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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Freedom Fighter who wrote (65543)	7/31/1999 10:29:00 AM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

Wayne, I don't even think most Wall Streeters are crooked. Many are just dumb and trying to make a living. And some are smart and honest. The problem is, this is the type of market where the dumb and the unscrupulous, some are one, some are both, dominate the air waves and the print media. I remember one experience I had with the bond fund that opened my eyes on how some brokers operate. I was giving a speech before some top salesmen at a major firm, and I can't remember which one any more, so I'm not being polite. <g> I mentioned that my fund accumulated its monthly payout all month and paid it out at the end of the month. If a customer bought shares on the last day of the month, he basically got some of his money back as a dividend and got to pay taxes on it. My advice was to push for buys early in the month to avoid such a negative situation. Several brokers immediately took me to task. "We sell on the last day of the month because we can tell customers they get the whole month's dividend for one day's holding. They jump at that bargain." So, the customer gets a dime dividend and takes a dime capital loss and gets to pay income taxes on what is basically, for him, a return of his own capital. Bizarre. Those brokers didn't give a damn about the customers' returns, just the fact they found a way to fool them into an easy sale. True, one month's dividend is small potatoes over the course of a mutual fund holding period, but I was shocked at how many used what was a negative aspect of the fund's archaic legal structure (we were the only huge fund not to declare dividends daily because our lawyers didn't think it was legal <g>) as a selling point.