| BUSINESSWEEK ONLINE : MAY 24, 1999 ISSUE | ||||||||
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| COVER STORY
The Barker Portfolio: A Battle Plan for Accidental Investors A strip mall in smoggy Montclair, Calif., is the last place anyone would expect to join a revolution. But that's where I fired my first shot. It was 1980, consumers had just won the right to buy their own telephones, and there I stood, poised between a $19.97 rotary dial and a push-button job for $30 more. I can see now that picking the rotary model was pretty lame. O.K., it was really lame. Yet the very act of choosing took me into a new economy, where monopolists no longer sold all the phones, bankers had to pay market interest rates, and employers quit offering full pensions. Soon, I'd picked a checking account with interest and, next, a $2,000 individual retirement fund--managed by me. Today, you and I find ourselves managing once unimaginable sums, portfolios in six and seven figures. We're a nation of accidental investors, empowered yet often perplexed by the choices. The money's great, but if you're anything like me, you might feel something's amiss. Personal investing keeps taking more time, an ever-bigger share of our daily worries. Do I own the right funds? Does my adviser play me for a sucker? What about my stock options? Should I buy this ''stocks for the long run'' stuff? Beneath it all, you also may wonder how you can manage your wealth without having it take over your life. This new column is devoted to helping you do just that--running your portfolio intelligently, without turning it into a second career. That remains harder than it should because we're forced to fight on three overlapping fronts: price, performance, and--crucially--the information we need to make the smartest moves. Here's how I see the battle lines: PRICE. Lots of people know to the dollar what they spend on commuting or having their pool cleaned. I have yet to meet anyone who could tell me just how much they spend on investments. Why? Because Wall Street, through such weird words as ''contingent deferred sales charge,'' cloaks the true cost of its wares. It adds up: If you've got $500,000 invested, you're likely spending at least $5,000 a year in various costs. You easily could be paying double--or half--that much. For us, such a wide range spells both opportunity and danger. PERFORMANCE. As would any smart seller with no bargain price to offer, Wall Street instead often points out something more compelling. Usually, it's our feelings of guilt (Harvard in 2007 will cost what?) or greed (ipo.com--just buy it!). That's why investment pitches dwell on potential payoffs far more than on the inescapable risks. Yet reaching the payoff--even such a modest-sounding one as matching a market's return without taking extra risk--is wickedly elusive, a fact legions of underperforming money managers privately concede. INFORMATION. All those digital footprints along our money's many paths, from 401(k) contributions to home-equity payments, come at us every month from every direction. They are the key to managing money well. Yet they remain beyond our grasp. Take those cool Web sites for tracking portfolios or 401(k) balances. Just try to download the data to your computer, where you might make it truly useful by merging it with details from, say, your spouse's 401(k). Chances are you can't. Your info is trapped in a software cage, turning such basics as monitoring your asset allocation into Sunday afternoons of pencil work until you reach for the Advil and settle for a guesstimate. One day, some enterprising company will spy the competitive opportunity and set a new standard by offering clear, personal, and portable statements of price and performance. In the meantime, our best defense is to remember that Wall Street abounds with ultrasmart salespeople who are devoted to capturing our money. Some treat us well. To the rest, it's our role in this revolution to show we're every bit as smart as the Street. BY ROBERT BARKER _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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 Your Guide to Online Investing COVER IMAGE: Our Guide to Online Investing CHART: The Biggest Online Brokers TABLE: Broker Scoreboards TABLE: Online Brokers That Meet Your Needs Gotta Do the Legwork ``A Diversity of Thought'' Testing the Waters Commentary: Why Old-Line Firms Need New Online Tricks TABLE: Full-Service Dream The Right Tools for the Right Trades Street.Cop TABLE: Smart Investing on the Web TABLE: Web Resources for Online Investors Rocket Science Made Simple TABLE: Quant for a Day How to Seal a Great Bond Deal TABLE: Where to Buy...And Get Info What to Read: The Good, the Bad, and the Terrible TABLE: Wired-Up Investing Books Investor Beware of Web Talk TABLE: Separating Fact from Fiction TABLE: Cross Checkers Smells Fishy? Tell the SEC This EDGAR Is a Real Know-It-All TABLE: Searching the SEC Commentary: Analyst Calls: Let Investors Listen TABLE: Calling All Netizens The Barker Portfolio: A Battle Plan for Accidental Investors Inside Wall Street: Wells Fargo Online CHART: The Rise Trails Other Banks Inside Wall Street: Bidding for 3COM? CHART: Prior Takeovers Fizzled Out Inside Wall Street: A TV-To-Net Linkup CHART: ACTV's Rise Is Due to E-Commerce INTERACT E-Mail to Business Week Online | |||
