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									    L. A. Finance
                                  Los Angeles Chapter of AAII
                                                        income. In that year 40 percent of workers were
                                                        covered by pensions, a number that dropped to
                                                                                  July 2012
                                                        21 percent by 2008. For most companies
                                                        defined contribution plans are the retirement

                                                        their pensions, Social Security and their income
       Strategies for Pursuing Your                     from their portfolios.
           Retirement Paycheck                                   The retirement scene has been changing
                                                        as corporations which used to offer defined
       By William Parmenter, Ph.D., editor              benefit plans, are increasingly offering defined
                                                        contribution plans in the form of 401(k)s and

                hristine Benz talked on the topic       403(b)s.
                of Strategies for Pursuing Your                  The percentage of workers covered by
                Retirement Paycheck at the June         company pensions dropped from 40 percent in
16 meeting of the Los Angeles chapter of the            1980 to 21 percent by 2008.
AAII at the Skirball Center.                                     Portfolio income from fixed-income
        Benz last talked to the Los Angeles             instruments has drastically declined since 1970.
Chapter in Sept. 2011. She is the director of           Average 3-month CD rates that were 8.2 percent
personal finance and a senior columnist for             in 1970, declined by 2011 to 0.2 percent. June The most recent of her two             yield for Barclays Aggregate Bond Index on an
books is the 30 Minute Money Solution: A Step-          annualized basis was 2.1 percent. Other fixed-
by-Step Guide to Managing Your Finances                 income returns are similarly unappealing.
(Wiley & Sons, 2010),                                   Eight Key Ingredients for Retirees’ Portfolios
is reviewed                                                      The first key ingredient for today’s
on page six of this                                     retirees portfolio is a focus on total return, not
issue.                                                  just income. A portfolio that draws income
        (The 36 slides                                  from a number of sources is needed, such as
in her presentation                                     from: dividend and interest income, tax-loss
have been posted on                                     sales, from RMD (required minimum
the chapter website,                                    distribution) and from rebalancing.
under the heading                                                A second ingredient will be guaranteed
Presenter’s       Slides,                               income to provide for basic living expenses,
found                   at                              derived from Social Security, your pension and
www.aaiilosangeles.or                                   an SPIA (single premium immediate annuity).
g. Readers are referred
there for a detailed            Christine Benz
outline of her talk, of which her speech was                          Table of Contents
 a verbal expansion and annotation.
        Changes in Retirement Planning                    Retirement Planning……..Christine Benz…..….p.1
        Benz introduced her two-hour talk and             30-Minute Money Solutions…Christine Benz…p.6
answer session by discussing the changing                 Education Nuggets……..Don Gimpel…...……..p.7
landscape of retirement planning. In 1980 many            Letters to the Editor……………………………..p.8
                                                          Orange Country Meeting Announcements…..…p.8
retirees were able to live off a combination of
their defined-benefit pensions and portfolio
        A third ingredient will be a sustainable                 asset allocation according to your
withdrawal rate so you do not deplete your                       income needs and time horizon.
assets before you die.           A four percent               It lets you ride out the volatility of stock
withdrawal is useful as a starting point, and may                assets, knowing that your near-term
be tweaked based on time horizon and asset                       needs are covered by safe investments.
allocation.                                                   It includes components to deliver current
        A fourth ingredient will be to have a                    income,      income       with     inflation
stable pool of assets from which to draw living                  protection, and longevity protection.
expenses for from one to two years. These                        The first step in creating the buckets is to
would be CDs, money market accounts, and a               determine your monthly expenses, which should
high quality, short-term bond fund.                      be 75 to 80 percent covered by your income
        Ingredient number five is a measure of           from all sources, including pension, Social
inflation protection to prevent rising prices from       Security and annuities.         The three bucket
eroding your purchasing power. You can get it            portfolio is aimed at filling the 20 to 25 percent
with Social Security TIPS (Treasury Inflation-           gap between income and expenses
Protected Bonds), stocks, commodities, and
floating-rate, bank-loan funds.
