Thanks BG. This is information I never get at Jones. I appreciate the time you've taken to answer my questions.

BondGuy,

You know WAY more about bonds than I do, but it's not hard to figure out the 1-star Morningstar rating.  Over the past 3 years it has had much worse performance with higher volatility than its peers.  Of course, it did great before that, but one thing buyers in this category value I think, are predictable returns and income.  ORNAX fails in that regard.  That doesn't necessarily make it a bad fund or inappropriate investment, but it's something to be accounted for.

BondGuy,

Almost forgot.  Can you explain to me why inflows and lack of investment opportunities would lead to a fund lowering its dividend?  Are you saying they parked the money in cash and that's why yield went down?  If they did that, did they really do what you would expect a muni fund manager to do?

Thanks in advance for the education...

lMm, investors in this catogory are looking for high income. Volatilitiy comes with the territory. Predictablity of returns requires a tradeoff to shorter maturity paper.

Because the market for spread bonds was still operating in a locked mode well into 2009 the managers couldn't find paper to in which to invest. Yet, with positive net inflows there  were more mouths to feed, so to speak. More dividend paying shares were being created everyday.. Something had to give.

One more point on ORNAX. Investors in this fund aren't looking to meet a certain performance goal. Having an investment that's top of it's class in performance is comforting. However, if most or all of that performance comes from gains it does the income buyer little good. This fund is all about one thing; Income! That's it, period! In that way it differs little from a muni bond itself. That the bond goes up and down in value with the market/economic cycle is of little concern to the holder. It's all about the coupon payment. There will be times during that cycle that the bond may be top of the class, other times, bottom. So what! As long as it pays that coupon. And, as well all know, performance is a game. A game you can't win, which is why you never recco based on performance.

This is the difference in the way this fund is managed. While almost everyone of it's peers is playing to the quarterly report, these guys are only after one thing; Income. And they are good at it! But, looking nice and shiny for the quarterly comparos? Not what these guys are about. And they could care less.

Navet, you're right, this insight isn't available at Jones. Nor is it available anywhere else. Remember what i said about understanding the investment? My insight comes from doing just that. You can do the same. Find an investemnt and apply this standard: Say to client "If there is any question you can ask me about this investment that i can't answer, i won't put it in your portfolio." To do that, start by reading the prospectus. Then interview wholesalers and managers. This ain't rocket science. It just takes an honest effort to understand what you are doing. The more you understand the more confidence you will gain.

[quote=navet]

Thanks BG. This is information I never get at Jones. I appreciate the time you've taken to answer my questions.

[/quote]

Funny, I got that info directly from my Oppy wholesaler.  So, you're blaming Jones for your inability to ask your wholesaler questions?  That's just lame.   

[quote=N.D.]

[quote=Spaceman Spiff]

Where is the conflict of interest in selling bonds?  Are you thinking that Jones is getting some kind of revenue sharing stream from the bonds in our inventory?

[/quote]

 Yes. They all do. Bonds are marked up as they are put in inventories. 

[/quote]

I guessing that's not what he was talking about.  Selling someone a bond that has a mark up isn't a conflict of interest.  I like how you stopped your highlighting at "revenue" and didn't include "sharing stream."  That worked out well for you.  I'd still like to hear Navet explain the conflict of interest he has with selling a bond out of the Jones inventory. 

BondGuy, as usual you make some good points.  ORNAX certainly seems a suitable investment despite its 1-star rating for those wanting steady tax-exempt income.

The conflict of interest I was talking about before is the conflict caused by our transactional business. We are on the phone soliciting business out of necessity in order to earn an income. Not necessarily because "we have a great investment and if you have the money you should buy some today". At virtually every training meeting and phone session I have attended, we were given some bond or stock to sell, that most of us didn't care about. If you have good fee based income coming in, would you be on the phone trying to sell what newbies through seg 2 are selling? I doubt it. We have an overbought bond market and a volitile stock market. yet, the necessity to earn a living has us soliciting business. And judging by how poorly our clients portfolios have done over the last 10 years, I have to question our motives and our practices.

OK, so the stock market is volatile, so we shouldn't be selling stocks (volatility usually means opportunity for teh intelligent investor).  And the bond market is overbought so we shouldn't be selling bonds (CDs at .2% are OBVIOUSLY better for the client).  And the 7% BAB that I was calling some of my best clients this morning isn't in their best interest because I have bills to pay and need to earn a living.  Does that just about sum up your existence at EDJ right now?  No wonder you're on here all the time complaining about EDJ.

"And judging by how poorly our clients portfolios have done over the last 10 years" - You using this comment makes me chuckle.  I thought you were a noob at EDJ.  How do you know how well our clients portfolios have done over the last 10 years?  Even in the much maligned CAIBX "our clients" would have averaged over 6%.  ITHAX is up over 3%.   ABNDX is up 5.25%  Now, I realize that's not the roaring 90's numbers, but it's a heck of a lot better than under your mattress.  And those are just three well know funds here at Jones.  I'm positive I can find better ones. 

Just so you know, the market has ZERO to do with you running your business and having to make transactions or collect fees.  It just happens that right now the market is down.  I could make a very valid argument that in 2007 you shouldn't have been calling on stocks and bonds either.  The market was obviously way too high and there were too many bonds at risk of default. 

Those are called excuses.  They're the manifestation of call reluctance. 

People NEED us right now.  If you can't see that, then you're making the correct choice by sending out your resume to companies outside this industry.  

