ETFs: Are These Investments Needed in Your Retirement Plan?

Boomers are often faced with a decision that will be framed in such a way as to make it seem the only logical choice. As the mutual fund verses ETF debate begins to gain steam, some truths need to be considered.

Mark Twain suggested: "The reason we hold truth in such respect is because we have so little opportunity to get familiar with it." This will be the selling point for exchange traded funds: you will hear that they are less expensive, that they are better than the mutual funds - many of them indexed, and that you should own them in your 401(k).

They will suggest you overlook the cost of trading them, the fact that they tempt you to trade them more frequently than ou would a mutual fund and in doing so, allow you to follow the herd on any given day, a behavioral no-no for every investor. So what exactly is the attraction that they want us to see? Are mutual funds better or worse than ETFs?

The answer depends on who you are. If the sort of investor who believes that they can make small moves to harness big gains, then you should probably avoid the lure of ETFs. Exchange traded funds are mutual funds that can be traded just like stocks. They tend to have lower fees than their comparable cohort the mutual fund but the commissions that brokers charge for these trades tend to erase the advertised returns you might get.

If you are the sort of investor who buys to hold, then the surprising choice would be ETFs. Yet you will need to harness the inner trader in you that wants to succumb to the temptation to trade. This sounds easy. But in truth, is no easy feat.

So let's run some numbers comparing a total stock market ETF sold by Vanguard and a total stock market index sold by the same company. The ETF (trade as VTI) carries and expense of 0.07%. The mutual fund version of the same thing (bought as VTSMX) levies a 0.18% fee on investors. The former has no minimum investment,; the later wants $3,000 to begin. So we'll start there and propose a hopeful return over 10 years of 4%.

In the first calculated example, the investor made no additional contributions to the investment. Vanguard does suggest that they charge no brokerage fees but they do charge a $20 annual fee for the account. This might be much higher when accessing these funds through your 401(k) and there may be additional brokerage fees. So we'll assume a $10.00 brokerage fee - as I said, yours might be lower and in most cases, the brokerage charge is on both ends of the transaction.

Based on the above numbers, the ETF, once purchased and held begins to creep past, in terms of raw returns by the third year. By the 10th year, you will have saved about $19.41 in fees giving you a net gain for your ETF of $32.82. 

But begin adding to the security on a regular basis (say $200 a month) and the differences are much more notable. To add to the ETF in equal proportions over the same 10 year period would cost you $1021 in commission costs and with this money not working for you, the sacrifice in what each would be worth at the end of the 10-year investment period used in our example in addition to the trading cost would leave you with over $1200 less in the ETF account.

Inside a 401(k), where regular contributions rule the way you invest, ETFs can give the average investor less of an opportunity than proponents suggest they will. In a taxable account, bought without commissions such as Vanguard offers and purchased in large lump sums, ETFs slightly trump their mutual fund siblings.

Will you take the time to learn the truth about yourself before making the decision on which investment is better? You are the debate. 

Paul Petillo is the managing editor and founder of Target2025.com/BlueCollarDollar.com and a fellow Boomer.

Your Home: Is it Part of the Plan?

American dream or not, the games you may have once played with financing your home are not available for the vast majority of homeowners. And there is no doubt that this a good thing, a lesson learned that was far too painful but often, those tales are. But there is another game afoot in the world of mortgages, even as the largest lenders pull the plug on the process: the reverse mortgage.

Most of us don't envy those who are toying with this option. We know two things about these folks: one they own quite a bit of their house, referred to as equity and two, these homes are owned by cash-strapped people older than 62.

The reverse mortgage is a rather simple product with relatively simple goals. Because those who are considering this option are often older and in possession of much of the house they live in. This pool of cash is a very tempting option to a fixed income or one where retirement savings no longer is able to keep up with the cost of living. There are a variety of reasons they may need to tap this cash in their homes from medical bills to simply poor money management.

So the concept of tapping some of that equity is quite appealing. A reverse mortgage essentially gives you the money that your house is worth. Ron Lieber recently visited this topic in the New York Times explaining "reverse mortgages begin with a lender that is willing to pay you instead of you paying the bank. How much you get depends on your age, prevailing interest rates and the amount of equity you have in your home. The payout may also depend on whether you choose a lump sum, a line of credit, a regular payment for as long as you live or a regular payment for some fixed number of years."