        Sixth is a growth component for                   Los Angeles County Meeting Schedule
longevity in case you live longer than expected
and to provide a legacy for your grandchildren.           Westside Computer Group – Don Gimpel, (310) 276-9875
                                                 Veterans of Foreign Wars
You can get it with a diversified collection of           Memorial Bldg. Culver Blvd. and Overland Avenue, Culver
stocks and with alternate bond types such as HY           City. The group meets at 10:30 a.m., on the first Saturday of
                                                          every even month.. Topic: TBA. The UltraFS 11 group will
(high yield, aka junk) and foreign bonds.                 meet at 9 a.m. on the same day.
        The seventh component is the ability to           Pasadena Group – Meets at 7 p.m. on the third Tuesday of the
put your plan on cruise control, so that you do           month, except for August and December at Pasadena Main
not have to devote so much time to investments,           Library, in the David Wright Auditorium, at 285 E. Walnut St.,
                                                          Pasadena. (Contact, Ivan Wong at (626) 446-2486,
or, in case a not-so-savvy spouse has to take   
over. This can be obtained with individual                Mutual Fund/ETF Group —Next meeting TBA in the Craft
funds or ETFs that deliver a lot of                       Room at the Santa Monica Memorial Park, 1401 Olympic Blvd.,
                                                          Santa Monica, CA 90401. Contact Gunter Hagen (310) 457-7404.
diversification.                                 Meetings are free to the public.
        The last ingredient is your attention to
                                                          Stock Selection Group —Norm Langhout, (310) 391-6430,
tax efficiency, which is easy to do, and avoids  Meeting at 7 p.m. , fourth
the sizable bite that taxes can take. You do it by        Wednesday of the month, using IBD, CANSLIM stock
                                                          selection method , at Fairview Library, 2101 Ocean Park
sequencing your withdrawal, and hold tax-                 Blvd., Santa Monica.
efficient investments (index funds, ETFs and
                                                          Los Angeles Chapter, Skirball Center, registration at 8:30
municipal bonds) in your taxable accounts.                a.m., seminars from 9 a.m. to noon on Sat. July 21, James
  Bucket Approach to Retirement Portfolio                 Goldberg on How to Make Money in the Current Economic
                                                          Environment, and Paul Davis, on Medicare Basics: A, B, C,
        The approach of putting assets in three           D...Choices
different buckets, with different levels of risk
                                                          Desert (Palm Springs area) Group Currently not meeting. .
and different timelines, brings retirement                For more information contact Patricia Gamino at: fastnet@msn
portfolio planning to fruition. The bucket                com. or at (760) 485-6161.
approach has a number of advantages:                      Option Special Interest Group, meets online on first, third and
     It allows you to build a portfolio that is          when applicable, fifth Tuesday of the month at 7:30 p.m.,
                                                          except August and December. Get instructions on how to
        well-diversified, and you do not have to          participate from Robert Morgen at
        focus on income at the expense of return.         Currently, it is a small group, providing extensive interaction.

     It enables you to have an appropriate
        The second step in creating your buckets         You could put some of it in a short-term bond
is to determine your withdrawal rate. The                fund like PRWBX, or MINT. (PRWBX is the
traditional rule is four percent, with an annual         ticker symbol for T Rowe Price Short-Term
inflation adjustment. (A four percent drawdown           Bond Fund. MINT is the ticker for PIMCO
rate offset by a four-percent growth rate would          Enhanced Short Maturity Strategy fund.
allow you to preserve your assets for                    Henceforward only the ticker symbol will be
perpetuity.)                                             given.)
        If you don’t use a four percent fixed rate               Bucket Two: has $256,000, or 40
of withdrawal, use a variable rate of withdrawal,        percent of the portfolio total. It is an
adjusting for circumstances.                             intermediate bucket to cover living expenses
        The main problems in today’s retirement          from years three through fifteen of retirement.
environment are: low rates of real return in fixed       It has a little risk, investing in intermediate term
income, volatile market subject to bubbles, lack         bonds and a small percentage of equities. Their
of savings by potential retirees, and retirees are       ticker symbols are: PTTRX, MWTRX, VIPSX,
living substantially longer than before. Don’t be        TIP, VWINX and DODBX.
flummoxed by the imponderables, because you                      Bucket Three has $480,000 or 60
can always fall back on the infallible Chinese           percent of the total and consists of income for
method—work until you drop dead.                         years ten and beyond in your retirement, as well
        Let’s do a case study using the three            as assets for your heirs. This is the long-term,
buckets and an imaginary portfolio of $800,000.          higher risk/higher reward portion of the
        “What?” yelped the man sitting next to           portfolio. Investment ticker symbols include:
me. “I’m 65 and I only have $65,000 saved up.            VTXMX, or VXUS, VDIGX, or VIG, VGTSX,
What am I going to do?” he demanded of me.               DODGX, PRFDX and OAKIX.
