Trump’s stock portfolios: are they good investments?
ERIN E. ARVEDLUND, INQUIRER STAFF WRITER
POSTED: Monday, July 27, 2015
Donald Trump disclosed his financials last week, and Americans now know what the Republican presidential hopeful/celebrity mogul holds in his stock portfolios.
Are they good investments?
Professional investors opined on Trump’s holdings, most of which are blue-chip companies found in the Standard & Poor’s 500 index. His total investments are worth at least $78 million, according to his Federal Election Commission filings. That’s spread over brokerage accounts with Barclays, JPMorgan, and Oppenheimer, and two with Deutsche Bank.
“Confused, messy. Not well organized,” Daniel Wiener, an expert in low-cost Vanguard mutual funds, says after viewing Trump’s holdings. “With so many broker accounts, he’s overpaying in fees.”
The Donald’s major equity holdings show nearly 100 big-name blue chips: AT&T, Apple, GE, Conoco Phillips, Verizon, Wal-Mart, Bristol Myers Squibb, Altria, JPMorgan Chase, Caterpillar, and Morgan Stanley, to name a few. Many throw off dividends as income.
“It’s vanilla. It’s bland, very liquid. It’s not speculative at all,” says James Nolen, senior vice president of equity trading at Drexel Hamilton in Center City.
As is true of many One Percenters, Trump’s biggest single investment is in a hedge fund: BlackRock’s Obsidian fixed-income fund, disclosed at between $25 million and $50 million. Obsidian has returned roughly 11 percent annually since its inception in 1996.
Trump also has invested $1 million to $5 million in two Angelo, Gordon & Co. hedge funds (AG Diversified Credit Strategies and AG Eleven Partners), three funds run by John Paulson (Paulson Partners, Paulson Advantage Plus, and Credit Opportunities), and MidOcean Credit Opportunities Fund.
He invested up to $5 million in Baron mutual funds (Baron Small Cap, Baron Focused Growth, Baron Real Estate, Baron Growth, and Baron Partners.)
Trump also maintains $5 million to $25 million in his Capital One checking and savings accounts, an additional $1 million to $5 million in a JPMorgan Chase account, and $1 million in a money-market account at Deutsche Bank.
In commodities, Trump owns $100,000 to $250,000 in physical gold and a $100,000-to-$250,000 position in the GAMCO Global Gold Natural Resources & Income Trust.
“There’s no rhyme or reason as to how these different accounts are invested,” Wiener says.
For instance, Trump’s JPMorgan account sold Apple for a capital gain of between $1 million and $5 million. But he still holds Apple in his Oppenheimer and Deutsche accounts.
“He’s set up on the dividend side. The stocks pay income to own them long term,” says Nolen. High dividend payers include AT&T, with a 5.3 percent dividend yield, and Verizon, which yields 4.7 percent.
And although Comcast cut its broadcast ties to Trump for his comments about Mexican immigrants, he still owns Comcast shares worth about $500,000.
What strikes investment advisers most is that Trump’s real interest is building his licensing and brand name – and a presidential run adds serious juice to that value.
Nolen is convinced that Trump has no interest in being president but rather in selling himself.
Explains Nolen: “He’s talking his own book.”
earvedlund@phillynews.com
Read more at http://www.philly.com/philly/business/20150727_What_the_experts_say_about_Trump_s_stock_portfolios.html#Sv0Tyywye0o2HzHi.99
Due Diligence on Your Broker/Advisor? We Show You How…
How to do basic due diligence on your broker
ERIN E. ARVEDLUND, INQUIRER STAFF WRITER
POSTED: Monday, July 13, 2015
How can we investigate whether our Wall Street broker is a bad actor before we lose money?
Let’s take the case of Malcolm Segal. The Bucks County man was charged last week with swindling people out of $1.8 million through an investment scam that promised unusually high rates of return, according to the federal indictmentagainst him in U.S. District Court in Philadelphia.
What could investors have found on Segal before giving him money?
Fiduciary Oath
A quick review of the BrokerCheck.org database, maintained by the FINRA securities regulator, reveals customer complaints dating back years.
Do some basic due diligence on your broker via BrokerCheck (brokercheck.finra.org) and via the Securities and Exchange Commission’s Investment Adviser Search, another database (www.adviserinfo.sec.gov).
Type in his or her name or firm. Pay close attention to “Disclosures” outlining disciplinary history.
“When you see something like Segal’s background,” said Kathleen McBride, founder of FiduciaryPath in New York City, “to me it indicates it’s a pattern with his previous and current firm. If you see disclosure events like that, proceed with extreme caution.”
Red Flag No. 2: Returns that are too good to be true.
Segal claimed the CDs he sold paid up to a 12 percent annual interest rate for a two-year investment of $100,000. Instead, Segal allegedly spent the money to pay off earlier investors in what authorities say was a $15 million Ponzi scheme.