The problem is getting a lender to do that. Many of the biggest banks have pulled away from offering the product, not because they don't think it is a good idea. But because those they lend the money to tend to fall behind on key elements of the loan agreement: paying taxes and keeping the house in sale-able condition. Aside from a check with the feds, there is no credit check on the applicants.

So banks, seeing the issue of foreclosing on granny because she opted for the lump sum payout and failed to keep current on those obligations have decided the bad PR will come with too steep a price. So enter the second and third tier lenders who will, without a doubt fill the void.

This could create several issues. The first would be fewer loans or on the flip side, loans that revert back to why this type of mortgage got its bad rep in the first place. Fees will be higher in a space with fewer competitors. Elderly will sign more complicated documents that will force them to maintain a fund for emergencies - which on the surface isn't a bad thing but could turn turn out to require higher funding balances than needed, leaving the reverse mortgager with less cash for the effort.

Another issue might be in how your heirs feel about the whole process. Often, parents,who may have mentored their children on the subject of money and financial prudence and who now find their finances in need of some review, may not be willing to or may be too embarrassed to ask for help. If there is no dialogue, the whole process might come as a surprise for kids who thought that house would eventually become part of the estate. And once these second and third tier lenders begin the process of foreclosing, it is often too late for the children to step in to help.

There are some key things to consider here. The first is what options do your parents have? Can they downsize? If not, can you talk to them about the options? Often this conversation needs to happen but it also needs to approached with great care and consideration. But once the barrier has been breached, you can move to include yourself in their financial affairs before it is too late.

This is also some tricky water to navigate. But the effort is worthwhile. If they need the money, and many older Americans will, attempt to get them to allow you to help budget the funds. In the future, HUD will probably set rules about creditworthiness and because many older Americans have little or no recent credit history, this might prove an obstacle at a time when they are already facing one too many. Helping them build some creditworthiness will enable them to be in a better position - with your help - to get the best deal possible.

Once you have gained their trust, you can include your input with their financial planners, with their attorneys and possibly with their medical doctors, all of whom may not be able to tell you what their clients or patients are deciding. You can take control of the vital payments that need to be made and keep things in good financial order.

So this summer, take a moment when visiting your parents or grandparents and have the discussion. And while you are at it, consider a plan to pay off your mortgage as well. (You can find recent articles about this topic here.)

Paul Petillo is the founder and managing editor of BlueCollarDollar.com/Target2025.com and a fellow Boomer.

Another Book-length Investment Study on Women

I'm sure Warren Buffet doesn't mind the title of LouAnn Lofton's new book "Warren Buffet Invests like a Girl". But does he really or is he just showing a sensitive side?

Here is an interview the author had recently with Reuters. And below that, I'll examine some of things Mr. Buffet has said and wonder if they could have been said by a woman. Two things you must know if you don't already: I think women make excellent investors and two, I haven't read Ms. Lofton's book.



Like all quotes, they can and will be taken out of context. And the standalone quotes are just that, standalone, without the surrounding text to bring them to life. Nonetheless, do these next five quotes attributed to Mr. Buffet as Ms Lofton suggests, reveal something about the man investing like a woman, or perhaps as she should?

"A public-opinion poll is no substitute for thought." Study after study has suggested that women value the opinions of others whereas men seldom do. Not to say men don't look to the successful or experienced for information to help them invest, but given the choice, men will continually say they arrived at a decision on their own, after much thought and consideration. In fact, men look at investing as the result of much "thought" even as they gained lots of opinions along the way.

A woman's ability to network, seek advice, even consult a mentor is at the heart of the every effort to get women to invest more. They value public opinion and make decisions based on what those opinions offer. Could Mr. Buffet simply be suggesting the circle of wise friends, a class of like-minded individuals or simply the educational sources women seek akin to putting too little thought into the process? Score One for Warren investing like a man.

"I always knew I was going to be rich. I don’t think I ever doubted it for a minute." Single-mindedness, bullheadedness, even the slight hint of braggadocio are more than evident in this statement. There are women who have all of these traits and are driving the statistics that suggest women are on the upswing as investors. But the problem remains and was pointed out recently by Sheryl Sandberg, COO of Facebook when she offered this piece of advice to the graduates of Barnard College.

She suggested that women make small decisions along the way that eventually lead them” to a bigger decision, one that leads them to want more balance. Her message to this class of 2011 was “do not leave before you leave. Do not lean back; lean in. Put your foot on the gas pedal and keep it there until the day you have to make a decision, and then make a decision. That’s the only way,” she said, “you’ll even have a decision to make.” As long as women approach the world in this manner, the gap between who women investors are and what their male counterparts have become will persist. Score One for Warren investing like a man.

