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Subject:  Re: A meeting with the WISE Date:  7/14/1999  11:58 AM
Author:  WilliamLipp Number:  12153 of 92040

gemini1 Date: 7/14/99 10:54 AM Number: 12147
He said no one should ever put money in a childs name, since it is more difficult to access grant and loan money for college.

This argument is very popular. It's an unintended consequences of making financial aid dependent on need: You get more aid if you look poorer, so look poorer. As a practical matter, if you are savvy enough to be here, you probably won't qualify for much need-based aid anyway. I also oppose this approach on a moral basis, but that's something everyone must decide for themselves.

Also-- he belives in load funds over no loads, since he claims that fund managers have access to info about the funds before we do and everyone should have their money professionally managed.

It makes no sense at all to approach this problem with rhetorical analysis. This is clearly a problem for numerical analysis. And the numerical analysis has been done many times. It always comes out the same - beating the S&P500 index fund in any one year is a matter of luck, with only 5-20% of the funds getting lucky in any one year. Getting lucky three years in a row is like flipping heads three times in a row - it happens with some regularity, but it doesn't prove you are talented at flipping heads.

How's this guy going to get paid? One of the financial advisors we talked to during our search got paid through kickbacks from the funds. He had to push high fee funds to feed his own family.

It should be simple to compare the performance of the funds he is pushing to an VFINX (ticker for Vanguard 500) at the morningstar site.
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