Closed-End Funds a Good Investment Option for Baby Boomers

Closed-End Funds

There will be a literal mountain of cash raining down on the Baby Boomer generation.  Over the next several years, it is estimated that $10 trillion will be inherited by today’s Baby Boomers.

Due to fact that women outlive men by seven years on average, women will receive the lion share of this wealth will get the bulk of it according to a recent Cornell University study.

So the big question is what to do with all that money? Financial expert Scott T. Schultz, author of Scott Schultz’s Guide to Closed-End Funds has a surprising answer.

Scott T. Schultz was quoted, “Women already control 60 percent of the nation’s personal wealth – they outnumber men and they are traditionally the shoppers.”

Scott T. Schultz has had an exceptionally successful career and is a respected expert on the subject of financial investing. He began his career in 1983 at E.F. Hutton and was ranked the nation’s No. 1 Separate Account Money Manager by USA Today for three consecutive years using GIPS verified/audited performance numbers supplied by Morningstar, Inc. Schultz was a GOP nominee for U.S. Congress in 1988, and met with Presidents Ronald Reagan and George H.W. Bush at the White House.

As the first of the boomers begin reaching the age of 65 this year, the U.S. will see an even greater number of retirement-aged women holding this country’s financial wealth.

“Many will inherit money and property from their parents and/or their husbands, and many will live another 30 to 40 years,” Schultz says, citing the Cornell study. “They’ll need to invest their money to ensure they have enough to avoid that impoverished retirement they fear, but they – and the nation – have lost confidence in the stock market; April 2011 saw the lowest number of investors since 1999.”

According to Schultz, what brokers are not telling their clients is about closed-end funds. Schultz was ranked the No. 1 Separate Account Money Manager for three consecutive years by USA Today. He says these limited-issue stocks are available only in finite numbers and because watchful brokers can find them “on sale,” they’re a better bet as an investment for those who are willing to sit on them awhile.

Why is the American public so in the dark about closed-end funds? Noting his book is the first written on the topic in more than 20 years, Schultz says there are a few reasons:

• Brokers can’t generate a lot of commissions from them. Brokers move open-ended funds quickly because they earn a commission with each transaction. It’s easy money for them, Schultz says. Closed-end funds require a longer term investment strategy, so brokers who want to get rich quick won’t use them.

• They require more effort from the broker, who has to work to find the “sales.” One advantage of closed-end funds is that they can sometimes be purchased at a discount, so the investor starts off ahead of open-end investors who are paying full price for stocks, Schultz says. Even if the fund never gets back up to its full value, any increase at all is a gain. But the broker has to be willing to work to find the good investments with good discounts. And then he or she has to be willing to sit on them.

• Closed-end funds are boring! For a lot of brokers, it’s just plain fun to trade stocks in products and initiatives with an exciting ring to them, whether it’s Facebook or a treasure-hunting ship. These brokers are constantly trading stocks – and generating transaction feeds, lawyer fees and underwriting fees every time – because that’s what they like to do. Closed-end funds require thoughtful, sometimes tedious research before buying, and then the patience of a saint as both the broker and the investor wait for the bid price to increase.

To learn more about Scott T. Schultz and his thoughts on Closed-End Funds, please visit:


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