The Modesto Bee from Modesto, California • D5

OUTPUT: 15:52 USER: PHUND MASTER 10-12-10 PAGE: 5 MODESTO SUNPRE1 5 BLACK YELLOWCYAN MAGENTA BY MARK JEWELL The Associated Press BOSTON The recipe for suc- cessful investing sounds pretty simple: have reasonably good tim- ing over the long haul and avoid big mistakes. what helps professionals build a worthy track record. For average investors, advis- able to set the bar lower. Construct a balanced portfolio of low-cost mu- tual funds, make regular contribu- tions to invested savings, and stick with it until time to retire. The problem is that many inves- tors seem to think better than that and can beat the stock market.

Yet research consistently shows that a game. The latest findings are from Morningstar which com- pared the performance numbers that mutual funds posted with the returns that the investors in those funds actually obtained over mul- tiple years. typical to see gaps between the figures. because investors move cash in and out as markets rise and fall, and consequently experience the same results as the funds they invest in. SIZING UP THE PROBLEM Funds posted an average annual- ized return of 7.1 percent over the past 10 years, through the end of 2012, Morningstar found.

But the returns that investors actually re- alized were a full percentage point lower: 6.1 percent. Those totals fac- tor in all stock funds and bond funds that Morningstar tracks, as well as both individual investors and institutional shareholders. If the gap between the figures seems modest, you may be under- estimating the impact of com- pound interest. Small differences really add up over time. Gaps between fund returns and what Morningstar calls can vary widely, but the investors almost always underper- form.

Over the past five years, funds posted an average annual- ized return of 2.0 percent to 1.5 per- cent for their investors. Over three years, the gap was smaller: 7.6 percent for funds to 7.4 percent for investors. IRRATIONALITY TAKES OVER The findings confirm that fund shareholders are often their own worst enemies. people hold on to funds for long, generally go- ing to have a bad says Rus- sel Kinnel, direc- tor of fund research. Fear and greed often take over, particularly when stocks are veer- ing wildly up and down.

Many in- vestors latch on to a hot stock or fund too late and miss most or all the upside. When the market de- clines, they bail out and par- ticipate in the eventual rebound. With stock prices currently near five-year highs, instructive to consider lessons learned a dozen years ago. When technology stocks and Internet funds surged in the late 1990s, investors piled in. But many got in too late, and reeled when the tech bubble burst.

There are examples of funds whose investors have outper- formed the funds themselves. That occurs when a shareholder invest- ed in the fund when it delivered its strongest returns, and keep cash in the fund when it was un- derperforming. But those instanc- es are comparatively rare. A NOTE OF CAUTION The more volatile a returns are, the more likely its investors enjoy the full returns of the fund. One example is Fairholme Fund (FAIRX).

long been one of the top-performing large-cap value stock funds because of the high- conviction approach of its manag- er, Bruce Berkowitz. Fairholme typically invests in just a couple- dozen stocks, and in recent years invested heavily in financial services stocks, such as AIG and Bank of America. The performance has been extremely erratic the last two years: a 32 percent loss in 2011, followed by a nearly 36 per- cent gain last year. The roller- coaster ride been particu- larly good for investors, despite 10-year average annu- alized return of 11 percent through the end of January. Over that period, its investors averaged 3 percent, or nearly 8 percentage points less, according to Morning- calculations.

A DOSE OF DISCIPLINE better you know yourself what good at, and when you get emotional the better like- ly to do as an Kinnel says. If you know prone to mak- ing rash short-term moves, it can be worthwhile to check how a posted returns differed from the results investors experi- enced. If there was a sizable gap, it means the investors have, on the whole, had poor timing. That could increase the chance that you fare well either. To assess the gaps between a past returns and its inves- results, click on the perfor- mance tab for individual funds listed on website.

An page pro- vides data on the gaps. How much of a gap is too big? no hard rule. One option is to consider that the average gap for all funds has been nearly a per- centage point over the latest 10-year period. Anything larger than a percentage point gap in a 10-year results may suggest additional diligence is warranted. Be careful, however, in reading too much into a gap over just a few years.

Cash flows in a given period can be affected by fac- tors that have little to do with in- decisions. Examples in- clude a fund that closes to new in- vestors for a period of time, or one that launches after a period when stocks have fallen sharply, and few investors are buying. Says Kinnel: can be quirks, so important to look at the big want our fair share, which would certainly be 20 percent, and almost halfway The initial production capacity constraints for Greek yogurt were solved last summer, and its new a lower-calorie offering, has done well, Powell said, add- ing that will be a winner for Gaining ground in Greek is a big challenge, though stock ana- lysts counting out Gener- al Mills. have the Yoplait brand, which is a very powerful and recognized said Jack Russo, an analyst with Ed- ward Jones. Cereal to drive Another challenge, albeit a more short-term one, is revving up cereal sales.

