Taking Stock: F Funds, First Hour Trading and flim-flam

Dear Mr. Berko: I work for Social Security and have their Thrift Savings Plan. I would like to transfer some of my money from the very conservative and guaranteed G Fund that just pays about 2.2 percent to the F Fund that pays 4.28 percent but isn't guaranteed even though the money is in bonds. I understand that the G Fund invests its money in U.S. Treasury bonds. But I do not understand how the F Fund can pay so much more and still be invested in bonds. I've emailed you a copy of the F Fund fact sheet which I don't understand and would appreciate your explanation and recommendation.

Also, my husband wants to know what you think of a short-term (in and out) trading program called First Hour Trading. He has $32,000 from a recent inheritance and would like to buy this program for $495 plus monthly fee of $75.00. He explained the trading concept to me and it seems so simple and easy to make a minimum of $500 to $700 every morning between 9:30 a.m. and 10:30 a.m. when the market opens. The genius who created the program is a chess prodigy and used his chess skills to design this stock program that picks stocks at the open of the market and tells you to sell them an hour later. This is very exciting and impressive. I know the old saying about things that sound too good to be true, but this seems to be an exception and I could quit my lousy job.

MM: Punta Gorda, Fla.

Dear MM: The imperious mentality of government bureaucrats who composed the following F Fund description is typical of the smelly bloviation and effluvia that cover almost everything in Washington. And I quote: ''The F Fund invests in the U.S. Debt Index Fund by purchasing shares of the U.S. Debt Index Fund ''E,'' which, in turn, holds shares of the U.S. Debt Index Master Fund. Interest income equaled 3.68 percent of the U.S. Aggregate Index. The average duration of the U.S. Aggregate Index was 4.36 years which means that a 1 percent increase (decrease) in interest rates could be expected to result in a 4.36 percent decrease (increase) in the price of a security.'' Cheese and crackers got all muddy MM, I have no idea what this bibacious language means. Still, the other bonds funds in this Thrift Savings Plan have done modestly well over the past decade and the F Funds should also perform moderately well over the long term, if interest rates remain stable.

Now this www.firsthourtradingsmart.com (FHT) is pure bosh and blatherskite, so tell your spouse to keep his inheritance dry though I'm certain I'd be wasting time telling you that FHT's boldly advertised results are impossible. In fact, every advertised stock market trading scheme or investing program that claims it can beat the market is the kind of flim-flam and humbug that would make Phineas T. Barnum proud. And because you so badly want this to be true, I know you're going swallow the hook regardless of what I tell you. But before you sign on the line, consider the following: (1) If FHT can make every investor a minimum of $500 to $700 every morning between 9:30 a.m. and 10:30 a.m. why do they spend so much money advertising on Sirius Radio and the print media? Wouldn't you think that word of mouth would sell FHT like hot cakes? (2) If one can easily earn an average of $500 every morning--which is over $100,000 a year--how come the Wall Street Journal, Barons, Business Week, Bloomberg, Fortune, Kiplinger, Time, Money Magazine or Investor's Business Daily have failed to report these amazing successes? Finally (3) if FHT performs as advertised, why don't money managers, bank trust departments, mutual funds, hedge funds professional stock traders, retirees who need extra income or investment advisers use this program across the country? And the answer is ... FHT isn't worth a cow patty. Give your boss 3 months' notice just in case.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at mjberko@ yahoo.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com

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Published: Thu, Jan 3, 2013