This is the part of a new series of columns called "The Naked Truth," by retirement expert Dan Solin. Please bring him your questions, in the comments box, and he will answer as many as he can.

Ralph Cioffi and Matthew Tannin were indicted on June 18, 2008. They are accused of a litany of fraudulent activities in connection with the demise of two hedge funds they managed for Bear Stearns.

Cioffi and Tannin are entitled to the presumption of innocence. The obligatory "perp walk," staged for the benefit of the press, is offensive to traditional notions of justice. Not only does it demean and humiliate them, it taints the jury pool and intrudes upon their right to a fair trial.

Nevertheless, the indictment offers an insight into conduct that would otherwise be inexplicable.

Here are two highly educated, sophisticated, fund managers who achieved the American dream -- and then some. Why would they risk it all by, as alleged, misrepresenting the risk of these funds, and their personal stake in them?

Here's an item that will give more ammunition to the anti Wal-Mart (NYSE: WMT) crowd -- because they really do need more ammunition.

Pensions & Investments reports that Wal-Mart has been sued for allowing participants in its 401(k) plans to be charged "unreasonably expensive" management fees on the mutuals funds available under the plan. The lawsuit is seeking class-action status, and alleges that the company offered participants retail mutual funds rather than lower-cost institutional funds "despite the ready availability of reasonably priced options ... particularly for a massive plan like Wal-Mart's with tremendous potential to leverage economies of scale."

If you're wondering about how you should invest your own money, here's a hint: the lawyers for the plaintiff compared Wal-Mart's high-cost managed funds to the ultra-low cost funds offered by Vanguard. For example, the actively managed retail fund available to Wal-Mart investors has an expense ratio 1.59% vs. 0.55% for a comparable fund. Over time and many billions of dollars, that adds up: The suit is seeking to recoup at least $60 million in allegedly excessive fees.

Virtually all intelligent and unbiased personal finance experts suggest that retirement money be invested in ultra-low cost index mutual funds. If a lawsuit is what it takes to make Wal-Mart off that option to its employees, than so be it.

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

To some degree, a face-off between Vanguard and Fidelity is really a face-off between John Bogle, Vanguard's founder, and Peter Lynch, Fidelity's star fund manager. While Bogle was a pioneer in no-load and low-cost investing in index funds, Lynch was a proponent of investing in "what you know," or getting investing ideas from your day-to-day life. BloggingStocks covered this Bogle vs. Lynch match up back in September, and readers gave the financial edge to Lynch.

Privately held Fidelity Investments is made up by two independent but closely cooperating companies: Boston-based Fidelity Management and Research LLC serves the North American market, and Fidelity International Limited (FIL), spun off in 1969, provides investment products and services to clients in the rest of the world. Fidelity reported revenue of $12.87 billion in 2006, by offering a large family of mutual funds, as well as providing discount brokerage services, retirement services, estate planning, wealth management, securities execution and clearance, life insurance, and a number of other financial services. The founding Johnson family still controls Fidelity, but Peter Lynch and some other fund managers also hold stakes in the company.

Sam Zell is one of the best real estate investors around and therefore one of the few people whose prognostications for the housing market are actually worth listening to.

And that's good news because, speaking on CNBC's Squawk Box this morning, Zell had this to say about the housing market: "I think starts have already pretty much bottomed out," Zell said. "I think the housing market this spring will begin its recovery phase."

If the recovery will indeed begin that quickly -- and the bottom has already been reached -- than beaten-down REITs have to be considered for investment.

If you're willing to invest based on the idea that Zell is likely to be right but aren't comfortable picking REITs on your own, Vanguard's REIT ETF (AMEX: VNQ) may be worth a look. After a big drop in 2007, the ETF yields around 5%.

Whenever Wall Street starts packaging a product for the masses that's used by sophisticated investors, you know that there is big trouble ahead. There is no way that an individual investor will be able to value and understand the drivers of that investment's value. And it's fairly certain that Wall Street is packaging the security to enrich itself with fees. Wall Street doesn't have to concern itself with whether its investors make money.