        “Are you still working?” I guardedly                     Part of the mix, in the buckets, should be
asked.                                                   income producing equities, such as CVX, FTE,
        “Yeah, he said warily, “and, my job              NVS and RIO, along with some income
seems safe.”                                             producing funds and ETFs such as, VIG,
        “Use the infallible Chinese method,” I           VEIPX and DGS.
replied sententiously, motioning him to be quiet,                Bucket maintenance, meaning moving
as I wanted to hear the talk.                            living expenses to bucket one, and moving
        “What is that?” he queried insistently.          income distribution can be done annually or
        “I’ll tell you later,” I replied, shushing       quarterly.
him.                                                             Tax management in retirement is
        Anyway, back to the buckets. In year             concerned with the sequence of withdrawals to
one at four percent withdrawal on $800,000 you           minimize the tax hit. Take your RMD (required
take out $32,000. In year two, allowing for              minimum distribution) out of your 401(k)s and
three percent inflation, you take out $32,900,           IRA when you reach age 70 ½. If your expenses
and, so on. What if you do not need to take out          are not covered by your pension, and retirement
that much? Then, leave the unused portion in             payouts from IRAs and 401(k)s and your
the portfolio and let it grow.                           taxable accounts, save your Roth IRA for last.
        Contents of the Three Buckets                      Additional Investment Recommendations
        Bucket One: has $64,000, or eight                        In connection with working through
percent of the portfolio. It needs to cover two          another case history of retirement of a 65-year-
years of living expenses. This money is kept in          old couple with a $1.5 million portfolio, Benz
cash or cash equivalents, such as money market           gave additional investment recommendations
funds and CDs. The goal is stability not return.         for mutual funds, as follows:
       Bucket Two: intermediate-term bucket:            communication services, .78; energy, .89;
        PRWBX, HABDX, HARRX AND                          Industrials, .89 and technology, .85.
        VWELX.                                                    The Cyclicals as a whole had a P/FV of
      Bucket Three: long-term bucket:                   .94. In that group, basic materials were .81;
        VDIGX, HAINX, VTSMX, LSBDX                       consumer cyclicals were .92 and financial
        AND HACMX.                                       services were .84. In the defensive group, only
        Knowing that ETFs are gaining ground             the health sector was cheap with a P/FV of .90.
on mutual funds as investments, Benz, gave the                    Benz finished with her best ideas for
same recommendations, substituting ETFs, as              equity investors. These were five-star stocks
follows:                                                 with low P/FV ratios, wide moats and low
Bucket Two, intermediate-term bucket: BSV,               uncertainty ratings. The list: AMAT CVX,
BND, LQD, TIP, and VIG.                                  CSCO, NVS, VMC and WU.
Bucket Three, long-term bucket: VIG, VTI,                          Questions and Answers
VXUS, JNK, and DBC.                                               She pointed out that though you may
        Moving on, Benz put up a slide covering          start out with a fixed 4 percent withdrawal rate,
the last five years of the broad market, showing         you may have to adjust it according to
the trend in being undervalued and overvalued.           circumstances, with a goal of staying within a
Since 2007, about 80 percent of the time the             band. Medical problems and natural disasters
market was undervalued. The worst was                    are contingencies that would require adjustment.
September/October, 2008, when the market was             In the early days of retirement more money
45 percent undervalued. Since then, it was 6             might be spent on travel, whereas in the last few
percent overvalued in March, 2011, dropping to           years of life medical bills typically will soar.
22 percent undervalued in August, 2011, and on                    As      regards       annuities,     Benz
to its current status in June, 2012 as being 13          recommended an SPIA (single premium
percent undervalued.                                     immediate annuity), because it gives a higher
        Her next chart covered the last five             income stream. With a fixed annuity, it is hard
years, showing the valuation of wide moat                to research what you are getting. Another
stocks. These are defensive stocks that tend to          problem with a fixed annuity is that the payout
perform well on the downside, and which,                 is keyed to the interest rate environment, so with
according to the chart, are very rarely                  interest rates being low they are not currently
overvalued, and almost always undervalued.               attractive.
