January 28, 2004

Finance Faculty Featured in
Local Supplement on Money Matters

Several Department of Finance faculty were busy in January commenting for an annual supplement to the Champaign-Urbana News-Gazette entitled "Money Matters."

Kevin Waspi, a lecturer, was featured in the personal investment strategies story. Waspi noted that his investment approach tends not to vary much from year to year. "I like to own stocks for the long term," he commented. "I think one of the ways a person builds wealth over time is by owning things, and one of the easiest ways to own things is to own shares of companies."

Scott Weisbenner, an assistant professor, was interviewed for an article on international investments. He counseled a balanced approach, making international investments only part of a portfolio. "When you're investing in the overseas funds, you're also investing in the currency," he said.

Dave Whitford, associate professor, explained the general impact of a depreciating dollar on international investments. "It works exactly the opposite of tourism," he said.

George Pennacchi, professor of finance, and Jeffrey Brown, assistant professor of finance, commented for an article on pension plans. Pennacchi advised readers to contribute the maximum amount to their retirement funds or to work their way up to the maximum as soon as possible. Brown counseled retirement diversification by not owning too much company stock.

Another team -- Scott Weisbenner, an assistant professor, and David Ikenberry, professor and department chair -- contributed to an article with general investment advice. Ikenberry cautioned that investors should not expect returns that were seen in the recent past. "Forty-five to 47 percent returns just don't happen on a regular basis," he commented. Weisbenner recommended an annual review of your portfolio, wise advise that is frequently ignored according to a recent study. He agreed with Brown about limiting owneship of company stock.

Ikenberry also commented for an article on investing in mutual funds. He suggested a four-part strategy for mutual fund investors:

• research funds on various websites that compare funds (Yahoo Financial, for example)
• read about different funds in business libraries or talk to a financial adviser
• determine your personal risk (younger investors generally can invest in more risky assets than an older investor)
• learn about the fee structure and determine potential returns with the fees factored in

The special supplement is not available online.