Reno Gazette-Journal from Reno, Nevada • Page F2

2F SUNDAY BRIEFING Alook back at the week in business and ahead DATA SNAPSHOT PAGE TWO NEW SINGLE-STREAM CONVEYOR YSTEM FOR ECYCLING EBUTS IN RENO now a whole lot easier to separate the recyclables from Reno- Sparks businesses. And being done on a conveyor system inside a warehouse operated by Nevada Recycling Salvage, which estimates the new sorting system, the first of its kind locally for commercial use, is keeping 90 percent of the waste it processes from area landfills. are helping companies go to zero said Rick Lake, account executive at Nevada Recycling Salvage, which held demonstrations of its new sorting system on Thursday is our goal to sort out as much recyclable products as possible, up to 90 percent. The rest does get sent to a It adds up to tons of mostly cardboard and paper products salvaged each day, but the operation also recycles plastic wrapping materials and separates out wood products. INDUSTRIAL MOMENTUM BUILDS IN Q1, A CCORDING TO CONSTRUCTION EPORT Momentum spurred by construction of a massive warehouse in north Reno could carry the industrial sector through the upcoming year, a report Tuesday shows.

The building off Lemmon Drive is the first major construction in years in the Reno-Sparks area, going up before its owner, Dermody Properties, has any tenant in hand. bet is that new project will be leased up in full before it is completed this Tom Miller, president of Miller Industrial Properties, wrote in his first-quarter report. could be sufficient indicators in the market by mid-2014 to allow the investment community to get more receptive to speculative report cited LogistiCen- ter 395 project launched last week as one of four and the biggest, totaling more than 2 million square feet of additional industrial space expected regionwide. For the January-March period, the overall industrial vacancy rate was 7.88 percent, down from 8.38 percent in the fourth quarter of 2013 and the eighth consecutive quarterly decline, according to the report. HORIZON CLOSES ITS DOORS FOR IMPROVEMENTS Owners of the Horizon Casino Resort at Stateline closed the property Tuesday for renovations.

Officials said earlier in March that they plan to spend on improvements to the property, which dates to the 1 960s as Del Sahara Tahoe in the casino corridor on the south shore of Lake Tahoe. Jon and David Park, managers of Neva One LLC, acquired the 539-room hotel-casino and earlier this year received the go-ahead from the Nevada Gaming Commission. The owners have named Warner Gaming to manage the casino, which will be first property in Northern Nevada. LOOK AHEAD AAA Nevada is scheduled to release its monthly state and local gasoline price survey on Tuesday. In other business news this week: Monday: In Washington, D.C., the Federal Reserve releases consumer credit data for February.

Tuesday: In Washington, D.C., the Labor Department releases job openings and labor turnover survey for February. Wednesday: In Washington, D.C., the Commerce Department releases wholesale trade inventories for February and the Federal Reserve releases minutes from March interest- rate meeting. Thursday: In Washington, D.C., the Labor Department releases weekly jobless claims; Freddie Mac, the mortgage company, releases weekly mortgage rates; and the Treasury releases federal budget for March. Friday: In Washington, D.C., the Labor Department releases the Producer Price Index for March. and Associated Press reports are helping companies go to zero Rick Lake, account executive, Nevada Recycling The financial and investment i ndustry carries with it a well- eserved aura of corruption and reed.

he SEC constant- investigates quest ionable Wall Street ractices. While a ajor contributor to he financial crisis a nd the recession a nd its aftermath, it eems the New York inancial industry ever missed a beat in collecting utsized bonuses, to say nothing of utlandish eight-figure salaries. uch of the money made in the i nvestment segment of the finan- ial industry is collected through ees, whether they are annual, ront loads, back loads or based on hurn (transaction fees). I not the fees themselves that a re the issue; how they are idden that ends up hurting unso- histicated investors. A frequent way that investors a re unknowingly charged high ees is through mutual funds.

