“Historically, You Can Miss the Recovery in the Blink of an Eye,” Financial Advisor Says

DALLAS – October 13, 2008 – During a steep decline in the financial markets like the one Americans face currently, investors are tempted to make rash decisions. But pulling money out of the stock market during a downturn, and then missing the start of the recovery, can put a major dent in your finances over the long term, says Kennon Grose, president and chief executive officer of AssetBuilder, a Registered Investment Advisor that combines low-cost index funds with science-based diversification strategies.

“Historically, you can miss a recovery of the financial markets in the blink of any eye,” Grose says. “As an example, let’s look at the period from January 1980 to August 2008. If you held investments during this timeframe that reflected the major indices, you would have achieved a significant return.

“But if you had pulled your money outof the market during the best six individual months of this 28+ year period, you would have missed out on nearly half of the return. That’s right: six months, spread across three decades, is responsible for nearly half of the long-term return during this period.”

The percentage returns of four broad indices from January 1980 to August 2008 -- with and without the best six months -- are shown below:

Grose says this historical data demonstrates the wisdom of staying calm – and holding on to your investments -- during the current financial crisis.

“The global market decline has led to some extreme talk and behavior among pundits and investors. For example, Jim Cramer of CNBC has advised the public to sell stocks now if they will need any money in the next five years,” Grose says.

“In the face of such reaction, it’s important to understand that this market is not unique. We have had similarly steep declines before, most recently from 2000-2002. We have also had past credit scares. Recall Michael Milken and the junk bond era, or risky lending to REITs in the late ‘70s, or the S&L lending binge of the early ‘80s. In every previous instance, the market has recovered.”

About AssetBuilder

AssetBuilder offers weary investors a science-based alternative to the unnecessary costs, risks and complexity of traditional Wall Street firms. With fees that rank among the lowest in the financial services industry, AssetBuilder provides customers a menu of pre-constructed, risk-managed portfolios that make choosing and implementing a personal investment strategy simpler than ever. Co-founded by personal finance writer Scott Burns, AssetBuilder’s portfolios are an extension of Burns’ widely praised “Couch Potato” investing. Based in Dallas, AssetBuilder is a Registered Investment Advisor. For more information, visit the company’s Web site at http://www.assetbuilder.com/.

 — and How They Hurt InvestorsHype by Brokerages Has Made Investors Take on Too Much Risk and Pay Too Much in Fees, Says Financial Author Scott Burns

DALLAS – October 7, 2008 – Trust in big Wall Street firms is at an all-time low as a result of the current U.S. financial crisis. Scott Burns, chief investment strategist for AssetBuilder, says this development isn’t all bad – because individual investors will now think twice about buying into Wall Street’s prevailing financial planning myths.

"People are moving their money away from the major brokerage firms to smaller, independent advisors,” says Burns,  syndicated columnist and co-author of the book “Spend ‘Til the End: The Revolutionary Guide to Raising Your Living Standard – Today and When You Retire” (Simon & Schuster, 2008). “This means they will be exposed to less self-serving Wall Street hype – particularly when it comes to planning for retirement.”

Burns says Wall Street’s full-service brokers have led investors to take on too much risk and to pay too much in fees by propagating the following four retirement planning myths:

Myth 1: Fees don’t matter.

“Wall Street firms don’t want you to think about fees.  They want you to subscribe to the magical belief that costs don’t matter.  But they always matter,” Burns says.  “Investment expenses can be reduced by more than 2 percentage points a year in some cases, which can have a dramatic impact on your total return. Remember: Costs are constant. Performance is not.”

Myth 2:  Your investment earnings must replace 70 percent (or more) of your current income at retirement.

“Wall Street calls it your ‘retirement income replacement rate.’ It’s the percentage of your pre-retirement income you ‘need’ to sustain your standard of living in retirement,” Burns says. “I call it ‘replacement bait.’ The percentage is set so high that it pressures us to save an excessively large portion of our income – or to take on excessive risk in an attempt to reach unrealistic financial targets.”