Their worst was in September/October, 2008,                       Avoid financial planners to whom you
when they were 45 percent undervalued. Since             have to pay an annual percentage. Benz
then, wide moat stocks were 20 percent                   recommended the fee-only model, especially
undervalued in October, 2011, improving to               those whom you could pay on an hourly basis
fully valued in February, 2012, then dropping to         once per year.
10 percent undervalued in June, 2012.                             Two helpful websites that can help you
        Ticker symbols of some wide-moat                 find a financial planner are:, the
stocks include: CVX, CSCO, NVS, VMC, and                 site for the National Assn. of Personal Financial
WU. These stocks have wide moats, are                    Advisors, and, the site of the
undervalued, have a low uncertainty rating and           Financial Planning Association.
are Morningstar five-star stocks.                                 For further questions, Benz can be
        Tightening her focus to look at the P/FV         emailed at
(price/fair value) ratios she said the broad group                       What To Do?
of Economically Sensitive stocks had a P/FV of                    Benz’s talk was very well received by
.96.     In that group cheap sectors were                her AAII audience, composed almost entirely of
up-scale millionaires, who own their own                 lives, and now depend on this one big meal of
homes, and manage a portfolio, running in some           the day to get by. There is a lively trade around
cases into millions of dollars. It is an audience        the tables in food scavenging and swapping, as
in the top five per cent, in terms of wealth,            seniors bring in plastic containers to take home
social position and education.                           food.
        But what about the rest of American                       Generally speaking I would guess their
retirees?                                                monthly income from Social Security and other
        As the audience was leaving, and as I            sources to average around $800 per month.
started to stand up, the 65-year old man next to         How do they stretch the money? They get
me, who had only saved $65,000, grabbed my               subsidized public transportation on buses and
arm. “What is that infallible Chinese retirement         trains. A senior, bus pass costs $35 a month.
method?” he asked insistently.                           They get subsidized housing through HUD, with
        “Work until you drop,” I replied. “I             single apartments going for as little as $350 per
mean, what’s to do? Most Americans are like              month.
you. The average family has $3,000 of credit                      For clothes and household items they get
card debt. Many people owe more money on                 a senior discount at Salvation Army, Good Will
their house than it is worth. They do not have           and other thrift stores, where prices are a
assets—they have debt. People subsisting on              fraction of their retail store counterparts.
minimum wage can’t save money.                                    The senior citizens center on Fourth
        “If you are lucky you have relatives you         Street is a multipurpose center and community-
can fall back on. In China, children traditionally       creating pole for the elderly. It offers free
take care of their elderly parents. The society          medical scans, health care services, no and low-
regards it as payback for raising them as                cost excursions (e.g. to the Skirball Center
children.”                                               museum), a television lounge, a recreation
        “Well, thanks, anyway,” the guy said,            center with pool tables and ping-pong, a variety
with a worried look on his face.                         of     classes     (including     computers    and
        No money. No kids. Greater longevity.            drawing/painting), lapidary, clothes making, a
A tough job market. A low interest-rate                  weight room, exercise classes, bingo, and
environment. It’s looks like a jungle out there,         various levels of emotional support and referral
with predators on the prowl. But, fortunately            services.
this country’s social safety net has not yet been                 Working class retirees in America, as
eliminated.                                              exemplified by the main senior center in Long
              Seniors Make Do                            Beach, are getting by on less. They did not plan
        At the main senior citizens center at            their retirement. What was the point? They did
1150 E. Fourth St. in Long Beach, where I am a           not have any savings to drop into three buckets.
volunteer food services worker, we feed around           Their resources amounted to only a drop in the
250 subsidized, large, lunch meals to seniors            bucket. They are meeting the exigencies of daily
Monday through Friday. The meals cost HSA                living by bravely carrying on the best they can.
around $7.50 each to prepare and deliver, and                     What about another class of elderly—the
are sold nominally at $2.25 each. But the policy         ones with no savings, not eligible for Social
is no one gets turned away for lack of money, so         Security, no family to fall back on and too
the actual amount collected runs about 75 cents          infirm to work? They face a sad plight, so sad
per meal. Money is running short, and meals at           that people do not want to talk about it.