hecking your investment account or excessive mutual fund fees is asy and could save you a lot of oney. Mutual fund fees Sometimes, the same mutual unds have different share classes. hey offer the exact same pools of i nvestments. The only differences etween them are their share class a nd fee structure. Excessive mutu- a fund fees are very common and a re an easy way for unscrupulous a dvisers to make commission at he expense of their unwary cli- nts.

enerally speaking, if the sec- nd last letter of the mutual fund ymbol is or you might be aying excessive fees. If that let- er is I or you have the one of he lowest-cost options for that und. ifferent share classes origin ally were created to give better ricing to large traders with large locks of cash to invest. The the- ry is that part of the cost savings attracting one large investor an be used to reduce the cost to hat investor. ut today, the share classes are imply used to bilk smaller inv estors.

Typically, there are minim um investment sizes that are equired to get into the cheaper hare classes. I nvestment advisers often have he ability to invest client assets in he lower cost share classes, but hey are incentivized to push mon- into the more expensive funds ecause they and their ealer get a kickback of part of the a dditional fees (front and back oads and 12b1fees). I your adviser or nforces minimum investment izes while the fund does not, you hould question whether or not our interests are being placed irst. A ll too often, investors are put i nto these funds without knowing he extent of the fees that are bei ng charged. These fees are harged as a percentage of assets hat are in the fund itself.

Typical- such fees are separate from the ee that is paid to an investment a dviser and disclosed to the clients a the When his occurs, clients effectively are p-charged. I nformation on mutual funds a nd their fees is not hard to find a nd is readily available on morn ingstar.com or bloomberg.com or going to the mutual webs ite. ost small investors take he time to research the mutual unds in which they are invested. hey leave it to others, the 401(k) ompany or the broker or adviser choose for them. Fees and their ffects on returns Most mutual funds out- erform their benchmark, so the i mplications of high fees on long un returns are substantial.

Paying igh fees for underperformance is a double negative for investors. his is particularly true for utual funds with large front-load ees. For a mutual fund manager overcome the initial charge usually around 5 percent) would ake years of consistent outperform ance. his is because that 5 percent is ot a part of the investment, as it is aken out up front to pay the bro- and adviser (i.e., you a re only investing 95 percent of hat you paid). make things worse, mutual unds with front-load fees some- imes have higher annual fees and ometimes a back-end load.

This ombination of high fees makes it uite difficult for investors to articipate in any of the benefits active management, and it usu- a lly results in substantial under- erformance. Active management Active management through utual funds still has many bene- its when used properly. For xample, active management can rovide investors with exposure to nfamiliar markets, investments hat require economies of scale, omplicated investment strategies a nd consistent superior perform ance. ome money managers may ell be worth every penny that hey are paid. But a lot easier or a manager to have a positive i mpact on a portfolio if the fees a re reasonable.

Trusting your i nvestment adviser The general public should be a ble to trust their investment adv isers with their money just like hey are able to trust their doctor ith their health and their me- hanic with their cars. I nvestment advisers are sup- osed to be protectors of their money. They a re supposed to allow unsophisti- ated investors a fair shot at a ecent risk-adjusted return. nfortunately, the fee incen- ives can misalign the interests of he client and their adviser. The est form of incentive is a fee a rrangement that is a small per- entage of the assets with all mu- ual funds in the lowest cost share lasses with no front- or back-end oads or 12b1fees.

