Demystifying Mutual Funds

Career Planning: Pitfalls to Watch

Valued Customers Stick Around

For Job Seekers

Entrepreneur of the Year

Math Contest

Corrections or additions?

These stories by Kathleen McGinn Spring, Bart Jackson, and Michael

Schumacher were prepared for the March 7, 2001 edition of U.S. 1

Newspaper. All rights reserved.

Hiring And Firing Without Regret

Even back in the lax old days, when the human resources

department said "Personnel" on the door, certain standards

applied. Interviewing a candidate as both a prospective employee and

prospective date in the same session was generally frowned upon. Now,

if you so much as mention that she looks good in that hair net, your

job candidate may initiate a lawsuit. Hiring is fraught with legal

razor wire, while firing frequently demands a two-forest paper trail

and more time than is left on the employee’s contract.

To help sort out the legal and practical morass of employment, 20-year

human resource professional Ruben Rivera teaches a five-session

course, "Fair, Square, and Legal." The course is co-sponsored

by the American Management Association. The first session is on


March 13, at 7:10 p.m. at Mercer County Community College. Cost: $225.

Call 609-586-9446.

"A clerk makes an error," says Rivera, "and it costs the

company thousands." The bill for rectifying a mistake by a


man can run to 10 times that amount. "But when a human resources

person makes a blunder," he says, "it costs the company


of thousands — and it doesn’t go away."

Rivera grew up in Trenton, graduated from Trenton State College, and

began work in personnel for Trenton Rubber Company. When it was bought

out by Carter Wallace, Rivera followed that company to Cranbury, where

he spent the last two decades, until his recent retirement, working

in human resources. He is an adjunct professor at Rider University,

where he teaches collective bargaining, labor relations, human


management, and management and behavior.

"Hiring is probably the most important management decision


says Rivera. Better made widgets, faster selling widgets, and better

handling of widget profits all come about as the result of better,

more energized employees. And while legal constraints have made hiring

more difficult in the past 15 years, he says, the whole process in

most corporations has sharpened immensely.

In the old days, all too often the hirer would just stare at the


recalls Rivera. A bad manager would make up his mind in three minutes

— a good one might take seven. "They were looking to just

fill a slot," he says. "They’d go with their first gut


and a lot of mistakes were made." Today the hiring process has

expanded to include more steps and more players. But despite the


complexity of hiring procedures, there remains a simple list of


techniques and must-avoid blunders:

Update the job description. Such phrases as ". . .

daily file the computer punch cards" can still be found in even

the most progressive firms’ job descriptions. To get it right, talk

with the area supervisor and get in writing every chore and necessary

skill. These must be included not to only match a candidate’s skills

with a job’s requirements, but also to clarify future job evaluations.

Find the unwritten skills. This requires informal talks

with the prospective hire’s co-workers, bosses, and managers to


the more subtle, yet equally valuable, job requirements. Does the

job demand a team player, or a heads-down plow horse who won’t be

easily enticed into office chatter? "A candidate who begins every

sentence of his work history with `I…I…I…,’" says Rivera,

"may not be the information sharer or team player you are looking


Avoid illegal questions. You can get snared into


lawsuits even while making idle chatter to put the candidate at ease.

You cannot ask a person’s age or religion, of course. Asking if they

speak a language other than English at home (unless it’s job related),

or even how they intend to celebrate the Christmas holidays can make

you a legal bigot, open to both personal and corporate litigation.

You cannot ask if a candidate has a disability — although you

must ask after hiring if she needs special accommodations. You may,

however, feel free to inquire if you are schmoozing with a convicted

felon. In fact, you must determine this later fine point, just so

your other employees won’t come suing you for not maintaining a


work environment.

Check resume continuity. "This old standard,"

says Rivera "too often gets ignored. The applicant’s work record

should establish a steady pattern — not too many jumps, good


for leaving, no unaccountable gaps, no non-referenced employers. Look

for sins of omission."

Once a candidate is hired, she enters the new world of business


In today’s workplace, people must be treated fairly, but not equally.

A Muslim receptionist must be allowed space and privacy for the midday

call to prayer. Even little things must be accommodated, says Rivera.

"I’m Puerto Rican, very flamboyant with touching and use of my

hands. Others thrive in a strictly hands-off setting. If you want

to make better widgets, you will accommodate these employees."

Of course, some individuals in the office seem beyond accommodation.

They are rotters and you just want them out. Typically, such a worker

gets jammed into a "progressive discipline" program —

a fancy term for having him fail the proper number of hoop jumps so

he can be fired legally. "This approach," says Rivera,


assumes that firing is the sole solution to the problem." Instead,

Rivera says, an examination process — although lengthy and


— may reveal the problem is more with the company than with the

worker. In a tight labor market with high costs for hiring, training,

and termination, the examination process could be a good investment.