Myth 3: Risk diminishes over time.

“People buy into the idea that risk diminishes, the longer your investment term.  It doesn’t,” Burns says.  “Your risk from holding stock, for example, depends on both the extent of your stock holdings and your spending behavior.  If your spend-down rate is too high, stocks will be riskier the longer you hold them.”

Myth 4: You should invest as much as possible, as early as possible.

“This is a great idea -- for the financial services industry.  But it is contrary to the way real life works for most people,” Burns says. “It’s understandable that Wall Street would want to start collecting fees and commissions on our savings for decades before our savings will do anything for us.   But we need to remind ourselves that our retirement savings are their lunch.  This doesn’t mean we don’t all need to save. It simply means saving a lot of money at the appropriate time.”  

Learn more about Burns’ ideas from “Spend ‘Til the End” on the AssetBuilder Web site.

About Scott Burns

Scott Burns is a newspaper columnist and author who has covered personal finance and investments for nearly 40 years. Today, he is one of the five most widely read personal finance writers in the country, according to The Dallas Morning News. In 2006, he co-founded AssetBuilder, a Registered Investment Advisor (RIA), where he serves as chief investment strategist.

Burns and Laurence J. Kotlikoff are co-authors of  “Spend ‘Til the End: The Revolutionary Guide to Raising Your Living Standard -- Today and When You Retire” (Simon & Schuster, June 2008) and of “The Coming Generational Storm: What You Need to Know About America's Economic Future” (MIT Press, 2004).

About AssetBuilder

AssetBuilder offers weary investors a science-based alternative to the unnecessary costs, risks and complexity of traditional Wall Street firms. With fees that rank among the lowest in the financial services industry, AssetBuilder provides customers a menu of pre-constructed, risk-managed portfolios that make choosing and implementing a personal investment strategy simpler than ever.  Co-founded by personal finance writer Scott Burns, AssetBuilder’s portfolios are an extension of Burns’ widely praised “Couch Potato” investing. Based in Dallas, AssetBuilder is a Registered Investment Advisor.  For more information, visit the company’s Web site at http://www.assetbuilder.com/.

We’re Not There Yet, Says AssetBuilder’s Scott Burns – But We Could Be Soon

DALLAS – July 18, 2008 – With the resale value of SUVs plummeting and some car dealers refusing to accept them in trade, Scott Burns, personal finance writer and chief investment strategist for AssetBuilder, poses the question: “Is it time to junk the SUV?”

For most people, Burns says, probably not.  But should fuel prices climb to $6 per gallon or more, it might be time to walk away from your gas guzzler.

“To determine if your SUV is worth junking,” Burns explains, “you should compare the cost per mile of feeding it gasoline to the cost per mile for fuel plus the cost per mile of the depreciation on a new vehicle.  Depreciation is the largest single cost, by far, of owning a car. The Junking Moment is when the new-car costs are less.”

Burns offers a hypothetical example:

“Let’s assume that a new car will lose about 80 percent of its value in the first 100,000 miles. That means a new $25,000 vehicle will lose $20,000 in 100,000 miles and cost about 20 cents a mile for depreciation. A $30,000 vehicle will cost about 24 cents a mile for depreciation, and a $40,000 vehicle will cost about 32 cents a mile for depreciation.

“To throw your gas guzzler away, you’d need to find a combination of new car depreciation and gas cost per mile that is less than the cost to run your SUV.”

Burns says this might be possible to find today – but not probable.

If your SUV gets 13 miles per gallon, it costs 31 cents per mile to drive it when gas prices are at $4 per gallon, Burn explains.  If you were to purchase a new car that gets 40 miles per gallon, the cost to drive that vehicle is 10 cents per mile.  That’s a difference of 21 cents per mile.

If you can find a new car that gets 40 miles per gallon for $25,000, it may be worth trashing your SUV, Burns says.  But that’s unlikely.