some Long Beach centers have been eliminated.                     A big question going into this
        The seniors who eat the meals are                contentious election season is will social
working class people, who worked all their               services for retirees be further cut in response to
the government at various levels unsustainable           personal finance. Although this book was not
debt accumulation?                                       team written, Benz acknowledges in-house
        The prospect is for a difficult tug of war       contributions from an editorial team that
at the national level between guns and butter,           included the directors of mutual fund and equity
between the military apologists and the AARP.            research, investment analysts, copyeditors and
One thing about the coming battle is certain, as         worksheet designers. The multiple contributions
America’s number one, and most powerful                  give the book a highly professional and
lobby, AARP will wage a furious fight in behalf          authoritative look.
of its constituency, the elderly—the most                        The book is an engaging and easy read,
politically informed and active segment of the           as the 36 chapters generally run about five or six
population.                                              pages, start with an anecdote to hook you in, are
                                                         tightly focused on a single topic, and scan easily
           30-Minute Money Solutions                     due to the use of various typographical devices.
              A Book Review                                      The reader can read the book
                                                         progressively from chapter one through thirty-
       By William Parmenter Ph.D., editor                six, or skip to the topic of their choice, say
                                                         saving for a child’s education using a 529 plan,

              hristine Benz, 30-Minute Money             or estate planning.
              Solutions, A Step-by-Step Guide                    The book builds from introductory
              to Managing Your Finances,                 topics, such as calculating your net worth, and
(New Jersey: Wiley, 2010), 295 pp., $24.95               budgeting, to more sophisticated subjects like
hardback. (Available at Amazon for $19.95                retirement investing and rebalancing your
hardback, used; for $9.35 paperback, new; and            portfolio.
$9.32 Kindle edition)
                                                                   The Competitive Edge

                                                                 Bookstore shelves are spilling over with
                                                         introductory personal financial management
                                                         books. For them to sell, they need a competitive
                                                         edge to stand out. What specifically does this
                                                         book have to offer? I can mention three things:
                                                                 One, when talking about creating a
                                                         portfolio, the book moves past generalities, and
                                                         gives lists of mutual funds with their sticker
                                                         symbols. For example on page 102, when
                                                         talking about creating a long-term, hands-off
                                                         portfolio, mutual funds are divided into three
                                                         categories, and at least nine mutual funds are
        This is Benz’s second book in                    named as candidates for each category.
Morningstar’s series of books on personal                        It looks like this: U.S. Stock Funds:
finance. Her first was Morningstar Guide to              DODGX, FAIRX, FCNTX, OAKMX, and
Mutual Funds: 5-Star Strategies for Success              SEQUX; Foreign Stock Funds: JETAX,
(2005), a national bestseller. Other books in the        ARTIX, DODWX, HIINX, and OAKGX; Bond
series deal with selecting mutual funds, stocks,         Funds: FLTMX, FHIGX, HABDX, RPSIX, and
dividend stocks, and financial workbooks.                VWITX. (Use Yahoo Finance or any other
        Benz is Morningstar’s director of                website to look up the ticker symbols.)
        A main reason beginners hire financial                       Education Nuggets
planners at $500 a pop is because they are
clueless on picking the funds for their portfolio.               By William Parmenter Ph.D., editor
Since Morningstar is a recognized expert in
impartial fund evaluation, pre-selecting for the
tyro reader is in itself way more worth the price
of the book.
        Two, Benz is actually a skilled journalist
                                                          the Los Angeles Chapter of the AAII at the
                                                          Skirball Center.
                                                                           r. Don Gimpel talked about the
                                                                           two handouts he distributed at
                                                                           the June 16, monthly meeting of

who both knows her specific subject and the
general context of her field, through having
gone to many conferences and interviewing
many experts in various areas of the financial
field. She pulls in that expertise from various
experts she has interviewed to enrich the text.
        For example on p. 225, she quotes, “I
will say that not one of my client’s retirements
looked the way they thought it was going to
look. They lived longer than they thought, they
lived shorter than they thought, they were
healthier than they thought, they were less
healthy than they thought they would be.”
