Robert Tattersall of the Saxon funds went to a conference in early April and offered advice to the individual investor. The conference was for the institutional investors – pension funds and money management firms. The first thing is pension funds are receiving 1 to  3%  on their fixed term investments because of low interest rates, they need to generate 4 to 5% to maintain their funded status. They are looking at more riskier investments such as infrastructure projects, junk bonds, and the like. It is suspected the infrastructure projects will not be that generous in returns because of the lack of supply.

One large pension fund official asked all the investment managers of his portfolio to lower their fees by 10%, most did. Shopping for lower fees is something we all can do and should do – either funds companies or ETFs. If fees are being lower, then it is better to buy a fund or the investment manger? now it might be better for the fund.

When a large pension company makes an investment, because of its size it is hard to move the asset size with one investment. As an individual with smaller assets, it is possible to move the assets with one or two investments. You have an advantage over pension plans particularly with smaller companies – pension plans may or may not be buying them but you can follow them, read their financial reports as they are released and outperform pension plans.

Linking to dividend paying stocks, with pension plans they have to maintain returns to keep their funded status; you should have a good idea of what type of returns you need or want. In terms of fees, fees have been lowered for many funds which means you keep more. There is no reason not to discuss fees. Individuals have some advantages over institutions, but it is good when institutions are helping you.

There are more questions than answers, till the next time – to raising questions.