If gas goes up to $6 per gallon, however, it’s a different story.  Then even paying $40,000 for a fuel-efficient new car would be better than sticking with your SUV.

Read more of "Is It Time to Junk the SUV?" at www.AssetBuilder.com.

About Scott Burns

Scott Burns is a newspaper columnist and author who has covered personal finance and investments for nearly 40 years. Today, he is one of the five most widely read personal finance writers in the country, according to The Dallas Morning News. In 2006, he co-founded AssetBuilder, a Registered Investment Advisor, where he serves as chief investment strategist.
Burns and Laurence J. Kotlikoff are co-authors of “Spend Til' the End: The Revolutionary Guide to Raising Your Living Standard -- Today and When You Retire,” published in June 2008 by Simon & Schuster.

About AssetBuilder

AssetBuilder offers weary investors a science-based alternative to the unnecessary costs, risks and complexity of traditional Wall Street firms.  With fees that rank among the lowest in the financial services industry, AssetBuilder provides customers a menu of pre-constructed, risk-managed portfolios that make choosing and implementing a personal investment strategy simpler than ever.  Co-founded by personal finance writer Scott Burns, AssetBuilder’s portfolios are an extension of Burns’ widely praised “Couch Potato” methodology. Based in Dallas, AssetBuilder is a Registered Investment Advisor.  For more information, visit the company’s Web site at http://www.assetbuilder.com/.

AssetBuilder’s Chief Investment Strategist Dispels Wall Street Myths
 and Advocates Low-Cost Index Investing in “Spend ‘Til the End”

DALLAS – July 10, 2008 – Scott Burns, chief investment strategist for AssetBuilder, is earning national media attention and critical kudos for his new book on financial planning, “Spend Til' the End: The Revolutionary Guide to Raising Your Living Standard -- Today and When You Retire.”

Burns -- a personal finance columnist for the Dallas Morning News from 1985 to 2006 whose column is currently syndicated nationwide -- takes on Wall Street financial planning myths and offers alternative strategies in “Spend ‘Til the End,” co-authored by Laurence J. Kotlikoff and published by Simon & Schuster.

U.S. News & World Report writes of the book: “The conventional wisdom about retirement may be worth re-examining, say two financial-planning mavericks [who] systematically test and often debunk the collective wisdom of financial planners.”

Since the book’s release, Burns has appeared on radio broadcasts from coast to coast, in media markets such as New York, Los Angeles, Chicago, Boston, Denver and Seattle.  Burns, the book and/or AssetBuilder have also merited coverage in Kiplinger’s Personal Finance Magazine, NPR, the Fox Business Network and other media outlets.

Burns has taken a hands-on approach to helping investors since leaving the Dallas Morning News, co-founding AssetBuilder, a fast-growing Registered Investment Advisor that combines the use of low-cost index funds with research-based diversification strategies.  In just over a year in business, AssetBuilder has added more than 300 clients across 24 states, representing $124 million in invested assets.

"AssetBuilder issues a simple challenge to Wall Street: Prove that your stock pickers and mutual fund managers are worth the fees you charge for them. In most cases, they aren’t," Burns says. 

"We believe that real value is delivered not in trying to outperform the market, but in constructing portfolios that capitalize on the market’s long-term growth. That’s what AssetBuilder portfolios are built to do -- at lower cost and with lower risk than traditional financial services firms can deliver."

Adds Kennon S. Grose, AssetBuilder’s president and CEO: “Word is spreading about Scott and AssetBuilder, and the message is clearly resonating with investors. Together, we are on a journey – a mission to challenge Wall Street’s entrenched system of unnecessary costs, risks and complexity. We’re well on our way.”