        So she quotes financial planner Ross
Levin from a 2009 interview, pointing out that
his statement neatly sums up the challenges of                           Dr. Don Gimpel
planning for retirement. Interesting point, and
one she uses to entice the reader to read the                     One handout, from Morningstar, was a
section devoted to retirement investing.                  chart of the fair evaluation of the market as a
        Three, the book gets away from                    whole. Currently the market is undervalued by
platitudes and is actually helpful to the reader on       about six percent. Readers are encouraged to go
the reader’s terms.                                       to         Morningstar’s         website       at
                                                 and look at the charts
               Helpful Web Site                           on ten sectors to see if they are over- or
         If the reader goes to the website                        The       second       handout,     from        gave grades to
they will find reference guides, downloadable             forty investment gurus. Their average accuracy
multi-page worksheets, financial calculators, up-         was 46.87 percent in making predictions. A
to-date investment ideas, and other planning              coin flip would yield .50 accuracy. You’re
tools.                                                    better off flipping a coin and saving hundreds of
        The book’s target audience is the person          dollars on newsletters.
interested in taking charge of their financial life               The top guru, Jack Schannep, of the
and looking for a book to empower them,                   publication Sweepstakes had an accuracy rate of
provide expertise and motivate them. This is              66 percent. Not bad in an investment world that
that book. And, the book does not stand                   is so risky that the professionals in the field
alone—it is backed up by Morningstar’s                    prefer to make their money on salaries, fees,
impressive research operation.                            bonuses and other forms of OPM (other
                                                          people’s money).
        Letters to and from the Editor                   was developed. The first two nodes of what
                                                         would become the ARPANET were
         Edited by William Parmenter Ph.D.               interconnected between Leonard Kleinrock’s
                                                         Network Measurement Center at UCLA and
        L.A. Finance is looking for letters to the       Menlo Park on Oct. 29, 1969. Later it morphed
editor. Don’t you have any burning financial             into the internet. The headquarters for the
issues that need public airing? Send your                international governance body of the internet,
missives to the editor at                                ICANN is in Marina Del Rey., and you will find                          L.A. is center of Hollywood-land, that is,
yourself in print.                                       the movie industry, and a major mover in the
        Readers will note that Pro Forma has a           popular music industry. These two industries
new name, L.A. Finance, and a sharper look.              create the images and the icons that drive
        About time…as editor I sided with the            popular culture around the globe.
collective disgust of the former name. Pro                       L.A. is where popular authors have
forma means to do something as a formality,              defined the future: Aldous Huxley with Brave
usually in a perfunctory manner. What kind of            New World (1932), and, Island (1962); and Ray
name is that for a financial publication? L.A.           Bradbury with the Martian Chronicles (1950)
Finance, in a more attractive type face,                 and Fahrenheit 451 (1953). The future will be
designates the location of the publication and           the images in our imagination as much as it will
defines its contents.                                    be in our physical surroundings.
        Why is the location, Los Angeles--lo                     L.A. is at the center of Higher
mas santisima ciudad de los angeles—                     Consciousness, with the Aquarian Age’s
important? Is it really the most saintly city of         fascination with mind expansion, through diet,
the angels, a gateway to the future and to the           asanas, pranayama, and meditation, taught by
riches of heaven and earth?                              various Hindu and Buddhist popularizers, and
        L.A. is the microcosm of the                     practiced in yoga studios and temples.
macrocosm, the new Ellis Island, with over 100                   L.A. is developing a place of primacy in
ethnicities. You can visit communities of Tibet,         contemporary arts, with oil billionaire J.Paul
Bolivia and Kenya and never leave L.A.                   Getty’s endowment of two world-class
         L.A. is where the universe expanded             museums, and real estate billionaire Eli Broad’s
exponentially. Edwin Powell Hubble used the              patronage and expansion of LACMA. Broad’s
100-inch telescope on Mt. Wilson in the early            stated goal is to make Los Angeles number one
1900s to challenge the reigning belief that the          in contemporary art.
Milky Way constituted the whole universe.                        L.A., so say the realtors, has an ideal
Based on his discoveries of other galaxies,              location—one of the few places in the world
astronomers vastly expanded their knowledge of           with a Mediterranean climate, where you can
the known universe, and the emergent field of            snow ski, golf and go surfboarding in the same
astrophysics took a leap forward.                        day.
