Voices of the Clarion: Translating finance lingo

Saving for future impossible unless you speak investmentese

Posted: Sunday, February 20, 2005

With Social Security nearly gutted, health care costs skyrocketing and a pack of rabid seadonkeys poised to take over the earth (don't say I didn't warn you) it is becoming increasingly important to save for the future.

Or so I've been told. Personally, I'm more comfortable with the piggy-bank-under-the-bed method of savings, but I went to a 401(K) workshop once where the guy had a Power Point presentation and numerous handouts illustrating the fact that piggy banks were bad and investments were good.

I left with the impression that I would die cold, toothless and alone with nothing but a threadbare flannel shirt and an imaginary friend named Stu if I didn't start investing now. So I am. Don't ask me what I'm investing in, though, because I have no idea. I get account updates in the mail, but I usually hold them at a safe distance in front of me until I can dump them in an appropriate location, kind of like I do with paper towels after I clean up one of my cat's hairballs.

I tried looking at a statement once, but it said things like "convertible bonds and debentures" and "Struct Sm Cap Val Tr." There was an amount of money listed, but for all I knew it could be going to support the worldwide comeback tour of Milli Vanilli.

I was getting frustrated trying to make sense of the jumble of figures and financial phrases until I saw something that put my mind to ease: pie charts. And not just any pie charts, mind you —3-D pie charts. Once I started picturing my investments in terms of apple, banana cream, rhubarb and chocolate, I felt pretty good about my financial status.

Maybe I wouldn't have to revert to dessert aversion therapy if I could understand what the fund profiles mean, but they might as well be in a foreign language for all the sense they make to me.

To be fair, though, I'm not good with languages either. I took a few years of Spanish in high school and another two semesters in college and all I remember is "Donde esta el bano?" (Where is the bathroom?), "no muerto" (I'm not dead) and a few words from a very enthusiastic song my former folk singer/high school Spanish teacher made the class sing — the key words here being "enthusiastic" and "made."

It went like this : "Deeeeeee colores. De colores something something something something primavera. Ya-ha!"

Which roughly translates to : "Theeeeeee colors. The colors something something something something of spring. Ya-ha!"

So I'm not surprised I'm having trouble wading through investment lingo. But in my defense, I've seen seedy bar bathroom graffiti that made more sense than this stuff.

For instance, some of my investing options include:

Stable value trust: "(This fund) seeks the preservation of principal and interest income reasonably obtained under prevailing market conditions and rates, consistent with seeking to maintain required liquidity."

The first part about preserving principal under prevailing market conditions kind of sounds like English. Is that like saving money with a two-for-one deal on Cheez Whiz at the supermarket?

I'm lost on liquidity. I'm not sure that's even a word. And what exactly is being required of the liquidity? Sometimes when the milk gets really old in my fridge it chunks up and thus no longer maintains the liquidity I require for my cereal. Is it something like that? If so, I want no part of it. Nothing ruins a bowl of generic-brand Cheerios like globs of rancid milk sludge.

Or I could choose this one:

Utilities: "The fund normally invests at least 80 percent of assets in equity securities of public-utility companies. These include companies that provide telephone, telegraph, satellite, microwave and other communication services ... ."

Wait a minute. Did that say telegraph? Are they serious? Wasn't the telegraph invented about 150 years ago? Can't they find any technology a little more current than that to stake my capital liquidity on? At least go for this century, please. The rotary phone would be an improvement, or perhaps they should look at the computer. I hear that's got some potential.

Financial note to self: Don't invest money in things that were invented longer ago than the time it takes a Twinkie to decompose. This means the Horse and Buggy Security Fund is out, as well as Two-Cans-And-A-String Trust and Dick Clark Mutual Bonds.

I've been told investing options range from conservative — a glorified bank account that won't lose much money but probably won't gain much, either; to midrange aggressive in making money — like stopping at a pull tab parlor every Friday on the way home from work; to all-out money-grubbing — like a guy betting his kid's college tuition on a horse named "Skeet" because that was his nickname in high school.

Why can't investment companies write profiles an average person can understand? If companies could equate fund profiles to other areas of expertise, then everyone could invest with ease.

For instance, investment portfolios sent to single women could read like personal ads:

A conservative, low-risk yet low-yield fund could read like this: "Middle-aged male seeks companion to sit on the couch and watch 'Seinfeld' reruns with. Enjoys delivery pizza, Monster Truck rallies and beer in cans."

A mid-risk fund might say something like this: "Sensitive, compassionate man seeks soul mate for candlelight dinners, long walks on the beach and good conversation. Loves poetry, animals and watching the stars. Still lives with his mother, so no calls after 9 p.m., please.

A high-risk investment could be listed as: "Hey baby. Looking for the man of your dreams? Look no further than my Corvette and six-pack abs. Hot chicks only. Got a friend? Bring her along."

For guys, portfolios could be listed in sports lingo like lineups of baseball teams.

There could even be a portfolio listing for former folk singers/high school Spanish teachers:

"Thiiiiiiis fund. This fund will do this and this and this and this this year. Ya-ha!"

Jenny Neyman is the design and copy editor for the Peninsula Clarion.

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