About AssetBuilder

AssetBuilder offers weary investors a science-based alternative to the unnecessary costs, risks and complexity of traditional Wall Street firms.  With fees that rank among the lowest in the financial services industry, AssetBuilder provides customers a menu of pre-constructed, risk-managed portfolios that make choosing and implementing a personal investment strategy simpler than ever.  Co-founded by personal finance writer Scott Burns, AssetBuilder’s portfolios are an extension of Burns’ widely praised “Couch Potato” methodology. Based in Dallas, AssetBuilder is a Registered Investment Advisor.  For more information, visit the company’s Web site at http://www.assetbuilder.com/.

The Personal Finance Writer and AssetBuilder Chief Investment Strategist
Challenges Wall Street Conventional Wisdom in His New Book

DALLAS – July 8, 2008 – Scott Burns, chief investment strategist for the Plano-based investment firm AssetBuilder, will appear at the Borders bookstore at 10720 Preston Road in Dallas on Thursday, July 10, to sign copies of his new book, “Spend Til' the End: The Revolutionary Guide to Raising Your Living Standard -- Today and When You Retire.” The event runs from 7 p.m. to 8 p.m.

Burns -- a personal finance columnist for the Dallas Morning News from 1985 to 2006 whose column is currently syndicated nationwide -- takes on Wall Street financial planning myths and offers alternative strategies in “Spend ‘Til the End,” co-authored by Laurence J. Kotlikoff ad published by Simon & Schuster.

Burns has taken a hands-on approach to helping investors since leaving the Dallas Morning News, co-founding AssetBuilder, a fast-growing Registered Investment Advisor (RIA).  In just over a year in business, AssetBuilder has added more than 300 clients across 24 states, representing $124 million in invested assets.

About AssetBuilder

AssetBuilder offers weary investors a science-based alternative to the unnecessary costs, risks and complexity of traditional Wall Street firms.  With fees that rank among the lowest in the financial services industry, AssetBuilder provides customers a menu of pre-constructed, risk-managed portfolios that make choosing and implementing a personal investment strategy simpler than ever.  Co-founded by personal finance writer Scott Burns, AssetBuilder’s portfolios are an extension of Burns’ widely praised “Couch Potato” methodology. Based in Dallas, AssetBuilder is a Registered Investment Advisor.  For more information, visit the company’s Web site at http://www.assetbuilder.com/.

Wall Street Ad Campaigns Overlook the "Neglected Majority" of Americans Planning for Retirement, Says Financial Author Scott Burns

DALLAS – May 20, 2008 – If you are like the vast majority of Americans, most of your retirement income will not come from your financial assets.  But that doesn’t mean you can’t live well in retirement – if you recognize that there’s more to retirement planning than what’s in your investment portfolio.

"Wall Street ad campaigns and the financial media tend to focus on affluent families — the households for which the return on financial assets may be the single largest part of retirement income," says Scott Burns, chief investment strategist for AssetBuilder and co-author of the upcoming book "Spend Til' the End: The Revolutionary Guide to Raising Your Living Standard – Today and When You Retire" (Simon & Schuster, June 2008).

"Unfortunately, there is little discussion of the practical financial decisions that are far more important for most people – the neglected majority of those planning for retirement."

For most Americans, Burns explains, the virtual wealth of Social Security and/or corporate pensions is far larger than the potential returns of their investment portfolios. And for many, the value of home ownership and the options it offers presents more opportunities than all of their financial assets.

For these Americans – the vast majority of soon-to-be retirees – Burns offers the following three strategies for living well in retirement:

Strategy 1: Turn Your Home Equity into Income by Downsizing, Moving or Renting

More Americans are "house poor" than plain poor. Deciding to move to a smaller and less expensive house is one way to have an immediate impact on your cost of living.

Retirees can achieve even greater benefits by relocating from a high cost area to a low cost area. New Englanders can enjoy substantial cuts in their cost of living by moving to Florida just as residents of Michigan can benefit from a move to Nevada or Arizona. 

Retirees should also consider renting rather than owning.  It’s the logical extension of downsizing. Operating expenses are lower in apartment complexes than they are in single family homes or even condos. Also, the entirety of your home equity can be put to work to generate income.

