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Fed out of its element
The Fed's campaign to educate investors is well intentioned -- but falls flat.
May 22, 2003: 5:11 PM EDT
By Adam Lashinsky, CNN/Money Contributing Columnist

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PALO ALTO, Calif. - In case you hadn't heard, the Federal Reserve has gotten into the online financial advice business.

Independent, consumer-oriented purveyors of investment tips (like CNN/Money, for instance) needn't worry: The Fed's got a long way to go before anyone other than under-educated economists find its efforts useful.

The Fed's education Web site (see it here) is really a hodgepodge confederation of sites from the regional Fed branches. Ballyhooed in new public service announcements taped by Fed Chairman Alan Greenspan, the education drive has its heart in the right place.

Unfortunately, it won't be of much help to the people who do desperately need it -- confused investors.

Cool for cats

You can just imagine some Web designer in the bowels of the Fed trying desperately to be hip, with the multi-font banner headline: "When It Comes 2 Economic Education, the Federal Reserve is Where It's @."

But the mood of the site quickly shifts: "No matter who you are, making informed decisions about what to do with your money will help build a more stable financial future for you and your family," opines a cool cat named "Chairman Greenspan."

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Unfortunately, what the Fed offers up are a whole lot of basics on economics (plus a fair amount of useless trivia) but not much at all about investing. Its "Web Curriculum," for example, includes a site from the Minneapolis Fed with snippets about the history of money. This information seems to be aimed mostly at grade-school students.

Under "Resources and Research," you'll find another link to a currency primer as well as a link to getting a free video on the history of the Fed.

One promising feature is "Ask Dr. Econ." When I asked, "What is monetary policy?" one of my selections was an informative, short essay that began by explaining, helpfully, "Monetary policy is typically implemented by a central bank, while fiscal policy decisions are set by the national government."

When I asked, however, "What is asset allocation?" Dr. Econ responded, "I'm sorry! I may not have understood your question (or perhaps you've stumped the Doctor!)."

(Google helped me find a spot-on definition of asset allocation from insurance giant MetLife: "Asset allocation is a disciplined, long-term financial strategy for investing money into various asset classes based on your investment goals, time horizon, and risk tolerance." Perhaps this just goes to show that the supposedly biased, for-profit world is good for something.)

It's certainly good to know that the Fed wants investors to be better educated about their finances. And there's no question that good, honest, objective advice is hard to come by.

Maybe some day the Fed will actually offer it.


Adam Lashinsky is a senior writer for Fortune magazine. Send e-mail to Adam at lashinskysbottomline@yahoo.com.

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.