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Where to Leave a Portfolio Dear Mr. Berko: My wife passed away 10 years ago, so I continued to work into my early 70s before finally deciding to retire. I have a generous retirement package, which includes royalties on several patents I own. I have no debts and a portfolio …Read more. Where Is the Market Going? Dear Mr. Berko: I'm told there is a very private banking club of exactly 60 imperial Swiss financiers, none of whose members took any losses in the recent world economic downturn; they knew well ahead of time that the Dow Jones industrial average …Read more. IRA and Future Taxes Dear Mr. Berko: My 70-year-old husband recently passed away, and I am the beneficiary of a $623,000 individual retirement account (statement enclosed), but I don't know anything about stocks. The broker wants me to sell all the stocks to put the …Read more. Variable Annuities and the S&P 500 Dear Mr. Berko: My sister is 42, and I'm 46. We have a $110,000 certificate of deposit we inherited from our parents. It pays 4 percent and matures next month. Our uncle is a stockbroker and has recommended that we invest $55,000 in an AXA variable …Read more.
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Wishy-Washy Broker

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Dear Mr. Berko: We have a rollover individual retirement account with a market value of $318,000. It's very important to us, and we've had the same broker since my husband left his previous employer and went into business for himself four years ago. Now we have enough income to fund a simplified employee pension IRA, but the problem is our broker. He is an extremely nice guy but never gives us any advice. If we find a stock we like, he says, "It's up to you" or "If you think it's OK," and his most negative comment is, "The stock isn't on our approved list." Last week, my husband asked him to recommend a bank stock and a utility stock for our SEP IRA, and he gave us a list of three utilities and three bank stocks recommended by his firm. We like this man because he doesn't try to push things on us as other brokers do. He promptly returns phone calls. He's polite and respectful. He's helped us with our tax returns for the past three years. He's active in our church, and his wife is the Sunday school teacher for our two children. How can we get him to be more aggressive in his recommendations? He's such a nice person, and we don't want to hurt his feelings. — SD, Fort Walton Beach, Fla.

Dear SD: I think you like this "nice guy" for all the wrong reasons. He is polite, returns calls, has a wife who is a Sunday school teacher, etc. Most brokerage offices have a Mr. Nice Guy who is really a nice guy but is a lousy stockbroker. Good stockbrokers give their clients good advice, which is what they are paid to do. Good stockbrokers understand a client's objectives; they help their clients develop realistic goals and set benchmarks to measure a portfolio's progress. They are familiar with all of the issues in your portfolio. They'll call when an issue (or issues) drift from your portfolio's objectives and make suggestions to direct the portfolio back on course. Good stockbrokers diligently review your portfolio on a quarterly basis and will post you an easy-to-understand copy of that review.

He will measure your portfolio's progress against a prominent benchmark so you can determine how well it's meeting your long- and short-term objectives. A good stockbroker is proactive. He's also knowledgeable, well-read, experienced, caring, understanding and confident in his decisions. And a good stockbroker doesn't have to be a Mr. Nice Guy with a wife who teaches Sunday school, as long as he is good at what he does. All stockbrokers make mistakes; good stockbrokers admit their mistakes and correct them. Good stockbrokers have an experienced assistant who minds all the bureaucratic details, minutiae and paperwork. You don't have a good stockbroker, SD; you have a nice guy, and there's a saying about where nice guys finish a race.

I doubt that anything you might say to this fellow would change the way he conducts his business; rather, your criticism could offend him. I know lots of nice guys like your broker. They're very likable. Their desks are neat as a button. Their ties are perfectly knotted. Being nice (not good) is the way they attract new business. There are more than a few wishy-washy nice guys out there — some of whom, I suspect, have had orchiectomies. They fear their spouses or their mothers, and sometimes you'll need a Richard Cheney waterboarding kit to get a recommendation out of a Mr. Nice Guy. From my catbird seat, I think you have three choices: 1) You can stay the course, use Mr. Nice Guy to help you with your tax returns (I think this is a no-no) and do your own research. 2) You can say goodbye to Mr. Nice Guy, move your account to a discount broker, probably save 90 percent on your commission costs and have access to a wider range of research. Or 3) you can employ a professional money manager who can do all the things Mr. Nice Guy isn't doing, which probably would let you enjoy better investment results.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at mjberko@yahoo.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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