Schultz Collins Lawson Chambers, Inc. blogs

Chambers Quoted on 401(k) Fee Disclosure

Tue, 26 Feb 2008 15:47:08 -0800

Firm principal Jon Chambers was quoted extensively in an article that appeared in the Bureau of National Affairs (“BNA”) Daily Report for Executives on Monday February 11, 2008. The article, “Labor Effort to Enhance Plan Fees Disclosure Draws Mixed Response” describes a series of Department of Labor (“DOL”) initiatives to improve the quality of fee disclosure in the 401(k) marketplace. Mr. Chambers describes how the DOL initiatives will help improve existing practices, but argues that Congressional action is still required to address problems relating bundled fees and intra-company revenue transfers.

Hedge Funds and Their Effect on the Markets

Mon, 28 Jan 2008 14:13:16 -0800

During the last several weeks, world equity markets have coupled and, in general, have moved downwards. Although the magnitude of decline is well within the expected probability distribution of stock prices, nevertheless, some investors may become disconcerted because of a natural human tendency to extrapolate current events into an indefinite future.

One of the basic principles of investing is that the future return on a portfolio of risky assets is a random variable – i.e., not knowable. Over many long planning horizons, under some simplifying assumptions, actual portfolio return converges towards a number that is greater than the risk-free rate available through U.S. Treasuries or bank CDs. Likewise, over a single life’s long-term planning horizon, it is also reasonable to expect that a portfolio of risky assets will outperform a risk-free investment.

SF Chronicle Quotes Chambers on Retirement Plan Default Rules

Mon, 29 Oct 2007 08:46:38 -0800

Employers not liable for 401(k) losses in target account by Kathleen Pender, San Francisco Chronicle, Sunday, October 28, 2007.

The U.S. Labor Department last week issued final rules designed to get more employees participating and investing more aggressively in their 401(k) plans.

The new rules say that employers can’t be held liable for losses in a 401(k) account if they enroll employees who don’t sign up themselves and direct their contributions into one of three qualified default options: target-date funds, balanced funds and managed accounts.

Jon Chambers' Congressional Testimony (video)

Tue, 9 Oct 2007 15:44:04 -0700

Jon Chambers, principal at Schultz Collins Lawson Chambers, Inc., testified at a U.S. House of Representatives Committee on Education and Labor hearing concerning 401(k) fees on October 4, 2007. You can also download the text of his testimony.

SCLC's Patrick Collins releases working paper on investment prudence for fiduciaries.

Fri, 28 Sep 2007 14:10:28 -0700

The main article from the Q2 2007 Investment Quarterly (on optimal size for actively managed funds) was adapted from this much longer and more comprehensive paper by Patrick Collins. It addresses many other issues relating to investment prudence for fund managers.

Without More

Investment Quarterly, Q2 2007

Wed, 19 Sep 2007 10:33:32 -0700

Does Size Matter?

The only reason to invest in actively managed funds is to earn alpha: returns greater than those of the market. As active funds accumulate a history of such returns, they naturally attract more and more money. But for various reasons, it turns out that as an active fund grows, it becomes harder and harder to earn alpha. In this quarter’s main article, we explore why that is so, and whether there is such a thing as optimal size for actively managed funds.

The article is adapted from a much longer paper addressing many issues of investment prudence for fiduciaries, written by our own Patrick Collins, and available here.

Investment Quarterly, Q1 2007

Wed, 19 Sep 2007 10:33:56 -0700

Our main article this quarter reviews the venerable subject of portfolio diversification. Why is it important to diversify? You’ll know exactly why, by the time you finish reading.

Investment Quarterly Download

Investment Quarterly, Q4 2006

Wed, 19 Sep 2007 10:33:14 -0700

We are often asked, what objective criteria have been established to evaluate the many different types of representatives and advisers that provide financial services. The supervisory bodies of the securities industry have created a comprehensive set of regulations aimed at protecting investors from wrongful conduct on the behalf of agents, brokers, and investment advisers. Once you read the lead article in the current edition of INVESTMENT QUARTERLY you will be able to answer these questions:

What is the evolving regulatory framework governing the activities of Investment Advisers?
What sorts of person or organization can claim the title Investment Adviser?

