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Getting Personal

Getting Personal

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Chris Farrell is the economics editor of Marketplace Money.
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The last caller on your 8/2/08 show asked Chris Farrell about managed funds. Chris missed the opportunity to inform the caller that, on average, actively managed funds do not outperform index funds anywhere near enough to pay back the higher management fees they charge.

The last caller on your 8/2/08 show asked Chris Farrell about managed funds. Chris missed the opportunity to inform the caller that, on average, actively managed funds do not outperform index funds anywhere near enough to pay back the higher management fees they charge.

I cannot understand why financial advisers always say to leave you money in the market. I have taken my money out of the market and put it in CDs twice in my career. Once prior to the .com crash and the next time prior to the housing crash that we are currently experiencing. Why was my view of the market wrong? Why is the fact that I was wise enough to know what does not work in the economy and pull my funds out, wrong? I just can't see it and neither can my balance; untouched by both falls in the market and much larger as a result. If you look out into the world and say to yourself, "this will never work." Isn't that a good time to protect your nest egg? How many people today can say that they are making six percent. I'll bet it is not very many. Most have lost loads of money and are now making two percent. It just makes no sense to me. Sure there are a few funds that have done well. None of which were funds where we had money, nor were they easy to predict. A CD was a much better bet and represented a "market timing" decision.

I will be retired in 3 1/2 years, at which point my defined benefits plan will pay out approximately 1/3 of my current salary. I will have about $1 million in investments (fairly well diversified). To reduce the potential for erosion due to falling stock prices I would like to know what you think of selling those investments and putting the money into federal treasury notes? I know there will be a tax hit but if I do it when my income is reduced by 2/3 it might not be that bad. Your thoughts?

Want to retire: what advice? We have little soc.sec. self-employed,kids done. Assets in biz R.E. total 500,000 (in N.Mn that's alot)& home about 5-600,000;Annuity 50K, IRA 50K inheret-
ance soon 500,000. Don't trust brokers.
Ages 56(F)58(M) good health. Comments?

I have $75K which I would like to "park" in an interest earning method highest possible) which I can access in case of emergency. I am retired, in the $80K annual income range. Thanks!

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