Thursday, April 20, 2006

Exit Strategy - Dan Otter Profil

Exit Strategy

You'll need to create a login to edweek to view this, but the login is free and the article is worth it. This is another profile of Dan Otter, the creator of It is a great article.


Friday, April 14, 2006

AIGVALIC Goes Single Vendor In Richmond, VA

Several years ago a bill was introduced in the California legislature to allow California Public Schools the ability to choose a single vendor for their 403(b) plans (they can actually do this already if the platform is mutual fund based). There were several companies against the Single Vendor option (which lowers costs and increases services, and should allow economies of scale to benefit the employer and employees) and VALIC was one of them. The bill was basically watered down and turned into a disclosure database which became, a landmark in and of itself.

It appears that VALIC has had a change of heart and now fully endorses the Single Vendor concept. The attached Press Release announces that AIGVALIC will be taking over the 403(b) and 457(b) programs in Richmond, VA Public Schools. I'll be following this development to see how AIGVALIC responds in California.

Scott Dauenhauer, CFP, MSFP

10 Year Treasury Breaks 5% Top Worldwide

The ten year treasury finally moved above 5% yesterday for the first time since 2002. Many have wondered how long the long term Treasuries could keep from rising along with short term rates. At the beginning of 2005 the 10 year stood at 4.23% and began 2006 at only 4.37%, yesterday it ended at 5.05%. The ten year treasury is commonly used to set mortgage rates and Real Estate is typically inversely correlated with interest rates - in other words - higher rates lead to lower real estate prices (all things being equal). The 10 year has risen by 68 basis points (.68%) in just three and a half months, that is a 15.5% increase, quite a jump. The yield curve is no longer inverted, though it is quite flat from 6 months to ten years. Interest rates are impossible to predict, though some believe that this rise in long term rates was inevitable. It will be interesting to see how this affects real estate.

The link I provided is to an article from Bloomberg which also has links to several video files that talk about this latest move.

Wednesday, April 05, 2006

WV Teachers Vote to Return to DB Plan


I think this will stop the current actions of many states who are trying to freeze DB plans and move to DC plans. I still believe the trend of moving toward DC plans is one that cannot be stopped, but I think it will take a lot longer in the state pension world.


Sunday, April 02, 2006

Merrill Lives Up To Brokerage Firms Rep

NASD - Press Room - News Release - 3/15/06

Another nail in the coffin on why you cannot trust brokerage firms - they will always find a way to separate you from your money and work in their own best interest. Merrill was fined a measly $5 million for improperly selling and servicing clients who had less than $100,000 in assets. These "undesirables" clients where switched to a Call Center program in order to be "serviced better." I was at Merrill when this initially started and knew that this would be a joke - I turned out to be right. Merrill serviced these people like Bonnie and Clyde serviced banks. Those who could least afford the bad advice where given bad advice and sold products that were in Merrill's interest. Of course the most surprising thing is that someone is surprised.