No. of Recommendations: 9
Author: dianeth Date: 3/6/02 7:10 AM Number: 33940
My name is Diane and I have a kind of urgent question.
I work in an Internatinal School and last year, we were offered retirement pension funds with Hansard International.
Now that I read the book the unemotional investor I would probably change strategy...but I still have to deposit money in this account for this year...the contract is firm on that point...to avoid penalties we have to deposit for 2 years.
So to make a short story. The Hansard office in Thailand will be closing soon....and there all kinds of rumours going on.
Here is a part of the e-mail that the company sent me today, I have to add that because their office will be closing, the representant will be at school on Monday March 11th to collect the school and teacher
contributions.
"Further to an email that has been circulated around the school regarding Hansard Pension Schemes do not believe a word of it. Your money is safe and with a reputable investment company. I will explain more next monday but i just wanted to reassure you first. "
Do you know anything about that pension funds....


Hi Diane,

I don't know anything about Hansard International, so I don't know whether or not their pension money is secure. You will have to rely on the information they provide you on this. Read all the fine print.

Here is what I do know:

Watch out! You are entering a potentially vulnerable situation where you could become a target for financial sharks! They look for situations like yours to exploit. Don't let anybody 'manage' your money without very careful consideration, and don't jump into any new investments without complete understanding of the risks.

As soon as you can get at your money without penalty, I recommend you roll it into a self directed IRA, and place it in a safe short term investment like a money market, until you learn enough about investing to make educated choices. I also recommend low cost, no-load mutual funds, like those found at Vanguard, http://www.vanguard.com/. Vanguard has a very good reputation as an IRA custodian, and they have very knowledgable people who can help you through all the roll-over paperwork.

Disclosure: I have one of my IRAs at Vanguard.

Robert Sheard wrote 'The Unemotional Investor' quite a few years ago, and while much of what he wrote is sound advice, some of it is questionable (IMHO). The 'Unemotional' part of it is clearly correct; ie, never make investments based on emotion. Use careful and logical thought processes, tailored to your individual personality.

Some of the investment techniques described by Sheard are known as DDAs (Dow Dividend Approaches). These methods include variations such as the Foolish Four, and the Dogs of the Dow. Whether these are valid or not has been a long-standing debate here on The Fool. The thought is that you might do just as well simply buying the Dow Index via Diamonds (ticker symbol DIA). In any case, DDAs are high volatility investments that may or may not return the numbers they have in the past, and are probably not suitable for a large percentage of anyone's retirement portfolio.

Disclosure: I use DDAs for about 10% of my retirement portfolio.

Sheard also described what he called the 'Unemotional Growth' strategy. This is Sheard's personal twist to a larger, more commonly known strategy, called Momentum Investing. This is, again a highly volatile technique, that generated tremendous results during the great bull market of the 90's, but has since taken a terrible beating in the current bear market. Some of the high-flying stocks selected by this method may never recover. You didn't mention your age, but in general, momentum investing may be suitable for younger investors with lots of time to recover from down periods like we've had in the last two years. Also, we may never see growth like the 90's again, so these methods may never again be as successful as they once were.

Some really good books to read are:

'Common Sense on Mutual Funds' by John C. Bogle (founder Vanguard Mutual Funds)

'Stocks for the Long Run' by Jeremy Siegel.

'The Intelligent Asset Allocator' by William Bernstein (who also has a great website at: http://www.efficientfrontier.com/ )

So, my advice is: read, study, learn, and then move slowly and deliberately.

RK
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