Rivera favors a course he calls "corrective discipline," with

options at each step. First is to re-evaluate the actual job against

its written description. Are the requests sensible? Has that little

daily side errand evolved into 17 hourly trips upstairs? Only after

you have listed a sensible set of job goals, separating the essential

parts and the secondary parts (working and playing well with others,

for example), does the employee get called in and confronted.

Almost invariably the employee will chant the ancient mantra "Why

are you picking on just me? I’ve done everything you’ve told me to

do." Settle the question first, says Rivera. Assure the employee

that you are working on each employee’s needs individually, and today

is the day to focus on his. Then, respond factually to his insistence

that he’s performing adequately. Allow him time to respond. And


Ending this first session, both of you should work out specific


needs. Make those improvements obtainable and measurable goals. Set

follow-up re-evaluations on a lengthening scale. During these follow

ups, see if he’s the wrong man for the job, and try to determine if

there is a better job for him. Gradually wean him from scrutiny.


if it’s not the wrong job or too many unrealistic tasks — if the

guy is just a slacker — you have paper trails aplenty to fire

him without fear of retaliation.

"Of course, problems always abound," says Rivera. "Simple

gripes grow to arbitrated grievances if you don’t train your


and union committee to be sensibly flexible." For that reason,

Rivera plans to bring in as guest speaker a local labor attorney.

"It’s always nice to get a good look at the guy who might be going

after your hide someday across the table," he says.

— Bart Jackson

Top Of Page
Demystifying Mutual Funds

Within a few short weeks, gardens all around Mercer

County will be ablaze with tulips, daffodils, and hyacinths as bulbs

planted last fall, or in seasons further past, will once again become

harbingers of more pleasant days to come. But as even the greenest

gardener knows, this year’s quantity and quality may not be the same

as in previous years. It’s not uncommon for bulbs to rot in


soil, or get eaten up by unscrupulous squirrels. All the same can

be said for mutual funds.

"Sometimes the funds that went up the most last year are not the

ones to buy this year," says Michael J. Delehanty, a


financial planner. "One really needs to look at about 20 years

worth of history," he says, "and most mutual funds haven’t been

around that long."

To illustrate his point further, Delehanty suggests one think of it

as a coin toss. "Everyone is an average coin flipper," he

says. "There are no great coin flippers, and the probability is

that for every 10 flips you’ll get five heads and five tails. Within

that span of 10 flips, you may get three in a row of either heads

or tails. And it’s the same with mutual funds; you may see three or

four good years, but that’s not enough time."

Delehanty teaches a three-week evening workshop, "How to Buy


Funds — Taking the Myth Out of Mutual Funds," at Mercer County

Community College, beginning Tuesday, March 13, at 7 p.m. Cost: $48.

Call 609-586-9446.

Delehanty, who graduated cum laude from Rider University, is also

a principal at Sky Investments, a firm with offices in Forrestal


"In order to take the myth out of mutual funds," he says,

"it is important to focus on the basics and put things in a


perspective." For starters, mutual funds are nothing more than

a basket where fund managers put the securities they buy. "By

definition, a mutual fund is a professionally managed, diversified

portfolio," says Delehanty. "Usually, the portfolio consists

of individual securities.

Three of the main mutual fund categories are stock funds, bond funds,

and a combination of stocks and bonds called balanced funds.


a mutual fund is, in a sense, a basket of securities, the class


on individual securities," says Delehanty. "The first step

in understanding what stock or bond fund to invest in is exploring

what factors affect the price movements of individual stocks and


Delehanty says it is important for investors to understand financial

lingo. "Strengthening our vocabulary helps us to filter through

the often overwhelming and sometimes contradictory information that

we are bombarded with on a daily basis," he says. "The ability

to convert information into knowledge is fundamental to success in

the dynamic world of investing."

"The daily drone of financial information," says Delehanty,

"has helped to create a number of myths about mutual funds."

Some of the commonly held, but incorrect, beliefs about mutual funds


Past performance is an important indicator of future

performance .

Many mutual fund investors chase mutual fund performance.


last year’s winners may be next year’s losers. Certainly, 1999’s


winners were 2000’s losers and 1999’s value fund losers were 2000’s

winners. While the technology-laden Nasdaq was skyrocketing in 1999,

due in part to dot-com mania, value managers like Warren Buffet and

David Dreman saw their funds actually go down in net asset value.

Those investors who sold their 1999 losers in early 2000 to buy 1999’s

winners only compounded their losses. Had they held on to their


losers, they would have been rewarded if their managers were named

Buffet or Dreman.

No load funds don’t charge fees. All mutual funds, even

money market funds, charge fees. The fees vary from fund to fund.

