Odds & Ends- Q&A

In this week’s blog, I want to first direct your attention to a conference for business students in the Florida area called RISE. The website is http://sba.udayton.edu/rise
The conference is from March 29-31, and includes keynote speakers such as the COO of McDonalds, the Commissioner of the SEC, and many other executives in the finance industry. Many thanks to Jeff Sanders from Memphis University for sharing this opportunity.

Also, on Monday March 5th I will be appearing very briefly on CNBC’s Fast Money at 8 pm. I will be asking the financial guru’s of the show, Guy Adami, Eric Bolling, Jeff Macke and Tim Strazzini an investment question. The four are experienced Wall Street Traders. Their combined experience includes positions at Merrill Lynch, Goldman Sachs, director of a hedge fund, as well as running their own wealth management companies.

This blog is going to be a Q & A, as I’ve received a few questions that might be helpful to others.

Question:
“In reading one of your posts on Experience, I was wonderingwhether you ever noticed on your corporate finance interviews ifanyone had their CFA. I signed with International Paper as financialanalyst but never found anyone who had their CFA.”

Answer:
The CFA shows your seriousness and competency in the field of finance, and will certainly advance your career. Almost all of the interviewers I met had their CFA- and those who didn't were analysts studying for it. In the corporate finance world, especially at consumer product companies (like International Paper), it may be possible that the CFA is not as widely held by employees as in other finance positions. However, specifically at Unilever, most of the management had their CFA. Just because your colleagues don’t have a CFA does not mean you don’t need it- it will distinguish you from the rest of the pack and increase your salary potential.

Question:
“I read your blog on the experience network, very well written and interesting stuff. Congrats on your job with Cambridge Associates, it's a great company. Have you done extensive research on Roth IRA's? I'm going to start putting money into one, I wanted to check if you had done any research as to which are the best? It's good to see we have ambitious undergrads like yourself who will boost the Babson brand.”

I know I didn’t have to include the whole email…but I couldn’t help the Babson plug.

Answer:

You don't invest in a IRA like you would invest in a Fidelity mutual fund. There are not IRA's that are the "best"- they are constructed by each individual investor. An IRA is really just a tax shell under which you can make any investment you choose. That said, there are some things that are not appropriate for an IRA account, such as municipal bonds (since they are tax-exempt) and insurance annuity contracts. If you were interested in the Vanguard International Index Fund you could open an IRA account at Vanguard and purchase shares in the fund. However, you could also purchase shares in their other funds at Vanguard if you wanted to. Another good choice is to open an IRA through a brokerage firm, like Scottrade, and then you can diversify your IRA portfolio through any investment you choose, whether it's a Fidelity index fund, a Vanguard mutual fund, or individual shares of Microsoft. It's often called a "self-directed" IRA. That would be what I advise for you. You could also do it through a bank, but often banks have a limited list of investments you can choose from and I generally don't trust them- they tend to push certain investments and you have to be careful about fees.