Alignment is a chieved because the advisergets aid more only if the account actu- a lly rises in value. onclusion: Investors should now the all-in fees they are being harged. I low-interest-rate orld, paying appropriate fees ould be the difference between a uperior performance and a sign ificantly subpar one. Robert Barone (Ph.D., Economics, eorgetown University) is a principal of niversal Value Advisors, Reno, a locally wned and operated Registered Investment A dviser. Dustin Goldade is a financial analyst a UVA and contributed to this column.

arone is a former director of the Federal ome Loan Bank of San Francisco and is urrently a director of AAA Northern alifornia, Nevada, Utah Auto Club, and the a ssociated AAA Insurance Company where he hairs the Finance Investment Committee. obert is available to discuss client investment eeds; local clients welcomed. Call him at 7 75-284-7778. PERSONAL FINANCE Do you know the real fees on your investment account? ROBERT BARONE Traders work on the floor at the New York Stock Exchange on June 21in New York. The financial and investment industry carries with it a well-deserved aura corruption and greed, Robert Barone says, which should compel everyone invested in the market to give their portfolios extra scrutiny and to be on top of assessed fees at all times.

IMAGES The stock market began this ast week behaving quite bullish ith the major market indices, like he Standard 500 index, aking new highs by he middle of the eek. Even some rofessional traders ere remarking that he 500 app eared poised to ove up to the 1920 1940 area. I nstead, stocks old off on Friday following the onthly nonfarm payroll report or March which came in at 1 92,000 jobs created, slightly be- ow the expectation of 200,000 obs, while the jobs created for the onth of February was revised igher with 22,000 more jobs cre- a ted than previously reported. A dditionally, the unemployment ate held steady at 6.7 percent, a lthough the consensus was exp ecting a slight decline to 6.6 per- ent. In general, the message of he employment data for March a ppearsto be that the labor market i improving but only very gradu- a lly.

the kind of employment eport that the doves at the Federa Reserve, like Chair Janet Yellen, ill likely see as still too soft. rankly, the jobs report was elatively benign and the futures arket actually traded higher for early two hours following the mployment data release, so elieve everything you read about he stock market being sold off ue to the jobs report. I would be ore likely to believe that the arket dropped because investors ad to sell some of their stocks to ay their tax bill next week. ver the past year, an equally lowing employment report would ave been met with cheers form he New York Stock Exchange, but oday we saw a shift from risk-on risk-off. How the market reacts the data is more important to us a observers of investor behavior han the employment data alone.

market reaction points to i nvestors becoming much more kittish and possibly losing their a ppetite for risk, given that they seen any gains now for early three months. It is import ant to remember that this is how road topping patterns are ormed, the kind of which markets ike to decline out of over longer eriods of time. However, one own day does not a trend make, the jury is still out on what this arket has in store for next week. I the meantime, the moment um of advancing to declining tocks turned back negative on riday, which is not a positive evelopment. However, on the plus ide of the ledger, the one-month olatility index for the 500 emains in a zone that has historic ally been bullish for the stock arket.

Again, we will need a few ore days before we can deter- ine whether decline will ave any legs. I you are following stock mark et trends recently then you are a ware that there are just a couple areas in the market that are still olding their ground. Using our elocity and acceleration mea- urements, these areas are U.S. arge cap value stocks (dividend aying), U.S. mid-cap value stocks, merging market stocks, Asia acific stocks and small-cap fore ign stocks.

These may appear to an unlikely group to be out- erforming at this time, but I ould suggest that there is a rea- on for it and that it will become learer in a couple of months down he road. he coming week will be a rela- ively light weekfor economic ews, but it will be the start of the irst-quarter earnings season. The ollowing economic reports may ave the potential to move the arket: FOMC Minutes (Wednes- ay), Jobless Claims, (Thursday) a nd Producer Price Index with onsumer Sentiment (Friday). Laif Meidell, CMT is the President of A merican Wealth Management, a Reno-based egistered Investment Advisor, and is a ubadviser to the AdvisorShares Meidell actical Advantage ETF (ticker: MATH), an SEC- egistered fund. He can be reached at 7 75-332-7000 or ecurities offered through Foothill Securities, I member American Wealth anagement is a separate entity from oothill Securities.

Performance numbers used i this article were obtained through eSignal a nd are not guaranteed to be accurate. MARKET TRENDS: WEEKLY MARKET RECAP LAIF MEIDELL Bullish week ends with job skittishness.