Investing in Commodities

Wed, 19 Sep 2007 10:32:40 -0700

Historically, investors viewed investment in commodities as a highly speculative venture advocated by salespeople using questionable—if not fraudulent—methods of promotion. Recently, however, not only individuals but also institutional investors have turned their attention towards commodities. Here’s our take on commodity-related investments.

For more on the Investing in Commodities

SF Chronicle: Year-end income tax strategies

Wed, 19 Sep 2007 14:01:08 -0700

Jon Chambers is quoted in an article on how to plan your Year-end income tax strategies by Kathleen Pender, San Francisco Chronicle, November 28, 2006.

As the end of 2006 approaches, here are some tax- and money-saving moves to consider before Dec. 31.

Pump up your 401(k).

Think twice before buying a stock fund in a taxable account.

Think twice before buying a stock fund in a taxable account.

Maximize tax losses.

Give a gift.

Investment Quarterly, Q3 2006

Wed, 19 Sep 2007 10:34:16 -0700

Is it possible for an investor to purchase shares of a mutual fund with an outstanding track record and suffer relatively poor results? The answer, unfortunately, is yes, and it happens with disturbing frequency. Morningstar, Inc., has developed a new metric, originally called the Success Ratio (now the “Morningstar Investor Return™”), which measures how much investors have actually participated in a fund’s historical return. Learn more about this statistic, including which fund families tend to provide investors with greater “success,” in the lead article of INVESTMENT QUARTERLY.

SF Chronicle Quotes Chambers on 401(k) Reforms

Fri, 11 Aug 2006 15:43:49 -0700

Reforms in works for 401, by Kathleen Pender, San Francisco Chronicle, Tuesday, August 1, 2006.

The House of Representatives passed a pension bill Friday designed primarily to shore up underfunded defined-benefit plans and head off a government bailout. But it also will make some important changes to 401(k) plans. The most controversial provision would let the same companies that run 401(k) plans — such as mutual fund, brokerage and insurance companies — advise individuals on how to invest their accounts.

Investment Quarterly, Q2 2006

Wed, 19 Sep 2007 10:35:10 -0700

Our lead article, “The Asset Location Debate: Taxable vs. Tax Deferred Accounts,” continues last quarter’s review of academic literature on the impact of taxes on wealth accumulation. While the previous article considered the implications of differing tax rates and policies on various investments, this quarter’s article focuses on how locating different types of assets in taxable and tax-deferred accounts affects long-term wealth.

Investment Quarterly Download

Patrick Collins releases a working paper "Multifactor Asset Pricing Models and the Rationale for Investing in Value Stock".

Tue, 18 Sep 2007 14:38:48 -0700

Patrick Collins, Ph.D, CLU, CFA has released a working paper on the topic of Multifactor Asset Pricing Models and the Rationale for Investing in Value Stocks.

This article summarizes academic research into multifactor asset pricing models, with specific emphasis on growth and value stocks. The article notes that empirical studies observe that value stocks typically generate superior risk-adjusted returns relative to growth stocks, and addresses implications for the Efficient Market Hypothesis if value stocks, in fact, represent an improperly priced risk factor.

SF Chronicle Quotes Chambers on Large Market Drop

Sat, 21 Jan 2006 07:56:10 -0800

Dow dives on ho-hum earnings, oil worries by Carolyn Said, San Francisco Chronicle, Saturday, January 21, 2006.

Jon Chambers, principal at investment-consulting firm Schultz Collins Lawson Chambers in San Francisco, said investors shouldn’t fret over Friday’s one-day drop.

“The market will balance itself out. We’ll have bad days and good days,” he said. In fact, Chambers said, bad days are simply the price investors pay for potentially bigger payoffs in the long run.

“A day like today reminds us why we expect 10 percent (returns over time) from the stock market,” he said. “If you didn’t have greater risk, you wouldn’t have greater reward. You do better in stocks than in a money market or a bond because you have the risk of bad days, bad months or bad years. If you were never to have a bad day, month or year, and all you could expect would be a risk-free rate of return, then you’d get the same (low) return as a money market.”