Strategy 2: Delay Your Retirement and Draw Income Later – and Wisely

Retirement wasn’t a problem in the past because it seldom lasted very long. It is only a problem today because our life expectancies have increased but we’ve made no adjustment in how long we work. According to one exercise, if the length of our expected retirement was to be in the same proportion today as it was 50 years ago, the normal retirement age would now be 72.

Most people take Social Security benefits as early as possible. That’s exactly the opposite of what they should do. Delaying benefits, even at the cost of spending down investment accounts, will mean a higher lifetime standard of living. This is particularly true for married men with younger wives.

In addition to drawing benefits later, there can be major advantages to some unconventional draw downs of retirement accounts, particularly if future tax rates are higher. Most young people should choose Roth accounts over regular IRA accounts.

Strategy 3: Reduce Your Investment Risks and Expenses

Many retirees go from relatively low cost 401(k) plans to much higher cost managed plans when they retire. In fact, they should be going in the other direction, reducing costs because each percentage point saved increases their income. Investment expenses can be reduced by more than 2 percentage points a year for some retirees.

In addition to reducing investment expenses, retirees should take steps to reduce investment risk and increase their peace of mind.  For example, workers who retire without employer pensions face a lifetime of worrying about whether they will outlast their savings. They can increase their income and improve their savings’ survival odds by turning a portion of their savings into a life annuity.

Many retirees (and investment managers) don’t understand that taking more risks to get higher returns doesn’t automatically mean a higher lifetime income. In fact, it generally means the opposite. Unless retirees are willing to accept a lower spending rate today, they may achieve their highest lifetime spending power by reducing risk and investing in Treasury Inflation-Protected Securities (TIPS).

Concludes Burns: "Note that none of these decisions involves significant knowledge of investments or insight into the Federal Reserve. Indeed, the common theme of these decisions is that they are personal decisions that tend to reduce risk, not increase it.  They also give the majority of Americans the best chance to live well during retirement."

About Scott Burns

Scott Burns is a newspaper columnist and author who has covered personal finance and investments for nearly 40 years. Today, he is one of the five most widely read personal finance writers in the country, according to The Dallas Morning News. In 2006, he co-founded AssetBuilder, a Registered Investment Advisor (RIA), where he serves as chief investment strategist.

Burns and Laurence J. Kotlikoff are co-authors of the soon-to-be-published "Spend Til' the End: The Revolutionary Guide to Raising Your Living Standard — Today and When You Retire" (Simon & Schuster, June 2008) and of "The Coming Generational Storm: What You Need to Know About America's Economic Future" (MIT Press, 2004).

About AssetBuilder

AssetBuilder offers weary investors a science-based alternative to the unnecessary costs, risks and complexity of traditional Wall Street firms.  With fees that rank among the lowest in the financial services industry, AssetBuilder provides customers a menu of pre-constructed, risk-managed portfolios that make choosing and implementing a personal investment strategy simpler than ever.  Co-founded by personal finance writer Scott Burns, AssetBuilder’s portfolios are an extension of Burns’ widely praised "Couch Potato" methodology. Based in Dallas, AssetBuilder is a Registered Investment Advisor.  For more information, visit the company’s Web site at http://www.assetbuilder.com/.

"Today, the net worth of the U.S. can be purchased for 498 billion barrels – the combined reserves of Saudi Arabia, Iraq and Iran," says AssetBuilder’s Scott Burns

DALLAS – May 9, 2008 –  Scott Burns, chief investment strategist for AssetBuilder and one of America’s best-read personal finance columnists, said today that America’s net worth is at its lowest point in decades and shows no signs of making a comeback – as measured in barrels of oil.

"When we asked, ’How much is that in dollars?’ we usually liked the answer," Burns writes in his column appearing May 11 in newspapers nationwide. "But it may be time to ask another question: ’How much is that in barrels of oil?’… That’s when the world starts to look very different. It also looks more than a little scary."