"I buy expensive suits. They just look cheap on me." Suits, like armor are all in the wearer's ability to pull the look off. Investing is like that as well. It's illusory and easily-lied about trait make it best suited, no pun intended, for men.

Women on the other hand like the research but not the sort of information that is clustered around numbers and charts. Instead, they want to invest and look good when they do. This keeps them from taking any investing (fashion) chance and as numerous studies have shown, means women take far fewer risks. Investments are needed and retirement is a must. But it will never be fashionable because no matter how hard a woman tries, the act feels cheap. Women need to get over that and too not over-think the process. There are some excellent ways to get to what needs to be done when it comes to investing and retirement planning and much of it comes from learning how to budget and creating a debt-less lifestyle. Score One for Warren investing like a man.

"I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over." Women have been stepping over 1-foot bars for quite sometime. And this slow and easy approach to investing is definitely a plus for their chances to be successful when they invest. But the investor we think about, the ones I have spoken to have all pointed to a single investor philosophy: sell before you get hurt.

While I am going to score this one for women, because I do advocate the slow and methodical approach to gaining wealth, there is still too little money being directed at these 1-foot step-overs. But that is a topic hinged on pay and until women reach income parity, they will not feel as well-invested as men. Score One for the women.

"Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well." and "Our favorite holding period is forever". This emotional behavior, the herd mentality mentioned in the first quote and the patience to keep with something that has long gone out-of-fashion don't seem to be reflective of the women I have met. Granted, I usually tap the sources closest to me, professional women in my network and the research done academically to form some sort of a conclusion, albeit a moving one,. But I wouldn't be far off the mark to see women (and men) chasing the chance to follow the rest of the herd if the herd seems convinced. Remember, it takes one to turn the tide in a direction and in most cases, the rest will follow. What appears to be a sale or the in the case of men, the next new thing, is in fact a display of our susceptibility to what the crowd suggests we need.

Keep in mind, I'm extrapolating here when I use the activities of everyday life to suggest that this is how we invest. But taking the emotional animal out of the equation is difficult to do and behavioral economist know this as well. As to buy and hold and Ms Lofton's suggestion that his investment style is "girlish", I offer one word: redecorate. Score Tie

I do applaud Ms. Lofton's effort at addressing this topic. Women have a great deal of ground to cover and while doing so, men could benefit from what they are learning. Better 401(k) plans with index funds, higher IRA contribution limits and requiring annuities in every 401(k) would have a leveling effect for both sexes, but much more so for women.  It's just too bad, at this point so far along in the history of these markets, that the icon a woman wants you to look at is a man.

Paul Petillo is the managing editor and founder of BlueCollarDollar.com/Target2025.com and a fellow Boomer.

What if you were only One?

Boomers take heed. And late Boomers and children of Boomers should do so as well. Is "one" the reality that most of us face in retirement?


In truth, one is a reality for far too many older adults. Unlike the often advertised retirement of living out the golden years as a couple, the chances of doing so solo is far more common than we actually want to entertain. We plan that way though and if we do, it is often the woman who is the half of the couple that survives.

No one wants to think about a life in retirement as we youthfully walk down the aisle. And even fewer think about life alone as we say our vows. But the truth is, you can do much better thinking that way right from the beginning of your journey than making adjustments later in life.

Recently, I was confronted with two statistics: there are now fewer traditionally married couples in the US for the first time and that women can expect to be, on average, widowed by the time they are 56 years old. Both of these stats point to a greater chance that at some point in a woman's life, when they least expect it, they will be a party of one.

Even if you do not want to entertain the thought, you should keep in it in the back of your mind, plan for it as if it might happen and do so subtly. Here are five suggestions that apply to both sexes but because the odds are in the favor of the woman as the survivor or better, the soloist in this journey, it focuses more on that possibility.


1) Never let a career interruption stop your retirement plan from happening. Far too often, it is the years of child-rearing, the time spent taking care of an aging parent or even "working under the table" that has the greatest impact in the security women might have twenty or thirty years later.


2) As a couple, employing every option you have as early as possible is key to getting to retirement as close to worry free as you can. This means using your 401(k) as one half of a total plan and your spouse's as the other. Often, 401(k) plans are not even close to perfect. But you can create a hybrid plan that acts as a tandem plan. Suppose one has higher fees or one has index funds that the other doesn't offer. If a women has access to annuity in hers, she should use it. (Even as I am not much of a fan of annuities, inside a 401(k), they can be just the thing a plan like this needs in part, because they can't make a determination by sex.)