“With an average CD rate of under 1 percent, someone who is offering a CD at a guaranteed rate of 12 percent is offering a product that is too good to be true,” Louis D. Lappen, the first assistant U.S. attorney in Philadelphia, said in a statement.
“Why buy CDs from a broker and pay a commission, when you can buy them from a bank directly?” McBride said. “Something didn’t smell right about the high returns.”
Red Flag No. 3: Wall Street firms sometimes hire tainted brokers, who scuttle from one brokerage to another despite disciplinary records with FINRA.
BrokerCheck and the SEC’s investment adviser database have a wealth of information about the firms employing shady brokers. Despite his record, Segal kept finding new jobs.
“Segal and others remain in business because someone will hire them, as long as the regulators don’t suspend or revoke hislicense,” said Philadelphia securities lawyer Nick Guiliano, who sues brokers and brokerage firms on behalf of aggrieved investors.
Guiliano and his law firm are investigating whether Segal engaged in unauthorized sales of certificates of deposit to Aegis customers.
“Aegis has a duty to supervise him and is responsible for his conduct,” Guiliano said. “Segal actually disclosed that he was president of J&M Financial and partner of a company called National CD Sales. That should have raised a red flag to Aegis as an outside business activity. Aegis was supposed to come to Langhorne and do an audit.”
Guiliano has sued Aegis before on behalf of other investors.
One area broker Guiliano is suing had seven complaints against him with regulator FINRA and had been fired from two firms, while another broker had outstanding tax liens and had bounced several checks over the years.
Nicholas C. Harbist, Segal’s onetime lawyer from the Center City law office of Blank Rome, said he hasn’t entered an appearance as Segal’s defense lawyer in this case. Segal did not return calls seeking comment. A trial date for Segal is set for Sept. 9 in federal court in Philadelphia.
earvedlund@phillynews.com
215-854-2808 @erinarvedlund
Read more at http://www.philly.com/philly/business/20150713_How_to_do_basic_due_diligence_on_your_broker.html#vT8uf3bQjFq5CUbA.99
Romance scams target aging Baby Boomers; stalk your online date first?
Untrue Love
ERIN E. ARVEDLUND, INQUIRER STAFF WRITER
POSTED: Sunday, July 5, 2015
Close to retirement and ready to date again?
First, listen to Barbara Sluppick’s tale.
She logged into her online-dating account and up popped an instant message. Head over heels in love, a man had written: “I saw your profile, I knew you were the one angels sent me!”
He was British and lived in Arizona.
“We chatted online for about three weeks,” she recalls. He phoned, begging to visit, but couldn’t access his British bank account. Could she help him?
“As soon as I heard his voice, I knew he wasn’t British. He was Nigerian.” Sluppick recognized the accent from one of her Nigeria-born friends at work.
“You’re not who you said you are,” she snapped.
Sluppick, a grandmother, had been romance-scammed.
As baby boomers and retirees venture online to date, they’re falling in love with frauds in record numbers.
Romance scammers specifically target Americans age 50 and up and robbed them of an estimated $82 million in the last half of 2014 alone. Most dating fraudsters operate from Russia, Malaysia, and Africa.
It’s gotten so bad that senior lobbying group AARP wants online dating sites to install stronger antifraud measures, circulating a petition among its members (https://action.aarp.org).
AARP members even complain about scam artists on AARP’s partner dating site, called HowAboutWe.com. (Many dating sites take little legal responsibility for policing scammers.)
Sluppick, who lives in Rockaway Beach, Mo., created a website, RomanceScams.org, to counsel the defrauded. A decade later, she and her volunteers can barely keep up with victims from all around the United States.
Sometimes, the family of those scammed online ask her to intervene and exposer the fraudster.
“And the smarter the victim,” she notes, “the harder it is to convince them they’re being scammed.”
The average loss: $100,000.
Algorithmic relief. AARP wants online dating sites to screen photos for facial recognition; scrub subscribers for suspicious multiple accounts, bizarre language, and fake profiles; and issue alerts to those contacted by someone using a fraudulent profile.
Currently, Zoosk.com offers photo verification for its dating site.
To protect yourself, do a little online stalking of your own. Download your date’s picture, then paste it into Google’s “search by image” to see if that person’s photo shows up in other places under a different name. That’s a sign of a scam artist.
So is bad spelling. Paste a potential suitor’s love notes online to see if the words pop up elsewhere or on romance-scam sites.
Women and men. The FBI ranked romance scams among the nation’s top frauds in 2014. The FBI’s Internet Crime Complaint Center (IC3) says women suffer 82 percent of the financial losses; males, the remaining 18 percent.
Among top states for victim losses, Pennsylvania ranked fifth in the nation; New Jersey was No. 8. (No.1 was California.)
