You Are Officially Alone - 4 / 22 / 2003

Citibank. If you are invested in a fund or index, you own some. How? Your fund certainly owns a few index spiders. Citi is a part of most portfolios and equity indexes. And those in charge of managing your investments in equity funds have just officially vacated all fiduciary responsibility to you, the investors.

They have done this by allowing the Citibank board to be unanimously re-elected. These board members, super smart people, are paid to ensure that the executives of the company manage the corporation for the benefit of the shareholders. Do you think they upheld their end of the contract? This Board has sat back and done absolutely nothing for 2 years and presided over one of the greatest loses in value and operational in competence in the history of American Banking. And guess what? The professionals you pay to manage your investment and to cast your votes by proxy decided to reconfirm this excellent board.

It's official people, you are alone. Professional management of your money does not exist. And fiduciary responsibility is not at all a requirement in the eyes of Fidelity, Janus, Vanguard. I am terribly sorry if I offend some readers who work for these named funds and really do a great job for investors. But at some point they need to ask themselves if they take any responsibility for the record redemptions they have seen at their funds in the last 12 months. Those redemptions are investors casting their votes on the fund managers. Its that simple. Perhaps if fund managers had taken more responsibility in looking out for their investors money, had remained disciplined, had not been caught up in the speculative momentum of the last few years, and had made the necessary public statements and actions to ensure the boards of companies they invest your money in were beholden to the shareholders first, we would recognize their value in the process. Instead the vast majority of equity fund managers are little more than clearing houses for your investment money. They are not expert, or they were once but now take credit when the markets go up, and point fingers when the markets go down.

This is the very reason you must be more expert. You must learn some investment basics. You must decide your investment profile. And you must act on it. It's called taking responsibility. Because if these results of the Citibank Board re-election tell you anything, its professionals you pay to watch your financial back are not going to do it at all. Read future and past postings, send in your comments or questions or suggestions. Together we can become more expert.

Learn. Be Conservative. You worked very hard for your 401k.

Build Value Every Day (on your own).

Brad van Siclen