Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, June 5, 1995 TAG: 9506060012
SECTION: MONEY PAGE: A-8 EDITION: METRO
SOURCE: MAG POFF
DATELINE: LENGTH: Long
One of them, Century Shares Trust, had 51 percent unrealized net capital gains in its last annual report. That means it has capital gains in stocks which it has not yet sold. Evergreen, on the other hand, has zero unrealized net capital gains. Which one should I invest in?
A: Peter Milward, manager of the Roanoke branch of J.C. Bradford & Co., said you should choose a mutual fund on the basis of its total return over a period of time. Do not select a fund on the basis of its status as to capital gains, he said.
If, however, you assume that both have performed equally well, he would invest in the stock that has no pending capital gains. The fund with pending capital gains must realize those gains in the near future, he said, and the tax liability will flow through to the shareholders. That will mean higher taxes for you, Milward said. It should have no influence on the share price.
How to find, choose financial planner
Q: How does a "non-business" person learn what to do with her income? I've been told to seek a financial planner, but how does one go about finding and choosing a financial planner to explain and assist with money decisions regarding savings, investments and preparing for the future?
A: There are basically two types of financial planners.
One category covers fee-only financial planners. You pay these planners, and they work for you rather than as agents of a company offering investment products. Their recommendations, therefore, are presumed to be not based on commissions. But the advice is not cheap. You can expect to be charged $90 to $125 an hour for the services of an experienced fee-only financial planner. This is a fee that many people cannot afford, especially when they are young.
Other planners work on a commission basis. And while their advice often is sound, you run the risk that the planner's recommendations will be influenced by the size of the commission rather than on the type of investment that is best for you. A planner working for an insurance company is more likely to recommend insurance-related investments, while one who is employed by a securities broker is apt to lean toward stocks and bonds, for example.
The size of the planner's commission is important because you must pay that amount of money up front, giving up future return on that money in addition to the fee.
Financial planners are listed in the telephone directory's advertising pages under that category. You would be wise to interview many people, but be certain that the person you choose holds the designation of certified financial planner. Not all of them have earned this certification.
An even better idea is to educate yourself about money and investments. Read publications, such as Money magazine, along with investment books, many of which are available at public libraries. You can learn to handle your own investments. This constitutes only one aspect of financial planning, but it is the most important factor to most people. You could see a certified financial planner for specific problems, such as proper handling of a rollover from a pension plan.
Tracking down mortgage company
Q: My parents had the mortgage on their house with Magic City Mortgage Co., and they paid it off in full before they died. Now I have inherited the house, thinking it was free and clear, and I am trying to get an equity line on it. I have discovered that Magic City Mortgage never marked the mortgage paid, so it is still outstanding. I have called a lot of banks in town, trying to find out who acquired Magic City Mortgage, but nobody remembers it. I don't know where to turn.
A: The Virginia Corporation Commission had no record of such a corporation existing in Virginia, but Bill Rakes, president of Southwest Virginia Savings Bank, has a long and good memory of the history of thrifts in the valley.
He said Magic City Mortgage Co. and Home Building and Loan Association were related corporations as a mortgage company and a thrift. Magic City, he said, was one of the first mortgage writers in the valley to sell its loans on the secondary market, so almost surely your loan was sold to another company, probably one that's based outside the state.
Those two entities were acquired by Jefferson Savings and Loan Association of Warrenton when it moved to the Roanoke Valley, Rakes said. Jefferson subsequently sold the Roanoke Valley branches to Investors Savings Bank of Richmond.
Investors failed and was taken over by the federal government. Rakes said Jefferson Savings Bank still exists in Warrenton but is in the final stages of being acquired by Crestar Bank.
Jefferson (or now Crestar) might still have those records, but the chance is remote if the loan was sold on the secondary market to another mortgage lender.
You should go through your parents' papers to see if you can determine the company to whom they made their mortgage payments.
See if you can find records that the loan was paid off, including a copy of the note stamped paid and perhaps a certificate of satisfaction. Try to file these papers with the clerk of court yourself. They should be sufficient proof that the loan was satisfied.
If you are unsuccessful, take your parents' complete mortgage file to a lawyer to determine your legal remedies.
by CNB