In Pennsylvania, men and women 60 years and older lost $3.4 million and $3.2 million, respectively, last year.
Not in uniform. Dating a soldier stationed overseas? Be advised: Real military personnel don’t use Western Union or Money Gram. All military have direct deposit to Stateside banks, too.
“Stop sending money to persons on the Internet who claim to be in the U.S. military,” said Chris Grey, an Army Criminal Investigation Command spokesman.
“It is heartbreaking to hear stories of people who have sent thousands of dollars to someone they have never met and sometimes have never even spoken to on the phone,” he says.
Grey maintains a database of fake military documents that romance scammers use to trick victims (www.cid.army.mil/romancescam.html). Military Romance Scams has a useful Facebook page where you can ask questions about servicemen and -women you are matched with online.
Don’t give out your last name, address, or where you work until long after you’ve met your date, says Amy Nofziger, director of AARP’s Fraud Watch Network.
Turn off your phone’s location settings so no one can see where you are. And be cautious of people who claim the romance was destiny or fate, or that if you don’t send money or help, you don’t love them.
Post-scam. Sluppick supports victims of romance scams, helping them heal from their experience and educate the public. Entirely run by volunteers, her support group (groups.yahoo.com/neo/groups/romancescams/info) has more than 60,000 members.
If you’ve been scammed, report your losses to local police, the Internet Crime Complaint Center (www.ic3.gov), or the Federal Trade Commission online (www.ftc.gov/idtheft) or by phone (1-877-438-4338) or TTY (1-866-653-4261).
earvedlund@phillynews.com
215-854-2808 @erinarvedlund
Read more at http://www.philly.com/philly/business/20150705_Untrue_Love.html#Y6TgiWmurBGId32r.99
Pros to retail … avoid Puerto Rico munis
Investors: stay away from Puerto Rican municipal bonds
ERIN E. ARVEDLUND, INQUIRER STAFF WRITER
POSTED: Wednesday, July 1, 2015, 1:08 AM
Unless you’re a professional investor, avoid Puerto Rico’s municipal bonds, financial planners advise. Otherwise, you could face a protracted default process rivaling Greece’s.
Already, investors have withdrawn hundreds of millions of dollars from mutual funds holding Puerto Rican munis, according to Lipper Inc., a unit of Thomson Reuters, citing the first five months of 2015.
And that was before Monday, when Gov. Alejandro Garcia Padilla admitted that the commonwealth can’t repay more than $70 billion in debt.
“Governor Padilla reversed himself from earlier commitments” to make good on bond payments, says local money manager David Kotok, of Cumberland Advisors in Vineland, who holds some Puerto Rico bonds.
“Did Padilla take notes from watching his colleagues in Greece six thousand miles away?” Kotok asks. “It’s a question without an answer.”
For retail investors, it’s a danger zone.
“I have five analysts working on this. It’s easier for us to understand what’s going on, but retail investors should avoid this,” Kotok says.
Jonathan Smith, of DT Investment Partners in Chadds Ford, agrees. “If you need to live off of your assets, avoid mutual funds with Puerto Rico bonds in them,” he says.
If you already own them, “get out now and quickly,” advises Smith, whose firm oversees $1 billion in assets.
Latino business and political leaders here contend that the brain drain of thousands of Puerto Ricans, many of them young people, contributed to its problems. Opportunities are greater in cities on the mainland.
About four million Puerto Ricans live in the continental United States. And 50 percent of the growth in Latinos in the Philadelphia region came as Puerto Ricans moved here in the last 10 years, says former City Councilman Angel Ortiz.
But Padilla’s threat to default doesn’t help the island’s underlying economy.
“Puerto Rico is now a fully owned subsidiary of Wall Street,” Ortiz says.
“I’m terribly concerned,” says Philadelphia physician Carmen Febo. “I have a sister that has been having issues finding employment. With this crisis, who knows how this will affect interest rates and savings. It’s horrible.”
Born in Puerto Rico, Febo moved here in the 1970s for her residency at Hahnemann Hospital and is now executive director of Taller Puertorriqueno, an arts organization in North Philadelphia.
“Unlike [with] Detroit and Chicago, the White House wants to be Pontius Pilate and wash their hands of this mess,” she says.
Philadelphia’s boom in Latino immigrants has, however, helped the local economy.
In its first “State of Latino Business in the Philadelphia Region” report, the Greater Philadelphia Hispanic Chamber of Commerce and Temple University’s Fox School of Business found that the number of Hispanic-owned businesses had grown 28 percent, to 18,787, in less than a decade.
These businesses are located across 11 counties in the region, according to Varsovia Fernandez, head of the Chamber.
earvedlund@phillynews.com
215-854-2808 @erinarvedlun
Read more at http://www.philly.com/philly/business/20150701_Investors__stay_away_from_Puerto_Rican_municipal_bonds.html#4K66M8teFxVGVJDY.99
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