An example of low management fee is the 0.18 percent charged by


S&P 500 index fund. On the high end is the 1.2 percent charged by

the Kemper-Dreman High Return fund. The performance of the two funds

from late-February, 2000 to late-February, 2001, however, demonstrates

that fees are far from the only consideration an investor should have

in choosing a fund. The first fund handed investors a 3.8 percent

loss, while the second shot up 71.1 percent.

No load is better than commission. Comparing the no load

Vanguard S&P 500 fund to the commission Kemper Dreman High Return

fund last year, the commission fund had far superior performance.

However, remember myth number one.

Only buy mutual funds with long term track records. It

is statistically more reliable to invest in a fund manager with a

20 year track record than one with a two year record. The problem

is that the mutual fund industry has grown so rapidly that the vast

majority of funds do not have 20-year track records. Of 198 funds

classified as large cap growth for the last year, only 67 have even

a 10-year track record.

Three years is a good long term performance record. If

you think so, try the coin flip test discussed above.

United States government bond funds are guaranteed. Though

the individual bonds in the portfolio may be backed by the full faith

and credit of the government, the mutual fund is not. A bond fund

has no maturity date, therefore there is no point in the future where

the government can "guarantee" the value of the bonds. The

price of your bond fund will generally move in an inverse relationship

to interest rates.

Mutual funds are safe long term investments. Since mutual

funds are a basket of individual securities, they generally track

the markets they’re invested in. The stock market has a strong


to the overall economy. As the 1990s was a good decade for the United

States economy, so too, it was a good decade for stock markets in

the United States stock markets. In contrast, the oil shocks of the

1970s created a tough decade for the domestic economy. The Dow Jones

industrial average’s peak in 1969 was 968.9. Its 1979 trough was


That is a 10-year decline of 17.77 percent.

"Taking the Myth Out of Mutual Funds" is specifically

designed for the novice, says Delehanty. "We review the students’

portfolios as though they were corporations," he says. "We

analyze their personal income statement and balance sheet. From within

this framework, a lifetime of investing can flow."

Top Of Page
Career Planning: Pitfalls to Watch

Two or so jobs ago Elaine Kamm was asked to start

up a training and development department for the Fortune 100 company

where she worked. "I did all the right things," she says.

"It was so good, they told me to hire more staff. And then more

staff. And more." Supervising all those people, and managing a

budget that just kept growing, Kamm had achieved a prestigious spot

in her company, and was making lots of money.

"One morning I woke up, and I was miserable," she says.


a consultant within the company, "an individual contributor,"

she had discovered she did not like administration one bit. What’s

more, she adds, "the stuff I needed to do, I wasn’t even good

at." Sure, she says, she would have done a competent job, but

"I knew I would never be outstanding."

Deciding her strength was in coming up with ideas, and not in managing

a large staff and a budget to match, Kamm pitched the idea of an


development department to her bosses. "I designed the function

for a minimal staff, and a big consulting budget," she says. The

new position worked out well, she says, both for her and for the


Kamm, now a vice president with Manchester Partners International,

speaks on "Career Derailers and How to Avoid/Address Them"

on Tuesday, March 13, at 7:30 a.m. at a meeting of Execunet at the

Doral Forrestal. Cost: $35. Call 609-734-3427.

In the 20 years since she earned a bachelor’s degree in psychology

from Fairleigh Dickinson (Class of 1981) and a master’s degree in

industrial organizational psychology from the Stevens Institute of

Technology, Kamm has been working in the field of executive consulting

and training. Her husband, Stephen Germany, is a "technology

person," a systems development consultant. They have a son, Adam,

who lives in Colorado with his wife, Kelly, and their two-year-old

daughter, Payton. Kamm, who lives in Hunterdon County and works from

Manchester’s Princeton office, says she flies west four times a year

to see Payton.

Drawing from her years of experience, as well as her own career


Kamm offers this advice to executives who want to keep their careers

on track:

Avoid becoming complacent. A commonly accepted theory

is that success is the best predictor of more success, Kamm says.

But the tendency of successful people to think they need only keep

on doing what they’ve been doing to keep on succeeding can be a career

killer. That’s because change is the new constant, and the skills

and behaviors that won praise and promotions in one situation don’t

necessarily work well in another. "Every time you get a new boss,

it’s a new job," Kamm says.

Mergers and shifts in company priorities also can create entirely

new situations. And so can promotions, as she found out in the


job she hated. The killer closing techniques that served a star


so well in the field may hurt him in a sales management role. The

in-your-face style that won points with one manager may backfire with

a new manager who abhors aggressive behavior.