Burns’ methodology was to measure the net worth of all American households and non-profit organizations, using Federal Reserve estimates of the value of our collective tangible assets, financial assets and liabilities to arrive at our net worth.  At the end of 2007, America’s collective net worth was $57.7 trillion; divide this by the $120-a-barrel price of oil and you get 481 billion barrels of oil as the value of America.

This compares to values of 1,145 billion barrels in 2004, 1,897 billion in 1995, 1,112 billion in 1990, and 1,075 billion in 1970.

Explains Burns:  "At about 36 times its 1970 price, oil has outstripped the value created by a full working generation of Americans in a period of dramatic technological change and innovation. During the same time, the value of American business shares, as measured by the S&P 500 index, has risen to only 15 times its 1970 level.

"I find that hard to believe. After all, in 1970 the Internet was only an arcane toy for academics. The computer chip had yet to be invented. Computer memory was desperately expensive. Intel had just been formed and was introducing the first dynamic random access memory chip. Bill Gates had yet to enter (or drop out of) Harvard and was 5 years from founding Microsoft. Steve Jobs was years away from creating the Apple II. He was decades from launching the iPhone … Google founders Page and Brin had not yet been conceived, let alone applied to Stanford where they would create Google."

"All of that dynamism and creation simply pales against the price of oil."

Read more of "The Value of America, in Barrels" at www.AssetBuilder.com/blogs.

About Scott Burns

Scott Burns is a newspaper columnist and author who has covered personal finance and investments for nearly 40 years. Today, he is one of the five most widely read personal finance writers in the country, according to The Dallas Morning News. In 2006, he co-founded AssetBuilder, a Registered Investment Advisor (RIA), where he serves as chief investment strategist.

Burns and Laurence J. Kotlikoff are co-authors of the soon-to-be-published Spend Til’ the End: The Revolutionary Guide to Raising Your Living Standard – Today and When You Retire (Simon & Schuster, June 2008).

About AssetBuilder

AssetBuilder offers weary investors a science-based alternative to the unnecessary costs, risks and complexity of traditional Wall Street firms.  With fees that rank among the lowest in the financial services industry, AssetBuilder provides customers a menu of pre-constructed, risk-managed portfolios that make choosing and implementing a personal investment strategy simpler than ever.  Co-founded by personal finance writer Scott Burns, AssetBuilder’s portfolios are an extension of Burns’ widely praised "Couch Potato" methodology. Based in Dallas, AssetBuilder is a Registered Investment Advisor.  For more information, visit the company’s Web site at http://assetbuilder.com.

“The positive side of the current pain,” Burns says, is that “we’re watching the deleveraging of finance”

DALLAS – April 2, 2008 –  Scott Burns, chief investment strategist for AssetBuilder and one of America’s best-read personal finance columnists, says that investors concerned about the ongoing mortgage crisis can take comfort in the fact that while they will be “bruised” by the current market downturn, those responsible will be “buried.”

“Let’s consider the positive side of the current pain.  Bear Stearns is gone … So are many mortgage brokers, investment firms that leveraged mortgages, hedge funds that borrowed heavily ... Good riddance,” Burns writes in a recent syndicated column entitled “The Last Bubble.”

“What we’re watching is the deleveraging of finance … We’ll change our behavior to avoid future bruising. We won’t rely on our houses to substitute for real saving. Millions have learned not to trust lenders and brokers offering great investment opportunities. That’s a good thing. We’ll borrow less. We’ll pay off debt sooner.

“Over time, we’ll liberate much of the money wasted on interest payments …When we’ve done that, our dollars will be stronger,” he adds.

Flight to Safety Not So Safe

Burns notes that while many investors are moving their money to U.S. Treasury obligations, this “flight to safety” is not so safe when it comes to retaining purchasing power.

