What the experts say

Fidelity’s Magellan fund is back, Money grown on trees, It’s tax-scam season

Fidelity’s Magellan fund is back

Fidelity’s flagship fund, Magellan, recently reopened to new investors, said Penelope Wang in Money. The fund, which has been closed to new investors since 1997, was once the envy of the industry. In 2000 its assets swelled to $102 billion. Then, “after years of mediocre returns under index-hugging former manager Robert Stansky, assets dwindled, as impatient shareholders bailed out and 401(k) plans dropped Magellan from their fund menus.” In 2005 Fidelity finally handed the reigns to Harry Lange, “a growth-style go-anywhere investor reminiscent of famed Magellan manager Peter Lynch.” Lange has since revamped the portfolio, and “so far, the results are encouraging.” In 2007 the fund was up 18.8 percent. Expect Magellan to be more volatile under Lange’s leadership, according to Morningstar analyst Dan Lefkovitz. “But there’s also more potential for better returns.”

Money grown on trees

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Many institutional investors invest in timberland to protect themselves from market swings, said Lewis Braham in BusinessWeek. They often earn double-digit gains to boot. “But timberland has been mostly off-limits to individual investors, because it requires millions of dollars to buy in.” Now exchange-traded funds such as the Claymore/Clear Global Timber Index let people with more limited means invest in companies with heavy exposure to timberland. Not only does timberland march to a different beat than the stock market, it’s also relatively cheap. The Claymore/Clear Index’s price-to-book value is just 60 percent of that of the average U.S. stock. Demand for packaging, paper, and lumber should keep timber prices hardy. But even if prices fall, timber has a built-in safety net: “Tree farmers can delay harvesting their crop, and during that time the value of the tree expands as it grows.”

It’s tax-scam season

Watch out for identity thieves posing as Internal Revenue Service agents, said Kelli Grant in Smartmoney.com. Many of their scams are “newfangled twists on age-old frauds.” Usually, these hucksters are calling or e-mailing consumers to request bank account information to process rebate checks or send tax refunds. So “treat any nonmailed communications that are supposedly from the IRS with plenty of skepticism.” Only in rare situations will IRS agents contact you via phone, and even then they’re certainly not going to ask for your Social Security number or bank account information. “They already have it.”

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