ADDING DUES TO FUND RETURNS SKEWS RESULTS.Byline: Deborah Deborah (dĕb`ōrə), in the Bible, prophetess and judge of Israel, the only woman to hold that office. Under her guidance Barak conquered Sisera and delivered Israel from the oppression of the Canaanite King Jabin. Adamson “Adamson” redirects here. For other uses, see Adamson (disambiguation).
The Adamson was an English car manufactured in Enfield, Middlesex, from 1912 to 1925. Daily News Staff Writer What happened? One day, the Beardstown Ladies The Beardstown Ladies were a group of older women who formed an investment club, formally known as the Beardstown Business and Professional Women's Investment Club, in Beardstown, Illinois, USA. Investment Club is a shining example of the power of individual investors. The next day, the members' results are being torn apart in a front-page front-page adj. Worthy of coverage on the front page of a newspaper: front-page news. tr.v. front-paged, front-pag·ing, front-pag·es article in The Wall Street Journal following a Chicago magazine expose titled ``Bull Marketing.'' And all because of a simple clause in the footnotes of the paperback edition of a 4-year-old book. The note didn't appear in earlier editions. Here's the note that tipped off the Chicago magazine writer. It's on the copyright page of The Beardstown Ladies' Common-Sense Investment Guide paperback: ``Investment clubs commonly compute To perform mathematical operations or general computer processing. For an explanation of "The 3 C's," or how the computer processes data, see computer. their annual `return' by calculating the increase in their total club balance over a period of time. Since this increase includes the dues that the members pay regularly, this `return' may be different from the return that might be calculated for a mutual fund or bank.'' Why is that bad? Here's how the inclusion of new contributions would skew (1) The misalignment of a document or punch card in the feed tray or hopper that prohibits it from being scanned or read properly. (2) In facsimile, the difference in rectangularity between the received and transmitted page. the return in a simplified example: If an investor put in $10 million in a $100 million mutual fund one day, and the investment is included in calculating the return, the fund manager could claim that the fund had a 10 percent return that day even if the market didn't move. The proper way is this: Assuming that the $100 million fund had 10 million shares, with a per share price of $10, the $10 million added on this day would buy 1 million shares. The fund's total would rise to $110 million and 11 million shares. However, the per share price remains at $10. There's no stock appreciation, given a flat market for the day. The Beardstown Ladies are charged with using the first, incorrect method. |
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