“Unless inflation slows sharply in the next year, T-bill investors are flocking to an opportunity to lose purchasing power. And that’s before taxes on the piddling yield they will receive ...When investors are willing to accept certain losses on Treasury obligations, expectations for other investments have to be really grim,” Burns says.

He warns long-term investors, however, that retreating to cash may prevent you from taking advantage of a market recovery.

“Will those who went to cash know when to buy again?” Burns asks. “The answer from history is ‘probably not.’ Most will be too scared to reinvest.”

Read more of Scott Burns’ column, “The Last Bubble.”

About Scott Burns

Scott Burns is a newspaper columnist and author who has covered personal finance and investments for nearly 40 years. Today, he is one of the five most widely read personal finance writers in the country, according to The Dallas Morning News. In 2006, he co-founded AssetBuilder, a Registered Investment Advisor (RIA), where he serves as chief investment strategist.

Burns and Laurence J. Kotlikoff are co-authors of the soon-to-be-published Spend Til’ the End: The Revolutionary Guide to Raising Your Living Standard – Today and When You Retire (Simon & Schuster, June 2008) and of The Coming Generational Storm: What You Need to Know About America’s Economic Future (MIT Press, 2004).

About AssetBuilder

AssetBuilder offers weary investors a science-based alternative to the unnecessary costs, risks and complexity of traditional Wall Street firms.  With fees that rank among the lowest in the financial services industry, AssetBuilder provides customers a menu of pre-constructed, risk-managed portfolios that make choosing and implementing a personal investment strategy simpler than ever.  Co-founded by personal finance writer Scott Burns, AssetBuilder’s portfolios are an extension of Burns’ widely praised “Couch Potato” methodology. Based in Dallas, AssetBuilder is a Registered Investment Advisor.  For more information, visit the company’s Web site at http://www.edrugsearch.com/edsblog.

New Federal Financial Authority would rate the quality of securities
in the same way the FDA rates food and drugs

DALLAS – March 28, 2008 –  Scott Burns, chief investment strategist for AssetBuilder and one of America’s best-read financial columnists, and Laurence J. Kotlikoff, Boston University economics professor and author, recommend in a column to be published Sunday that the U.S. government establish a Federal Financial Authority to rate securities – effectively placing warning labels on high-risk investments.

Burns and Kotlikoff lay much of the blame for the subprime mortgage crisis at the feet of credit rating agencies such as Moody’s and Standard & Poors, which granted asset-backed securities higher ratings than they deserved. The authors say the agencies, whose fees are paid by borrowers, acted in their own self-interest in a practice they call “insider rating.”

“The credit crisis has lots of fathers. But the ‘See No Evil, Hear No Evil, Speak No Evil’ practice of the rating companies has the closest-matching DNA. Like Enron's accountants, the rating agencies knew where their bread was buttered. Now we have trillions of dollars of securities that no one is willing to touch,” Burns and Kotlikoff write in a Universal Press Syndicate column to be published March 30 by newspapers nationwide.

“We need to put an end to insider rating. Federal Reserve Chairman Ben Bernanke should call for the establishment of an FFA -- a Federal Financial Authority.”

The Federal Financial Authority: An FDA for Financial Securities

Among its responsibilities, the FFA would rate the quality of financial securities similarly to how the FDA is mandated to regulate food and drugs, Burns and Kotlikoff said.

“[The FFA] would place warning labels on subprime mortgages and securities derived from them. The FFA would also rate the safety of investment banks, insurance companies, hedge funds and commercial banks…,” the authors propose.

“Wall Street risk-taking has put all of us on a knife edge between asset collapse and rampant inflation … The first step toward a long-term solution is to establish the Federal Financial Authority and restore the credibility of our rating system.”

Dallas-Based AssetBuilder Offers Low-Cost, Risk-Managed Index Investing Through Pre-Constructed Portfolios Grounded in Financial Science

DALLAS – February 20, 2008 – Nationally syndicated personal finance writer Scott Burns has long been skeptical of Wall Street’s high-priced stock pickers and fund managers. Burns developed the widely praised “Couch Potato Portfolio” to demonstrate that diversified index investing could be just as effective as managed-fund investing over the long term – with less risk and at far lower cost.

