being complete. I've been working on it for over a year now, and the final draft has been sent to the editor. They'll go over it for proof reading, grammatical errors (which I'm sure there's a ton of), etc. We also need to finalize the design for the covers and come up with some pictures. But, all in all, we're getting there. It is a lot of work, but really exciting.

We'll be taking some time off at the end of the month for vacation, and we'll also be traveling for business. Tyler and I will be taking a road trip up to Wisconsin for the Packers annual shareholders' meeting, to take in a few Brewers games, and to visit some family. Then, Kelly and I will be attending some educational conferences out in Arizona at the very end of the month. I always love these things, because we learn so much every time we attend.

On the business side of things, I would strongly caution anyone about taking on too much risk! Markets are approaching all time highs, the bull market is now over five years old, and we're in a bond bubble (bond prices high, interest rates low). Now just might be a good time to take some chips off the table before you lose them? In my opinion, the writing is on the wall, and it's not a good time for retirees to get greedy (remember 2008). Kelly and I have been covering a lot of the reasons why we feel this way on our radio show, so tune in to WSIC 1400AM on Saturday at 10:00am, or Wednesday at 8:00am. You can also go to our website for an archive of all of the shows we have done.

Enjoy this month's articles, and we'll see you next month!

Until next month,

James Stillman

Mutual Funds: Are they a thing of the past,
and are they right for you? - Part 4

Lake Norman Magazine, July 2014

As most of our readers already know, we've been doing a series of articles on the pros and cons of mutual fund investing. This is the last of the series, and next month we'll move on to some alternative strategies. For our final article in this series, we'll touch on share classes of mutual funds, bond mutual funds, and mutual fund advertising.

Share classes exist to compensate intermediaries.

Investors are generally unfamiliar with the jargon that surrounds mutual funds. Funds tend to have several share class options that could impact investor returns. These include (but are not limited to):

A Shares - Also called front-end load shares, this share class can charge a sales commission at the time of purchase. For example, if you invest $100 into the Mutual Fund that has a 5% sales load, only $95 is actually invested inside the fund. The commission goes to pay your stockbroker.

B Shares - Also referred to as back-end load shares, these shares charge no commission up front. The broker receives compensation through a combination of higher marketing fees (12b-1 fees) and contingent deferred sales charges (CDSCs), charged if you sell your shares before six to seven years. BShares typically have higher expense ratios during this period.

C Shares - There is typically no front-end sales load on these shares. However, normally a 1 percent CDSC is charged against the customer's holdings if these shares are sold during the first year. A higher 12b-1 fee will continue to be charged against the portfolio until the shares convert to other share classes as stated in the prospectus.

All content is intended for informational purposes only. Any guarantees are for insured products only and are dependent on the claims paying abilities of the insurer. All investments carry some risk and you should be advised by your personal financial advidor before implementing any strategies discussed, as they are not suitable for everyone.

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This Month

Mutual Funds: Are they a thing of the past, and are they right for you? - Part 4

Special Bonus Report: 10 Things to Know About Planning Your Retirement Income

The Issues with Socially Responsible Investing

Will An Escalation in Iraq Cause An Oil Shock?