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Don’t Let Investment Fund Simply Disappear on You

Dear George: Several months ago I made arrangements to transfer my stocks and mutual funds from a full-service firm to an on-line brokerage. Everything has gone smoothly except for one fund that seems to have disappeared. Everyone says they are working on it but so far, no results. What should I do?

, Eric, San Diego


Dear Eric: I guess it would be a bit premature to blame it on Y2K, right? I have to admire your patience. If it were my account I would be camped out on the doorstep of the brokerage firm demanding that the missing security is found immediately.

Odds are the fund will turn up. The transfer of holdings from one account to another is a very mechanical process that usually goes smoothly. That hasn’t always been the case. Back in the old days when these transfers were done manually it was always a tenuous event. Clerks at the company that was loosing the account would shuffle the papers to the bottom of the file and it became the obligation of the new firm to stay on top of the process until it was completed.

Industry and government regulators have tried to streamline these transfers but there is always the possibility something could go wrong.

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I am a big fan of bring these kind of glitches to the attention of entities like the Securities and Exchange Commission (www.sec.gov) or the National Association of Securities Dealers (www.nasd.com). Send a letter to these regulators to let them know about the problem and send a copy to the firms that are involved. Brokerages hate to have the SEC stick its nose into their operations and they try to get things resolved before Big Brother shows up.

I also suggest that you go so far as to send a copy of your letter to your representative in Congress. Constituent complaints carry a high priority for elected officials. Most government agencies, like the SEC, have Congressional liaisons and they respond quickly when a Congressman comes looking to fix problems for a person (voter) in their district.

I jokingly mentioned Y2K, but let me make a serious point. If you were thinking about transferring an account I’d be inclined to wait until after the first of the year. There’s a chance the transfer could get completed before the end of the year; however, there’s also a chance it could get delayed. I’m not so sure it’s a good idea to have your securities floating in cyberspace when the New Year arrives.

Dear George: Why do companies split their stocks?

, Steven, Poway


Dear Steven: Even though a stock split does nothing to increase the value of your investment, it is still considered a sign of a very healthy company.

Stock splits usually occur about the time that the price of a stock has increased to a historically high price. Let’s use Qualcomm as an example. Earlier this month the company announced a 4-for-1 split. Let’s assume the price of the stock is $200 at the time of the split. If you owned 100 shares before the split, you would wind up with 400 shares priced at $50 after the deal. The value of your investment remains exactly the same but the number of shares and the price are adjusted.

Stocks that are trading at record high prices are often considered to be expensive. Some investors tend to avoid them because of the high sticker price. A split makes the price look more attractive.

A recent report by The Outlook, a publication from Standard & Poor’s, came up with a list of stocks that appear to be candidates for a stock split. They include Applied Materials, BMC Software, Converse Technology, Electronic Arts Inc., Golden West Financial, Johnson & Johnson, MedImmune, Microsoft, MiniMed, Omnicom, Siebel Systems, VISX, and Xilinx. By the way, Qualcomm was also on the list.

Chamberlin is the host of “Money in the Morning,” heard weekdays from 9 a.m. to noon on Ksdo.com A/M 1130. Send your letters to him to P.O. Box 1969, Carlsbad, CA 92018, or E-mail him at (george@,moneyinthemorning.com).

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