Now Burns is teaming with former Microsoft executive Kennon Grose to extend his low-cost investing approach to the Web – with a startup called AssetBuilder that enables investors with nest eggs starting at $50,000 to select from pre-constructed portfolios and pay annual fees as low as 25 basis points.

The Registered Investment Advisor (RIA) has attracted more than $75 million in assets under management since its launch in April 2007 -- and is growing rapidly.
“AssetBuilder issues a simple challenge to Wall Street: Prove that your stock pickers and mutual fund managers are worth the fees you charge for them. In most cases, they aren’t," says Burns, the firm’s chief investment strategist.
"We believe that real value is delivered not in trying to outperform the market, but in constructing portfolios that capitalize on the market’s long-term return. That’s what AssetBuilder portfolios are built to do."
Adds Grose, the company’s president and CEO: “Through AssetBuilder, we’ve wedded low-cost index investing with a Web-based service platform to create a uniquely cost-efficient option for investors. We make choosing and implementing a personal investment strategy simpler and more affordable than ever.”

How Does AssetBuilder Do It?

Burns unveiled the original “Couch Potato Portfolio” in 1987. The strategy was to combine index investing with asset allocation to create an “all-weather portfolio” that would minimize risk, cost and complexity for the mainstream investor. Burns ultimately developed a family of portfolios based on investor risk tolerance and other factors.
Extending Burns’ “Couch Potato” philosophy, AssetBuilder combines enhanced index investing with risk-reducing diversification strategies. Investors select online from a menu of pre-constructed portfolios grounded in Nobel Prize-winning financial science. The company’s portfolios feature funds from Dimensional Fund Advisors (DFA), the leader in applying Modern Portfolio Theory to design “smart” index funds and limit trading costs.
AssetBuilder’s fees are among the lowest in the financial services industry. The company charges clients between 0.25 and 0.45 of one percent of assets under management annually. This compares to an average fee of about one percent among RIAs, and the much higher fees and commissions charged by traditional brokers.

“Brokerage houses and other legacy financial services companies have become hopelessly outdated – although they don’t seem to realize it yet,” Burns says. “They will have to change their pricing models dramatically if they are to survive the challenge that a company like AssetBuilder presents.”

AssetBuilder’s Origins – and Future

In late 2006, Burns retired from The Dallas Morning News after more than 20 years at the newspaper. Upon making his decision, Burns had dinner with Grose, a longtime friend. The two men brainstormed the idea for a new kind of investment firm – one that would wed Burns’ common-sense approach to investing with a low-cost, Web-based service platform.

“AssetBuilder’s clients are weary investors seeking an alternative to Wall Street’s games,” Burns says. “They are tired of watching fund managers attempt to outperform the market and each other -- because it’s the investor who ultimately absorbs the risks and costs of these games.”

Grose adds: “Our business model has many in the industry calling us the low-cost provider. The reality is, we are disrupting an entire system rife with overpriced services, unnecessary risk, and burdensome complexity. Our success has already influenced other RIAs to lower their management fees and focus on diversification. This is just the beginning of AssetBuilder’s impact.”

About AssetBuilder

AssetBuilder offers weary investors a science-based alternative to the unnecessary costs, risks and complexity of traditional Wall Street firms. With fees that rank among the lowest in the financial services industry, AssetBuilder provides customers a menu of pre-constructed, risk-managed portfolios that make choosing and implementing a personal investment strategy simpler than ever. Co-founded by personal finance writer Scott Burns, AssetBuilder’s portfolios are an extension of Burns’ widely praised “Couch Potato” methodology. Based in Dallas, AssetBuilder is a Registered Investment Advisor. For more information, visit the company’s Web site at www.AssetBuilder.com.