This week we take a look at the issue of Accessibility and your portfolio. In light of recent headlines spotlighting the freeze on investor withdrawals imposed by some renowned hedge funds, it’s vital that readers understand the importance of accessibility when it comes to their investments.

“Fund Manager will go to well amid upheaval,” blares the headline in an April 2008 issue of The Wall Street Journal. The article goes on to describe how clients of the D.B. Zwirn & Co. hedge fund aren’t likely to see the $2 billion they’ve asked to pull this decade, as their fund manager, Daniel Zwirn, faces investigation by the Securities and Exchange Commission for charges that include improper accounting.

“Hedge funds are still reeling after banks unexpectedly pull credit lines and demanded more security against loans, forcing firesales and heavy losses,” says FT. com, Financial Lines on-line. The article explains that hedge funds now face a new threat with investors abandoning them. This in turn raises the risk that the funds will have to sell assets at any price to raise the cash to meet withdrawals.

And finally, in an April 1, 2008 on-line article, Money.com notes that New York activist hedge fund Pardus Capital Management LP is halting investor redemptions indefinitely, at a time when many of its holdings are plummeting in value.

REMEMBER: the A in FACTS stands for ACCESSIBILITY

How does this affect me you might ask? I don’t have any money invested in hedge funds. The answer is; this can also happen with mutual funds, which are more universally used. Some mutual funds are back-end loaded. This means that while you’re not charged up front when buying the fund, you will be charged when it comes time to pull your money out.

It’s always important to do your homework and ask the important questions, like:

1. If I need to take money out, how soon can I get it?
2. If I take out my money, will I incur any fees?
3. Does that change based on the amount of time the money has
been in there?

Accessibility is everything at CAIM

At CAIM it’s all ‘plain vanilla.’ That’s because we believe that your life should be exciting, and your investments boring. Our ‘plain vanilla’ type of investments, trading on an organized exchange, are always ACCESSIBLE TO YOU. Plus all CAIM accounts are individually managed, not co-mingled.