The kool-ade is running pretty thick. "People need us"??? From what I've seen at jones, most people don't get what they are paying for. And you never mentioned the potential conflic of interest between your own financial needs and your clients investment needs. My experience at jones indicates that the bill collector trumps client needs through seg4.

hahahahah yep any service job that pays you based on performance is a conflict of interest.

hair stylist: need a haircut? i think you do. here let me cut your hair

navet: NO WAIT THATS A CONFLICT OF INTEREST YOU DONT NEED A HAIRCUT YET.

broker: still buying CD's at 1%? how about earning 7% with that very same money and actually beat inflation while paying less taxes.

navet: NO WAIT THATS  A CONFLICT OF INTEREST THEY'RE GETTING PAID FOR SELLING BONDS KEEP YOUR 1% CD ITS FDIC INSURED

yep, they don't need us. we're crooks. we should work for free. DIY'ing your retirement is the way to go.

wow just quit already

[quote=navet]

The conflict of interest I was talking about before is the conflict caused by our transactional business. We are on the phone soliciting business out of necessity in order to earn an income. Not necessarily because "we have a great investment and if you have the money you should buy some today". At virtually every training meeting and phone session I have attended, we were given some bond or stock to sell, that most of us didn't care about. If you have good fee based income coming in, would you be on the phone trying to sell what newbies through seg 2 are selling? I doubt it. We have an overbought bond market and a volitile stock market. yet, the necessity to earn a living has us soliciting business. And judging by how poorly our clients portfolios have done over the last 10 years, I have to question our motives and our practices.

[/quote]

this post is golden

still trying to "get hard" junior? Tell you what, work a little harder on analogies. You are young, stupid and don't have a pot to piss in or one to throw it out of. But people do depend on the "wisdom" of their FA, and have a right to understand the potential conflict of interest. Now if you are trying to tell me that a new seg 1 or 2 who's trying to make his rent, doesn't have this on his mind when he's making his recommendation, then you are truly full of, well, we all know what. In this business we start our desperately grasping for any assets we can find. And more than a few senior FA's have been known to churn, and I don't mean butter.

My dentist goes in to work every day to earn $___ after every cavity filled to pay his mortage CONFLICT OF INTEREST

My lawyer goes in to work every day to earn ___% of each settlement to pay his car payment CONFLICT OF INTEREST

___ goes in to work every day to earn ___ to pay ___ CONFLICT OF INTEREST

NONE OF THESE PEOPLE REALLY CARE ABOUT THE SERVICES OR PRODUCTS THEY'RE OFFERING!!! THEY JUST WANT TO MAKE $$$$$!!!

Navet, you're a tool

Isn't Navet sitting on a large pile of cash? Wouldn't this negate the conflict of interest he claims exists due to worrying about paying for living expenses?

Navet is making excuses for being too old and too dumb to make it in this industry. He hasn't put in the time nor the effort to understand a) what he's selling and b) the benefits of what he's selling. Case in point: Navet thinks premium bonds are crappy bonds. News flash: premium bonds pay more income and are less volatile to interest rate movements.

Navet, you're a tool

Lawyers chasing ambulances, dentists replacing good fillings. Thanks for making my point SOFTY.

[quote=gethardgetraw]

Navet is more ethical and responsible than all of us combined. Due to the large sum of money he's currently sitting on, Navet lacks any sort of conflict of interest seeing that he doesn't have to worry about putting food on the table and can therefore offer his clients what's best for their individual needs.

Navet, you're a tool

[/quote]

SOFTY, you made my point again. Do you try to be this stupid, or does it just come naturally?

One of his very first posts on these forums, making a great first impression:

[quote=navet] Me, a self indulgent whiner? You're the pussy who needs medication in order to handle the terrible stress of having a large book handed to you. What a fiasco, guaranteed income! It's so hard to make that money! I'll bet you were the kid who's mantra was, It's just not fair! The sad thing is that Jones rewards losers like you.Sadder still, they use you as some kind of example. [/quote]

On products he deems investment-worthy, although he can't sell anything due to the CONFLICT OF INTEREST :

[quote=navet] ... Advisory Solutions provides a level of diversity at a reasonable price. I have a wealthy client primarily in AF's. I would like to switch him to Adv Sol, or better yet to the MAP when they revamp it. It will give us the flexibility to use "best in class", low expense funds in a reasonably priced platform... 1% to 1.5% is a very reasonable amount to pay for that level of service. And having our managers manage other groups of funds adds a level of safety much needed in this post-Madoff time. [/quote]

On his sales' success:

[quote=navet] ... People don't buy company, they buy a good product... If you believe in and like the product you're selling, then the close is natural.... Needless to say, I close a lot of VA's. [/quote]

And my favorite:

[quote=navet] Just what I would be looking for. Some 20 something who doesn't know sh-t, calling me wasting my time. Go somewhere for 10 years and get some experience junior. The only money you're going to get is a few "I feel soory for the little prick" dollars. [/quote]

[quote=navet ]Experience talks and bulls--t walks. 20 somethings have NO BUSINESS in THIS BUSINESS!!! Go and learn a little about life juniors. If your daddy couldn't afford to pay for your college, and he's an FA, then he is too big a loser to learn from. Detach from the tit, and get on with your life.  [/quote]

[quote=navet] If you are all of 21-22 yrs old, then go somewhere and get some experience. Who in their right mind is going to trust their life savings to some kid fresh out of college? Join the Navy Supply Corps. See the world and get some responsibility. What kind of pussy gets a job with his daddy? Grow up junior. [/quote]

[quote=navet] When you meet with enough people junior, you become expert at recognizing bulls--t. Go back to your videogames. I hear your moms making mac'n'cheese tonight [/quote]

[quote=navet] (Navet referring to himself) ... these knees wouldn't allow me to door to door even if I was willing... this obviously not the place for me... it works for younger people...  [/quote]

Just found even more recent, classless Navet (the self-proclaimed millionaire) posts:

http://forums.registeredrep.com/forums/rr-newbie-members/fa-transition-law-school