Hidden (Fees) in Plain Sight

More on the legalization of marijuana from a reader in Oregon:

“Our ‘elected’ representatives live in ignorance.

“If they [remove] politics, they could draw on thousands of years of medical and casual use in Asia for the truth!

“It’s all about ‘reefer madness.’”

You can look closer to home to find the use of marijuana.

Mexicans used the plant for centuries. As they settled in states like Texas and California, Mexicans continued the practice.

The head of the Federal Bureau of Narcotics, Harry J. Anslinger, took notice and saw a way to get idle Prohibition-era G-men back to work.

The first step on the road to marijuana prohibition was the Marihuana Tax Act of 1937 that FDR supported. The act didn’t outlaw marijuana’s use; instead, it put a heavy tax on anyone selling hemp, cannabis or marijuana.

Why hemp? Look no further than titans of industry DuPont, Mellon and Hearst. Hemp threatened their business interests.

As for marijuana, the American Medical Association opposed the act because it taxed physicians and pharmacists who regularly prescribed and sold cannabis.

Further, the AMA expressed doubts about fed claims marijuana led to addiction, violence and overdose.

Never mind that.

The Marihuana Act passed and the sordid myth of “reefer madness” was born, setting the stage for cannabis’ Schedule-I narcotic classification when Nixon was president.

As for when and if Trump will remove Attorney General Jeff Sessions, one reader says:

“Trump will get rid of Jeff Sessions after the November elections…There is too much going on right now with the Supreme Court nomination and the crap going on with Facebook, Twitter and the rest.”

All that aside, federal cannabis legalization would increase Trump’s chances at a second term. Sessions stands in the way. Even though Trump loves to hate him, Sessions might have to go before the next election.

Thanks for the feedback. We look forward to hearing from you.

Send your opinions to TheRundownFeedback@SevenFigurePublishing.com.

Your Rundown for Fri. September 7, 2018…

Hidden (Fees) in Plain Sight

One reason investing in mutual funds and ETFs is so attractive is the perception there are no hidden fees.

That’s not exactly true.

Sure, you’re not being nickel-and-dimed to death but you’re still paying for services. And rightly so — to a point.

The thing to be aware of is the fund’s expense ratio.

All mutual funds and ETFs charge shareholders to cover total annual operating costs.

Fund companies calculate “back office” expenses for things like portfolio management, marketing and trade executions.

The expense ratio, calculated by dividing operational expenses by average net assets, reduces the fund’s returns and the overall value of your investment.

If a fund’s assets are growing faster than annual expenses, that benefits the investor, yielding a lower expense ratio. The converse — lower assets, higher expenses — means the expense ratio is higher.

But because investors see the expense ratio as a percentage rather than dollars, it can be easy to overlook.

Here’s an example: In 2017, the average expense ratio for an actively-managed fund was 0.78. That means $78 of every $1,000 was earmarked for annual expenses.

Something else to keep in mind is the more complex the fund, the higher the expense ratio. An emerging markets fund is going to have more annual expenses than a straightforward U.S. stock fund.

So that’s the pay to play cost of mutual funds and ETFs, something often overlooked by investors. Keep in mind, brokerage fees are separate. And that’s a story for another day…

Market Rundown for Fri. September 7, 2018

S&P 500 futures are down 3.3 points to 2,874.71.

Oil’s down to $67.16 for a barrel of crude.

Gold’s down to $1,203.30.

Bitcoin’s holding steady from yesterday’s price at $6,457.84

Send your comments and questions to, TheRundownFeedback@SevenFigurePublishing.com.

Have a great weekend; we’ll catch up Monday.

For the Rundown,

Aaron Gentzler


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Aaron Gentzler is the publisher of Seven Figure Publishing. He is also the editor of The Rundown. Aaron’s been with Agora Financial/Seven Figure Publishing for 13 years. He's been covering technology and markets for over a decade.

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