3) Plan as if you may not always be a couple. More than just death takes away the best laid plans of a couple. Divorce still impacts the woman more because it often happens later in life. And because it happens later, the woman, who has a half-baked notion of a plan because of what I mentioned in the first suggestion, it is a devastating event from a financial perspective. Even a good lawyer will be able to squeeze just so much out of the marriage, which may not be on solid financial footing in the first place.


4) You may not marry. And of you don't, you need to recognize that you are the only one that can save you. If you are a woman, the chances of outliving your retirement income is much greater in part because you don't have the accumulation of two incomes to fall back on at some point.


5) Consider your living arrangement as soon as possible. A house is great if you are able to maintain it (and this includes such mundane tasks as mowing the lawn or shoveling the walks). Baby Boomers will be the first generation to join their parents in retirement and this is a very serious consideration, particularly if you are the only single sibling. While how you live is important, where you live can have biggest impact on any retirement income, whether single or as a couple.

I realize that no one wants to think about the chance that life in retirement will be a solo event, but it will be at some point for one of you. Men and husbands should make every effort to plan for this possibility. Women should never let their men forget and keep funding their retirement even when it seems impossible to do.

Paul Petillo is the managing editor and founder of BlueCollarDollar.com and Target2025.com and is a fellow Boomer.

Pensions and 401(k)s: A Shotgun Marriage?

As Boomers, we witnessed the placing of the pension plan on the endangered list, a relic of the past, a dinosaur left to the fate of its size and lack of adaptability. I personally miss them.

Is the pension plan, the dinosaur retirement plan of times gone by the answer to getting the older worker to retire at the historic retirement age and the answer to all of the economic problems facing the country right now?Possibly. Monique Morrissey, an economist and Ross Eisenbrey, the vice president of Economic Policy Institute recently offered their thoughts on why the pension offered the older worker the kind of security that is mostly absent in the 401(k).

Are pensions dinosaurs?

The idea has legs but not based on how they believe it could be achieved. While the authors suggest: "workers with only 401(k)s are better off than the nearly half of full-time workers with no retirement plan at all. The impact extends beyond older workers, their families, and younger workers waiting in the wings." They believe that adjustments made at the legislative level to make health insurance more affordable would be enough to give older workers the needed nudge to retire on time.

If, as many people I have spoken with admit, we'll never go back to pensions, perhaps we should instead look to some sort of hybrid idea. The 401(k) had the net effect of shifting risk to the worker, allowing for worker mobility and giving the employer a cost savings not present in the pension plans many were managing. Now, we pine for the days of the pension.


The birth of the 401(k)
Not that this was how it actually happened, but you can picture the backroom thinking: we'll shift the burden of retirement (and risk) on our workers and force them to buy into the stock market. The market will boom (see the bull market that coincided with the advent of the 401(k)) and everyone will be happy. We'll have a mobile and disposable workforce that can take their money with them when we no longer need them. No pensions, no loyalties, no ties that bind for decades, no human capital trade-offs in the early years. Genius. As I said, not that this actually happened. And furthermore, I believe that when Ted Benna, the father of the 401(k) and discoverer of the line in the tax code introduced the notion, this wasn't what he envisioned.


Fast forward three decades
And then the housing crisis crippled the mobility part. Too many people want to move to another city for another job but won't or simply can't. Older workers who have work are focused on being sure that they can retire and as a result are clogging the system of job turnover, necessary to accommodate the growing workforce.

Rather than shift the burden on the government by making benefits more accessible, why not use a pension trick. If employers offered an incentive like the five best, older workers might be willing to move on. Here's how it would work. In most instances, older workers earn the most in the final years of work. Why not reward them for their loyalty and expertise by offering a double or even triple contribution to their 401(k) if they also max-out their contribution. Rather than pushing the burden of catch-up onto the employee, the employer would also step-up their matches as well. It would probably require a tweak of two to current law to allow it. But the change would be worth it.


Three things would happen.
The older worker would get this massive incentive to save more in the final years and although they wouldn't be forced to retire, the contribution bonus could end at 65. The worker could stay on but the catch-up period would be over. This would allow the older worker to see the advantages of saving more sooner and capitalizing on the contribution bump. And the employer would see an offset in cost with a new hire, often employed for far less than the older worker.

