Investing

It's strange how "scandal" gets defined these days in Washington. At the moment, everyone is screaming about the "scandal" of the Internal Revenue Service scrutinizing conservative nonprofits before granting them tax-exempt status. Here are the genuine scandals in this affair: Political organizations are being allowed to masquerade as charities to avoid taxes and keep their donors secret, and the IRS has allowed them to do this for years. The bottom line first: The IRS hasn't done nearly enough over the years to rein in the subversion of the tax law by political groups claiming a tax exemption that is not legally permitted for campaign activity.

WASHINGTON - The nation's sluggish recovery can't seem to catch a break. Persistent federal spending cuts and a slowdown in business investments thwarted hopes for stronger economic growth in the first quarter, setting up more modest gains in jobs and income into the summer. The U.S. economy expanded at an annual rate of 2.5% in the first three months of the year, the Commerce Department reported Friday. That was a big improvement from the measly 0.4% increase in the fourth quarter, when deep defense cuts and smaller stockpiling by companies slashed growth.

In these troubled economic times, it's not hard to understand why people might want to protect their life savings by purchasing a hard asset like gold or silver. At least, that's the pitch of Monex, the big Newport Beach investment firm, which bills itself as "America's trusted name in precious metals investments" and assures clients that it's "committed to customer service. " So let's take a look at the experiences of some customers who say their trust in Monex was misplaced.

Dear Liz: You always mention fee-only financial planners and I'm not sure about the true meaning. My husband and I have a financial planner who charges us $2,200 per year, but we got a summary of transaction fees in the amount of $6,200 for last year. Is this reasonable? We have $625,000 in IRAs and are adding $1,000 a month. In addition we have over $700,000 with current employers, adding the max allowed yearly. The planner gives advice on allocations for these employer funds as well.

If you've been trying to find a place to invest your money and are feeling uneasy with U.S. stocks and bonds, consider looking overseas. You should know that an increasing number of experts are encouraging clients to boost their holdings in international currencies -- a once-rarefied market that's become more accessible to individual investors. The reason they're pushing foreign currencies is simple. Rising U.S. government debt levels suggest future inflation and continuing devaluation of the dollar.

Typically at year's end, when investors assess their portfolio winners and losers, they can look back and identify the smart decisions they made during the last 12 months -- and the moves they'd love to rescind. This year, many people may figure that the only thing they learned about investing was the value of inertia: just doing nothing and hoping for the best. It's true that the only way you could have screwed up monumentally in 2009 was by bailing out of stock and bond markets and staying out. Barring some unforeseen calamity between now and Dec. 31, the vast majority of stock mutual funds, and many bond funds, will record hefty double-digit returns for the year.

The massive economic stimulus package that Congress passed last year included $7.2 billion to promote the spread of high-speed Internet connections in the United States. We can quibble over whether those funds helped stimulate the economy -- it took almost a year for the federal government to approve the first grant requests -- but not about the long-term value of the investment. The proof of that is in the two grants recently awarded to California, which aim to narrow the gap between the digital haves and have-nots.

Articles on the basics of investing, interactive forms, quizzes and Kathy M. Kristof's "Investing 101" series are available at the Los Angeles Times Web site at http://www.latimes.com/invest101. Also available are recent columns from the Business section's Wall Street, California, pages and other financial information. Point your browser to http://www.latimes.com/ HOME/NEWS/WALLSTCA/

An Orange County businessman has been indicted by a federal grand jury on charges of defrauding dozens of doctors and dentists out of money to fund his own powerboats, luxury cars and stock in the Green Bay Packers. David Rose, 56, of Coto de Caza, was indicted Wednesday in Santa Ana on multiple counts of mail and wire fraud. A federal warrant for his arrest was issued. FBI spokesman Laura Eimiller said the agency has been informed that he is traveling in Asia. Rose is accused of running two schemes beginning in March 2005, using companies called M.D. Venture Partners LP and Technology Innovation Partners LP. He solicited physicians to invest in MDVP and falsely represented lucrative investment opportunities in emerging medical technologies, according to the indictment.

Carnival Cruise Lines will spend up to $300 million to add an extra generator in each ship and improve fire suppression systems in response to the high-profile malfunctions that hobbled the Carnival Triumph cruise ship earlier this year. Carnival's image was badly tarnished when an engine fire in February cut most of the power to the Triumph, which had to be towed from the Gulf of Mexico to shore while passengers contended with a lack of hot food, bathrooms, air conditioning and elevators.

SHENZHEN, China - The dozens of business officials who accompanied Gov. Jerry Brown to China this week included many with existing business in the country, some who hoped the governor's presence could help open new doors for them and others who wanted to spend time with California's leader and his entourage. For Bill Allen, president of the Los Angeles County Economic Development Corp., the connection to China is more personal. Allen, son of "Tonight Show" founder Steve Allen and actress Jayne Meadows, was returning to a nation where his family's roots date to the turn of the 20th century.

Serial tech investor Ashton Kutcher is backing the Hunt, a fashion start-up that makes social media photos on sites such as Pinterest and Instagram "shoppable. " The San Francisco company was created to help consumers find clothing, jewelry and other items seen in images shared on blogs, photo apps and social media platforms. It calls itself a community-driven online shopping experience. The Hunt , founded by Tim Weingarten and Simon Peck, launched in January; since then, it has grown to 1 million monthly unique visitors.

Los Angeles mayoral candidate Wendy Greuel said Monday that she would seek an extra $175 million in savings from the city's budget by using such strategies as cutting the City Council's discretionary funds and changing the investment practices of its employee retirement systems. Appearing with several business leaders, Greuel said her budget plan would generate $60 million in savings per year by reducing the size of public employee health benefits and workers' compensation outlays by 10%. Another $40 million could be found, she said, by modifying the way the city's pension boards invest and cutting the amount they spend on consultants.

Ernie Schneider, the chief administrative officer of Orange County when it declared bankruptcy in 1994 because of its disastrous investment practices, died Saturday at his home in San Juan Capistrano. He was 66. His death, related to liver and kidney problems, was confirmed by former wife and current Laguna Beach City Councilwoman Elizabeth Pearson. A longtime public servant, Schneider was the top appointed officer when Treasurer Robert L. Citron was discovered to have lost $1.64 billion in the value of the county's investment portfolio.

BEIJING -- Gov. Jerry Brown went to the American Embassy on Wednesday to celebrate a new $1.5-billion investment from a Chinese developer in a massive new Oakland waterfront housing project. The single deal amounts to roughly the total of all Chinese investment in California companies and projects from 2001 to 2011, according to a study commissioned by the Asia Society. It also helps Brown illustrate to Californians why he is in China. Gubernatorial travels often have a subtext, and Brown's trip is no exception.

New homes are rarely perfect. Houses are giant puzzles with hundreds of parts, manufactured at different locations and carried to the building site. And try as they might to put together a flawless product, builders and their numerous subcontractors don't always get things right. Luckily, buyers are more likely to have to deal with cosmetic defects than out-and-out structural failures. Scratched refrigerators, broken bathroom tiles and faulty electrical outlets are far more prevalent than badly cracked foundations or sagging roofs.