Scope out your strengths. Everyone has skills, and


too. Kamm discovered this when an overload of the detail work


in an administrative position stripped the joy from her work.


back to the consulting work she loved allowed her to keep moving


Realistic self evaluation will clarify career direction. Ignoring

natural skills and accepting promotions — or new jobs — solely

because they offer more money or prestige can knock a promising career

off the tracks. Often, Kamm says, "a top salesman is promoted

to sales manager, and everyone asks `what happened to him?’" What

most likely happened, she says, is that the salesman kept on doing

what he was good at — selling — and did not develop as a


Create a feedback frenzy. Self-knowledge is a good thing,

but often is not enough. Most people need to turn to those around

them to get a sense of how they’re doing. "People who are really

successful seek feedback," Kamm says. "They really want it.

It’s not just that they’re looking for someone to say `Great


This feedback should come in frequently, and from every direction.

Kamm suggests that work evaluations should be sought not just from

supervisors, but also from co-workers, and underlings.

Ask what’s different. When there is change at work,


an acquisition, "a lot of time is spent being angry and holding

on to the past," says Kamm. Don’t waste time this way is her


"People need to ask `what’s different?’ They need to look at


and ask `How can I made adjustments in my behavior to fit in with

the new boss, new acquisition, new job?" This is not easy, she

says, because everyone has what she calls "success factors,"

behaviors that have worked well in the past. "It’s a natural


she says. "Psychology tells us we keep doing things we get



Top Of Page
Valued Customers Stick Around

Each year thousands of New Jersey’s small businesses

ring up their last sale. Many started life feeding on advice from

the Small Business Administration, the National Association of Women

Business Owners, or the local Chambers of Commerce. But often the

new business owner becomes completely consumed by day-to-day tasks

and loses sight of the basics of the business plan he crafted with

the help of experienced mentors.

"Individuals often get into their own business to have a job and

gain independence," says Mike Pucciarelli of Bartolomei

and Pucciarelli CPA & Consultants "But often they don’t realize

what is needed to make it grow."

Pucciarelli, along with his business partner, Jim Bartolomei,

speaks on "Making Your Business Soar" on Tuesday, March 13,

at 8 a.m. at the Palmer Inn. Cost: $350. Call 609-396-2480.

Pucciarelli holds a bachelor’s degree in accounting from Montclair

State College (1981). He specializes in tax and business planning

for small to medium-sized companies.

The goal of his seminar, Pucciarelli says, is to encourage businesses

to stretch beyond their initial goals. "We call this maintaining

a flight plan," says Pucciarelli. "It’s important for a


to know where it is going."

Pucciarelli says one of the top reasons a business loses customers

is perceived indifference, which occurs when customers believe that

they no longer really matter to a company based upon how they are

treated. It’s not unusual, he says, for a business to concentrate

so hard on gaining new business that it gives the impression of


its existing customers. And once a customer has left, at a minimum

it is extremely costly to get him back again. In many cases, it just

won’t happen.

Some elements that add up to a perception of indifference are a


to return phone calls, use of voice mail rather than a receptionist,

and not paying attention to customers when they walk in the door.

"Businesses need to keep doing the small things for their


says Pucciarelli. "They need to improve their internal


Then a business can get more business from its customers, and not

be so dependent upon new ones.

"I tell businesses that they are wasting their money by spending

thousands of dollars on advertising if, when someone calls, they get

a company’s voice mail," he says.

The flip side of perceived indifference, Pucciarelli says, is


value. When customers believe their needs are important, price is

less of an issue. "A business can grow," Pucciarelli says,

"simply by adding value to their existing products and


— Michael Schumacher

Top Of Page
For Job Seekers

The Jewish Family & Children’s Service of Greater Mercer

County will run its Project Reemployment program starting Monday,

March 19, from 9 a.m to 3 p.m. at 707 Alexander Road. It continues

on Tuesday, March 20 and Friday, March 23.

This program is for those who are currently unemployed or are facing

imminent job loss. It offers information about self-assessment, skill

development, resume writing, interviewing, and searching for


It is free, but pre-registration is required. Call Rachel


at 609-987-8100.

Top Of Page
Entrepreneur of the Year

The business council of the Princeton Chamber of


is accepting nomination for its Ninth Annual Entrepreneur of the Year

Award. The candidate must be a chamber member and have been in


for a minimum of three years. The award includes a donation to the

winner’s favorite charity by supporting sponsor, Fleet Bank, publicity

in area newspapers, and CCPA’s newsletter, and qualification for state

and national recognition.

Call the chamber at 609-520-1776 for nomination forms and additional

information. Deadline for submissions is March 16.

Top Of Page
Math Contest

The New Jersey Society of Professional Engineers’


Foundation is sponsoring MATHCOUNTS, a math achievement competition

to be held on Saturday, March 10, at the Bell Atlantic Corporate


Center in South Plainfield. The approximate 2,500 New Jersey students

who are participating in the program this year compete for trips to

the Washington, D.C., national finals, to the NASA Space Camp, and

for scholarships.

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