Cereal is the largest U.S. busi- ness, providing $2.4 billion in revenue last year, and General Mills and Kellogg dominate the market. But General cere- al sales for the first half of fiscal 2013 are down 2 percent over a year ago. The innovation in cereal failing to drive according to a report by Goldman Sachs analyst Jas- on English, who put a rat- ing on General stock last month, a rarity. see a risk of product dis- continuation ahead or at a minimum, continued ineffec- tiveness of net En- glish wrote.

He singled out Cheerios, Gen- eral largest cereal fran- chise. The emphasis on extend- ing the brand Chocolate Chee- rios, Peanut Butter Cheerios, etc. may be running out of steam, he wrote. Powell said General lag- ging cereal sales stem from ramped-up promotions in the category. competitors increased (promotion), and ours was a little bit lower than it needed to be.

We have to ad- He dismissed the notion of an innovation slowdown. Cheerios line extensions have been an he said. A new one Honey Nut Medley Crunch hit store shelves recently, along with a new iteration of Fiber One cere- al and Peanut Butter Toast Crunch, a spinoff of Cinnamon Toast Crunch. New product offerings and brands have been critical to General success in its snacks business, which had $1.6 billion in U.S. sales last year, and has grown at an annu- al average of more than 8 per- cent since 2007.

For the first half of fiscal 2013, sales were up 10 percent year-over-year. The company brought its Fi- ber One brand to snacks in 2007, and now the market leader for nutritional snacks, accord- ing to SymphonyIRI Group, which tracks sales in tradition- al grocery stores. General Mills said Fiber One bars racked up more than $300 million in sales during fiscal 2012. The Nature Valley brand, which comes in ever-evolving varieties and flavors, leads the U.S. granola bar market with more than $700 million in sales last year.

snack division is doing said Mairs and Pow- Johnson. are gain- ing share significantly within snacks, and their products re- ally skew toward health and Two international acquisitions In 2012, General Mills moved further into snacks and more importantly, fast-growing inter- national markets by acquir- ing Yoki Alimentos SA for al- most $1 billion. The deal for the Brazilian foodmaker was Gen- eral second big interna- tional acquisition within a year. In 2011, it paid $1.2 billion for a controlling stake in Yoplait SA, the global yogurt powerhouse that had long li- censed the Yoplait brand to Gen- eral Mills in the United States. More than 30 percent of Gener- al sales come from inter- national operations.

Expanding in dynamic markets such as Brazil and China is critical to overall sales growth, including through acquisitions. are interested in getting scale in a few other Powell said, pointing to India. got a business there now built around Pillsbury flour products, and we just ac- quired a very small company called Parampara (which makes spice and sauce mixes). We like that business and we can grow it. But like to be bigger in India, which is a huge market and is going to be so im- Still, Powell added, can never really predict how merg- er and acquisition activity will MILLS CONTINUED FROM D-6 WORK MONEY Fund investors hurt themselves through poor timing of the teenager has saved for the young college expenses.

both are banking on my parents to pay for their the reader wrote. The conflict: Recently, the mothermoved to an assisted living facility. my sister continues to live in my condo. She has begun, for the first time in nine years, to pay the utilities and other bills. Otherwise, she and my nephew lived there for all those years with my mother paying for Perhaps the sister factoring in the care her sibling gave to their mother in exchange for living there.

The sister who corresponded with me is upset that her sibling is pressing their mother, who has cancer, to put something in her will to pay for her college education. nephew is a nice kid, but he is not much of a student and I have doubts make it through a four-year college. My assets are fine, and she can afford to give him money for college. But I personally feel it would be a waste of time and that he might want to try working a bit and do a little The dilemma: The correspondent sisterwants to know if wrong to feel that it is the responsibility to pay for their schooling. her sister use her own inheritance instead of seeking a separate award for the son, she asked.

The grandmother wants to do something for her grandson and has talked about establishing a trust for him. understand that someone other than my sister needs to be the trustee in charge of the funds. My mother is one who always helps the underdog, and in this situation I feel like she is rewarding my sister for being needy and The bottom line: This is a commonproblem in many families. Aging parents are taking care of one or more of their not-so-responsible grown children. One or more family members are concerned that the parent or parents are being bamboozled.

In this case, I would assist the ailing mother in finding a good estate attorney. The attorney can help her determine the best way to will her money, including leaving some in a trust to her only grandchild to go to college. a kind thing for her to do. If there is a concern that either he or his mother will waste the money, the grandmother can set up the trust and designate a responsible person perhaps someone not in the family to oversee the distribution of money from her estate to the young man. Before seeing the attorney, do some research on the difference between a trust and a will.

Nolo.com has a good explanation of the pros and cons of each. Search for trust v. Who is right in this type of financial fight? I believe parents should, as best they can afford, pay for their college education. Indeed, the sister could do it with her share of the estate. So yes, quite audacious for the sister to push her ailing mother to pay.

reasonable to be concerned that an irresponsible adult child is taking advantage of the generosity of an aging parent. And yes, fair to voice your concerns and even take steps to protect her assets so she go broke. But in the end, the money to do with what she wants. If mired in a money dispute with family members, send your story to In the subject line, put is right in my family financial You can remain anonymous so you have to fight about putting your business in the street. Write to Michelle Singletary, in care of The Washington Post, 1150 15th St.