The best of pensions combined with the self-direction of 401(k)s and the incentive to retire seems to be a simple tweak, a proverbial gold watch and a more secure older worker entering retirement. And the job cycle would, at least in theory, get moving again. And while Washington is legislating, how about requiring index funds in all 401(k) plans and annuities (which are forbidden to consider sex when tucked in these plans - which is a benefit for women in particular and men as well).

Paul Petillo is the managing editor of BlueCollarDollar.com/Target2025.com and a fellow Boomer.

Paying off Your Mortgage or Financing Your Retirement

I have had numerous conversations over the past week with some financial friends of mine about the idea of paying off your mortgage or funding your 401(k). The question, which I posed with a sort of bias, suggested that carting a mortgage into retirement was among the worst things you could do. So if that is the case, what should Boomers or late Boomers do?

In spite of the bleak economic news posted last week, the economy is not as bad for the majority of us as it is portrayed in the media. It is difficult however to ignore the plight our neighbors are going through, the prolonged unemployment, the forced early retirement, the underwater mortgages that are, if anything, keeping them from getting back on their feet. But the vast majority of us understand now that we need to take care of our personal finances - seemingly much more personal now than they were in the past - and that will quite possibly help the overall recovery. The more stable footing we have, the greater the chances our impact on the economy improves.

But today, I thought I'd focus on making the decisions you may have not considered: Is paying down the mortgage better than maxing out your 401(k)?

We often focus on the 401(k), the self driven retirement plan many of us have at work as the be-all-to-end-all retirement plan. It comes close but only as close as your debt in retirement allows. If you are headed towards retirement with a home mortgage, calculating the net downside of that mortgage can give you even more pressure to work more, contribute more or simply put off your retirement until a later date.

In every calculation about retirement, money stands front and center to its success. But you need a place to live and the vast majority of Americans looking at retirement in the next ten-years have a house payment saddling their plans. So I thought I'd run some numbers and offer some suggestions.

Although the actual numbers vary on where you live, $200,000 is about the average home price. A 30 year mortgage with a 6% rate will cost you about $1200 a month in mortgage payments with taxes and insurance excluded. These are rough and rounded numbers. Now if you were able to make a $100 a month additional payment, $1200 divided by 12, and apply it to the principal, the savings in total interest would be about $48,000 and it would shorten the loan by over 5yrs. So an extra $100 applied to principal would turn your 30 year mortgage into a 25 year mortgage.

The math gets better the more you pay. For instance, make a thirteenth and fourteen month payment (and for these calculations to work, you need to do it every month, not just once a year - although that's not a bad way to use the out-sized tax return) you would save almost $79,000 in interest payments and the loan would now be for 21 years. No paper work, no refinancing, no hassle and you just theoretically made $79,000.

How much would you have made had you invested the same amount in your 401(k)? Keep in mind, your mortgage is fixed at 6% and your 401(k), no matter what you invest in will have some fluctuation over time and it may never successfully return you a steady 6%. But the numbers go something like this: Invest $100 a month for 360 months at 6% return will net you a $12,000 a year income in retirement for ten-years. This means that if you are 45 and save a paltry $100 a month in your 401(k) - and I hope you are investing more than that - you will get a monthly payout for ten-years of about your mortgage payment.

But the difference is what you saved compared to what you will have to continue to pay for the loan. One allows you to enter retirement in full ownership of you house; the other gives you the ability to pay your mortgage with your retirement income. Even retirement planning neophytes can determine the benefits of having no loan and an income rather than having the income to maintain a loan.

I used an average $40,000 household income as an example and $100 as the contribution to the principal. If you were to make a contribution to your 401(k) of just $25 a week based on that income, you would come out with the results I have offered here. But if you were able to make both - a $25 a week contribution to your 401(k), which is just about 4% and make a $25 contribution to mortgage pre-payment plan, you will have only taken about $200 off the monthly budget.

The trade-off seems even but having a paid-for home in retirement gives you an great deal of economic peace of mind in terms of known worth, the potential to reverse mortgage the house and the ability to borrow against it should it come down to it. We have to live somewhere and this insures that where you live will be what you own.

Paul Petillo is the managing editor of Target2025.com/BlueCollarDollar.com and a fellow Boomer.
Be sure to check out Paul's new book available on Amazon, designed as an ongoing series. This ebook contains the Introduction and the first two chapters is on sale for only $2.99. 
Target 2025 (Ten Steps to a Secure Retirement)

Investor Equality for Women starts with (Proxy) Votes

Over the last year or two, I have grappled with a situation that many has plagued the most knowledgeable investor advocates, been largely ignored by directors of not only corporate boards and the mutual funds who vote for their shareholders, and as the business of investing has expanded, the folks who bring you the ability to invest. This situation has not improved and in fact, doesn't show any signs of doing so in the near-term.

