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COPYRIGHT 2003 FDCH e-media
Original Source: MONEY 2003
PAT KIERNAN, CNNfn ANCHOR, MONEY 2003: Welcome back to the Thanksgiving edition of CNNfn MONEY 2003 we`re taking your calls and e-mail on personal finance issues this hour. Everything from retirement planning to mortgages to college savings plans. There is a lot to talk about.
GERRI WILLIS, CNNfn ANCHOR, MONEY 2003: Robert Reby is here to take you questions. He is the president of Robert J. Reby and Company. That phone number is 1-800-304-3638 and the e-mail address is money2003@cnnfn.com.
KIERNAN: I got the e-mail going here. I need some messages. Keep me busy here. Not an e-mail address you usually see, money2003@cnnfn.com. So I`ll take some of your questions that way and some of your questions by telephone. Bob welcome to the program.
ROBERT REBY, PRESIDENT, ROBERT J. REBY & COMPANY: Hey nice to see you, Pat. Hi Gerri.
WILLIS: Good to see you.
KIERNAN: Give us an idea what you do, the kind of clients you serve and that will give people a sense of what sort of questions they might throw at you today.
REBY: Well retirement planning, you find mostly the 50 and over community is the most aggressive about seeing a horizon. And say I want to address these issues and I want to buckle down and focus on a retirement date. So a lot of empty nesters are the people that we tend to gravitate towards or gravitate towards us.
WILLIS: When those are the people who have had some of the biggest problems, I guess you could say the impact of the bear markets with biggest for them because they were closest to retirement.
REBY: I`d say it`s the biggest if they got caught up into some of the bear market. As you know Gerri a lot of investments did well during that bear market. So if you were able to have foresight and participate in some of those you probably could have protected yourself a little bit on the downside.
KIERNAN: You know a lot of this is long-term planning that doesn`t change much from one year to the next and the issues are the same and you want to encourage a long-term view. There are more current issues that come up though. We`ve got the dividend tax change that a lot of people have asked questions about. Should their portfolio change because of this mutual fund investigation? There are a lot of investors concerned. Are you hearing that echoed back from investors?
REBY: Oh, yeah, the mutual fund investigation is a big deal. When you have $7 trillion of American families` money in mutual funds and you start having basically your first legitimate black eye in that industry, especially the growth it experienced in the 1990s. I think people have reason to be concerned.
WILLIS: And Robert, how much distrust is out there? You know, we hear that people are pulling money out of some of these funds. Putnam, for example has had a lot of people pull their money out. How much are you hearing about that?
REBY: Well, Putnam, as you may realize, had about $30 billion pulled out of their accounts in the last, whatever, maybe four to six weeks. The good news is there`s a lot of money, October had about $25 billion move into stock mutual funds so the money is coming into the funds. Basically you have clients` concerns and they want to make sure ethical people are managing their money. Many investors and viewers don`t really know the money managers, per se. They don`t know them as friends or people they can trust so there`s that leap of trust and I think we have to re-establish that. And you have to really maybe do a little more homework on who is actually managing your money.
KIERNAN: Alright let`s see what our viewers have on their minds today. To Florida first for Adam. Hi Adam. Adam, are you there?
CALLER: Yes.
KIERNAN: What`s your question for Bob?
CALLER: My question is, A, I`m retired. I`m 67, and I have roughly about $80,000 in a 401k. And it`s in mostly stock. And I`m looking for a situation where that I can put this money and still make a little money on it until such time as I`m 70 1/2 and I have to start withdrawing it. Any suggestions?
REBY: Well Adam you said you`re in stock. Are there multiple stocks that you`re in?
CALLER: yes.
REBY: And you`re going to want income at age 70 or so?
CALLER: Will I need the income?
REBY: Yes.
CALLER: Possibly. But I mean I want to leave that option open if I want to start you know, I got to start withdrawing it at 70 1/2.
REBY: I think as a 67-year-old with three and a half years or so to go before you are required to take money out that is a decent time horizon. As you know Adam you`re not going to take all the money out on one day. When you are 70 and one half too. There will be a time frame. In all actuality you have quite a decent time horizon to plan for. I like to think you`re going to set yourself up with a nice diversified arrangement maybe shooting from the hip, if you will, maybe, 40 percent, 50 percent bonds, different types of bonds albeit. And maybe get involved in some different equities. In today`s world I`d make sure you have some international equities. As long as your 401k has those choices, I think that would be a prudent thing to do in today`s world.
WILLIS: Interesting it`s so hard to figure out exactly how to allocate your assets as you`re right on the cusp of retirement. I think your advice makes a lot of sense. But let`s...
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