N.W., Washington, D.C. 20071, or email her at THE WASHINGTON POST WRITERS GROUP SINGLETARY CONTINUED FROM D-6 phenomenon as infla- and it has been steadily infiltrating job mar- ket. Across industries and geo- graphic areas, many other jobs that used to require a di- ploma positions like dental hygienists, cargo agents, clerks and claims adjusters are in- creasingly requiring one, ac- cording to Burning Glass, a com- pany that analyzes job ads from more than 20,000 online sourc- es, including major job boards and small- to midsize-employer sites. This up-credentialing is push- ing the less educated even fur- ther down the food chain, and it helps explain why the unem- ployment rate for workers with no more than a high school di- ploma is more than twice that for workers with a degree: 8.1 percent versus 3.7 percent. Broad assumptions made Some jobs, like those in sup- ply chain management and lo- gistics, have become more tech- nical, and so require more ad- vanced skills today than they did in the past.

But more broad- ly, because so many people are going to college now, those who do not graduate are often as- sumed to be unambitious or less capable. Plus, a market for employers. you get 800 for every job ad, you need to weed them out said Suzanne Manzagol, executive recruiter at Cardinal Recruit- ing Group, which does head- hunting for administrative positions at Busch, Slipakoff Schuh and other firms in the Atlanta area. Even if they are not exactly applying the knowledge they gained in their political science, finance and fashion marketing classes, the young graduates employed by Busch, Slipakoff Schuh say they are grateful for even the rotest of rote office work they have been given. sure beats washing said Landon Crider, 24, the soft-spoken runner.

He would know: He spent sev- eral years, while at Georgia State and in the months after graduation, scrubbing sedans at Enterprise Rent-a-Car. Be- fore joining the law firm, he was turned down for a promo- tion to rental agent at Enter- prise a position that also re- quired a degree because the company said he have enough sales experi- ence. His college-educated col- leagues had similarly limited opportunities, working at Ruby Tuesday restaurant or behind a retail counter while waiting for a better job to open up. am over $100,000 in student loan debt right said Megan Parker, who earns $37,000 as the reception- ist. She graduated from the Art Institute of Atlanta in 2011 with a degree in fashion and retail management, and spent months waiting on at a couture boutique, among other stores, while churning out office- job applications.

will probably never see the end of that bill, but not real- ly thinking about it right she said. know, this is a really great place to Overqualification a nonissue The risk with hiring college graduates for jobs they are su- premely overqualified for is, of course, that they will leave as soon as they find something bet- ter, particularly as the econo- my improves. Slipakoff said his firm had lit- tle turnover, though, largely be- cause it has been expanding so rapidly. The company has grown to more than 30 lawyers from five in 2008, plus a support staff of about 15, and promo- tions have abounded. expect you to grow, and they want you to said Ashley Atkinson, who graduat- ed from Georgia Southern Uni- versity in 2009 with a general studies degree.

not stuck here under some glass Within a year of being hired as a file clerk, around Hallow- een 2011, Atkinson was promot- ed twice to positions in market- ing and office management. Crider, the runner, was given additional work last month, helping with copying and bill- ing claims. He said he was tak- ing the opportunity to learn more about the legal industry, since he plans to apply to law school next year. The greatest success story is Laura Burnett, who in less than a year went from be- ing a file clerk to being the paralegal for the litiga- tion group. She did not ask for the promotion, but the partners were so impressed with her fil- ing wizardry that they figured she could handle it.

gave me a raise, said Burnett, a 2011 graduate of the University of West Georgia. The typical paralegal position, which traditionally has offered a path to a well-paying job for less educated workers, requires no more than an associate de- gree, according to the Labor De- occupational hand- book, but the job is still a step up from filing. Of the three daughters in her family, Bur- nett reckons that she has the best job. One sister, a fellow West Georgia graduate, is pro- cessing insurance claims; an- other, who dropped out of col- lege, is one of the many degree- less young people who still can- not find work. Besides the promotional pipe- lines it creates, setting a floor of college attainment also creates a clubbier office social atmo- sphere, said Slipakoff, who han- dles most of the hiring and is especially partial to his fellow University of Florida graduates.

There is a lot of trash-talking of each col- lege football teams, for exam- ple. And this year the Christmas tree ornaments were a colorful menagerie of college mascots Gators, Blue Devils, Yellow Jackets, Wolves, Eagles, Tigers, Panthers in which just about every school was represented. know, if we had some- one here with just a GED or something, I can see how they might feel slighted by the social atmosphere he says. really is something sort of cohesive or binding about the fact that all of us went to col- DIPLOMAS CONTINUED FROM D-6 BUSINESS WIRE The company admits it could have ramped up promotions more. The Modesto Bee www.modbee.com SUNDAY, FEBRUARY 24, 2013.