Martha Burk is a political psychologist, women’s issues expert, and director of the Corporate Accountability Project for the National Council of Women’s Organizations (NCWO) and because of this involvement with these issues, has helped advise numerous presidential candidates over her fifty year career. And even as she recently pointed out in a column posted in the East Texas Review concerning the number of women now serving on the boards of directors as less than representative of the workforce at large, the difficulties of making the corporate world more representative of the workforce that now represents a majority of women comes with a cost.

Her points are valid when she suggests that the problem is not as simple to solve as it seems. Simply selling your shares in a particular institution will not change the way the corporation is run, how representative it is of the shareholders or worse, how your mutual fund, the proxy voter for every 401(k) investor, approves or disapproves the boards the vote for on your behalf. While money can always walk, the message it sends is muted when it comes to the numerous layers, twists and turns it must take when trying to send a message.

Last week on the Financial Impact Factor radio, we spoke with Lewis Braham about the sad state of the proxy vote. For those of you who may not be versed, the proxy vote is what you mutual fund does for you when it comes time to vote for the underlying investments in your fund choice. For an S&P 500 index fund, your mutual fund company votes for you on 500 separate occasions. While the conversation during this broadcast was centered on the mutual fund giant Vanguard and their ability to say one thing and do another when it comes to this task, the issues is systemic amongst almost all mutual funds.

And while Ms. Burk does suggest that the corporate boards need to be more representative of the shareholders, those shareholders are in the greatest majority in the funds we own and not as individual investors who could simply sell their shares and move on. And while this sort of revolutionary stance feels good, it also jeopardizes the long-term financial goals that women already trail when compared to their male counterparts.

So from which direction do we approach this complicated topic? If you were to suggest that women find more suitable mutual fund investments, and Ms. Burk does by offering a socially responsible fund family such as PaxWorld, the cost of doing so can be so egregious as to actually add to the problem. Because most SRI type funds are actively managed with a host of caveats (on what and how they should invest the fund assets) placed before its investment teams, the cost of running such funds can run as high as 2%. Add to that, or should I say subtract from the paltry returns most of these funds have posted, and you could easily trail the broadest of benchmarks by 5% or more in returns. Advocacy apparently has a very high cost.

Nothing says responsible like keeping the socially conscious from gaining ground for retirement. Which brings us to another fork in the road. While Ms. Burk wants better exposure at the corporate level, a move that would increase the voice on executive compensation, there is no guarantee that much would change.

In fact, women still trail their executive male cohorts in terms of top level, high paying jobs. This keeps the statistics for female compensations statistically lower, often skewing the numbers. More women at the top would level those numbers dramatically but as we have witnessed, over the last ten years, the pace has been much slower than most would like to see.

Over the last six months, I have had numerous conversations with women concerning this topic and two things stand out.

One, I'm not so sure women believe me when I suggest that the financial crisis we recently had would have in large part been preventable had women been at the helm. Even women who have made their living in the world of finance seem surprised by this proclamation. While women have their own set of biases when it comes to investing, intuition plays a major role in how they approach decisions. To advance to the top, empirical evidence, the sort of thing that men survive on often displaces this feeling of what is right and wrong. They may know better but convincing men to act otherwise is often back-burnered in favor of profits.

Two, because of this parsing of information to make it more digestible to the men who already reside at the top of these companies, this additional layer of thinking about what is right and perhaps what might be wrong would have kept the markets from reaching bubble-like status. Do women get exuberant about investing? Of course they do. But for different reasons. Do women desire the same compensation? Of course they do and when they do, the

The solution will be slow in coming. As Ms. Burk does point out, the workforce is now more skewed towards women while their presence at the executive level, both corporately and on the boards of mutual fund companies has been stagnant. It has been well noted that women who participate in their retirement plans at work has increased, it still lags behind men in total invested dollars.

It is easy to suggest that women increase their contributions to these plans. But doing so only enables the current corporate structure to stay in place. Ms. Burk's assertion is correct: "The money female workers pour into these retirement funds is huge, and the folks that control the votes ought to pay attention to who is represented on the investment end. All these entities should have policies against supporting all-male boards."