Unfair funds; tuition breaks; air bags
|Jump to:||Choose article section...Are mutual funds playing fair? A refund check could be in the mail Make sure your side air bags pad your head Lock in tuition at private colleges Online hotel deals aren't always better|
New York Attorney General Eliot Spitzer is probing trading practices at several prominent mutual fund companies. The charges: shareholders are being robbed of billions of dollars a year in improper trading practices that favor large institutional clients over ordinary investors. Fund families now under scrutiny include Bank of America's Nations Funds, Bank One, Janus Capital, and Strong Capital Management.
The investigation centers on charges of late trading and market timing. Late trading (buying fund shares after the market closes and trading them the next day for a profit) is illegal. Market timing (moving in and out of mutual funds to take advantage of market conditions) isn't illegal, but most fund companies bar the practice because it puts individual investors at a disadvantage.
If you bought class A mutual fund shares of a font-end load fund but didn't get a fee discount, you may be in for a sizable refund from your broker. Mutual funds often give discounts on front-end sales charges for large investments that exceed a certain level, called a breakpoint. But the NASD, which regulates brokerage firms, says discounts were not given in one-third of eligible transactions. It ordered brokers to find and pay customers they owe.
If you think you have a refund coming, contact your brokerage firm. For more information, visit the NASD's Web site at www.nasd.com.
Driving a car with side air bags that protect your head sharply lowers your risk of being killed if another driver sideswipes you, says the Insurance Institute for Highway Safety. Side air bags with head protection reduce deaths by about 45 percent for drivers whose car is struck on the driver's side. On the other hand, side bags that protect only the chest and abdomen reduce deaths by only 10 percent. More than 9,000 people are killed in side crashes each year, and head injuries are a leading cause of death.
Roughly 40 percent of all 2003 passenger vehicles have side air bags with head protection as standard or optional equipment. For a list, go to the institute's Web site at www.highwaysafety.org.
A new "529" prepaid tuition savings plan lets parents lock in current tuition rates when they prepay all or part of the cost of a private college education, even if their kids are still in diapers. For example, if you invest $10,000 and the tuition at a college is $30,000 this year, you'll receive a certificate that will cover one-third of the college's tuition for one year. More than 220 private colleges and universities, including Princeton University, The University of Chicago, and Amherst College, are participating in the Independent 529 Plan. For more information, go to www.independent529plan.org .
Booking a hotel room online won't necessarily get you the lowest rate, says a J.D. Power and Associates study. In fact, if you're checking into a mid-priced or budget hotel, you'll probably pay a buck or two more online than if you'd called the hotel directly or gone through a travel agent. That's because lower-priced hotels have a smaller margin for discounts. On the other hand, going online for a pricier hotel room, either at the hotel Web site or through a travel service such as Expedia, is more likely to get you a better deal.
Yvonne Wollenberg. UPDATE: Focus on finance. Medical Economics Oct. 24, 2003;80:10.