        L.A. was where America launched its                      To Live and Die in L.A. to quote a
Space Age. Jet Propulsion Laboratory was                 popular movie title, means to live at a particular
where its head William H. Pickering                      time in a place that is on the cutting edge of
spearheaded the leadership team, composed of             science, culture and the expansion of
Wernher von Braun, James Van Allen and                   consciousness. People in the future will look
himself, that launched America’s first satellite,        back on the Los Angeles of today and marvel, as
Explorer I, on Feb. 1, 1958.                             we do today at Greece during its ‘golden age’ of
        L.A. was ground zero for the launch of           Pericles around 450 B.C. or at Florence during
the Wired World, as the place where the internet
the Renaissance in the late 1400s under
Lorenzo Medici, who commissioned works by                 Orange County AAII Announcements
Michelangelo, Leonardo da Vinci and Botticelli.
         L.A., ok, what about the word Finance in
the masthead? AAII is an organization of                        The AAII Orange County Chapter
education and guidance through collegial                        will present:
interchange in personal investing. Finance, as               August 20--Time-tested Mutual Fund Managers
in investing in the financial markets, is                   and Investment Strategies--
descriptive of the members’ activities.                     Benjamin Shepherd, Editor of Louis Rukeyser’s
         L.A. as a major financial center? No               Mutual Funds and Louis Rukeyser’s
                                                            Wall Street
way—stick with New York, London and
Tokyo—let’s avoid inflationary rhetoric. L.A.               September 17--(Special Time 1:00 p.m.)
did emerge, during the heyday in the 1970s and              Economic Indicators, the Market and
1980s of Michael Milken, as a center of high-               ETFs--Matthew McCall, President, Penn Financial
                                                            Group LLC
yield bond financing; he led a surge in the
productivity of the use of capital. With so                  October --No Meeting
many billionaires California, not just L.A., is an
important source of financing and capital.                   November TBD--Federal and State Income Tax
                                                            Law Update--Herb Farrington, Tax
         The old art on the masthead looked to              and Financial Services
me like an Apple 2e desktop computer, trendy
back in the mid-1980s, with a memory of about            Location:   Balearic Community Center
250 MB and a floppy disk drive. The new art                          1975 Balearic Dr.
shows a chart, increasingly used to track ETFs;                      Costa Mesa, CA 92626
a calculation pad, and a book, denoting investor                     714-754-5158
education, connecting with AAII’s mission.               Payment:
         In addition, the publication has an                         At the door, everyone, $5/person
increased use of drop heads, break heads, color,                For more information about the
photos, and the presentation is more geared to           Orange County chapter of AAII and their
that of a commercial magazine rather than that           meetings, go to:
of an internal house organ. As editor I plan to          http//www.robertsgeneral.com_aaii.
be more active in soliciting submitted articles
and letters to the editor, to broaden the scope
and the interactivity of the publication.
         The sharper look of L.A. Finance is only
a work in progress. Many changes were made
in the five years since I have been the editor,           Note to L.A. Finance Contributors
and, no doubt, many changes are pending for the

future. As my skills in computerized                                   lease have your copy typed in
typography improve, I am passing them on to                            Word in 12-point, using Times
the reader in the form of an improved                                  New Roman typeface. Articles
publication.                                             from Special Interest and Neighborhood Groups
         If you want to let me know what you             are requested. Letters to the editor are welcome
think, I welcome your comments. Send me an               and will be run in a separate section. Articles
email at                           from the Orange County and other area local
  Check out the AAII Los Angeles chapter                 chapters are solicited. Readers who want to
  website at:                      email an article about investing or the financial
system will have a chance to appear in print.
        Book reviews are welcome. Call if you
want to check on your ideas in advance. Email
articles and letters to the editor at, or call the editor at

   L. A. Finance is offered free of charge
  exclusively via email and is also available
  for downloading from the Los Angeles
  Chapter          web         site       at:

   The American Association of Individual
  Investors Mission: AAII is an independent
  nonprofit corporation formed in 1978 for the
  purpose of assisting individuals in
  becoming effective managers of their own
  assets through programs of education,
  information and research. Neither L. A.
  Finance nor the Los Angeles Chapter of
  AAII accepts any responsibility for
  investor’s investment decisions. The
  investor takes the total and complete legal
  and ethical responsibility upon himself.
  Caveat emptor.


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