This is the first thing that came to mind when I read a Bloomberg News story Barclays Plc (NYSE: BCS) introduced a new product that put a scare into Vanguard Group Inc. and the rest of the $13 trillion U.S. mutual-fund industry. The product? An exchange-traded note (ETN). I really don't know what it is but the story says that it allows individual investors to buy a type of forward contract linked to commodities and assets ranging from oil to currencies to foreign stock indexes. It has lower fees than mutual funds, is less regulated and, for now, lets holders defer taxable income indefinitely.

It sure sounds great and that's probably why the mutual fund industry is so afraid of it. But before you go out and buy one of those ETNs, make sure you understand how its value is set and what makes that value go up and down everyday. Otherwise you could be in for a rude awakening. Can't figure out how to value an ETN? Then I suggest you hold onto your wallet with two tightly clasped fists. When Wall Street comes calling on Main Street for such complex securities.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

In the midst of all the bad news it's hard to imagine the stock market ending the year higher than it started. However, that is entirely possible and probably much better than a 50/50 bet. If you want to play it safe consider buying into an index fund or exchange traded funds (ETFs) instead of banking on individual stocks.

For broad coverage you cannot beat the Vanguard Total Stock Market or the Total International Stock funds with the lowest fees and longest history in this area. I think it has also been generally accepted investing strategy over the last few decades that in bearish markets there is a run to quality and "guns and butter" stocks. If you were to follow this old adage you would be considering three sectors, healthcare, defense and consumer staples.

Mutual funds and ETFs (with less history) are less volatile and offer greater diversification than most investors could achieve, and at much lower cost. If you dollar cost average over the next few months you should also be able to smooth out some bumps in the current market.

When the political machine goes to work to juice the economy the market has most often responded positively. That does not mean it's smart for the country, but since when is a politicians first thought about the country.

There are a handful or business commentators who are worth dropping everything and listening to, and I would put Vanguard Group founder John Bogle at the top of my list.

So that means everyone should drop everything and go read this interview he did with Fortune.

Always logical, some of Bogle's best wisdom comes on the topic of the bad mortgages that banks and hedge funds found themselves loading up on. Talking about his own experience making fixed income investments at Vanguard, he said this.:

The fixed income area is a stupid place to take risk. So, when someone came in and said, we can earn an extra half percent on this bond, I would say, do you think it has any higher risk? If not, why are they offering us an extra half percent?

It's absolutely fascinating that all these ostensibly intelligent people loaded up on subprime debt thinking that they could earn a higher yield without adding risk.

Forget complex reforms and more training -- maybe the executives who got their firms into this mess should have the graph above tattooed to their foreheads.

Check out the Bogle interview for his insight on other topics -- including his guess at the odds of a recession.

The more questions you have these days about the investment world, and the more concerned you are about economy over the next few years, the more you should have some of your assets in electric utilities. Regardless if our nation makes a push toward nuclear, solar, or wind power or does nothing at all, electric utilities will remain the big players. Year in and year out they have a stable customer base, pay a higher dividend yield and have a much higher level of predictability than almost any other investment class.

Another factor that is likely to contribute to the growth of electric utilities is the push toward electric "plug-in" cars. I have not done any analysis as to how this will affect global warming, the price of gas, the quality of air, or total national energy consumption, but those issues aside, if we change even 25% of the nation's automobiles to all-electric over the next ten years, that is a lot of growth.

Historically, the Dow Jones Utilities Average has beaten the pants off the Dow Jones Industrial Average for total return. There are short periods of time when the Industrials jump past the Utilities, but over the long haul, investors have done much better with what seems like the less attention-grabbing, boring old utilities. Choosing boring stocks remind you of anyone? Yes, "My Pal Warren" has been buying these boring stocks over the last decade (adding to his others in chocolate, underwear, ice cream and insurance) and you can see the results in the five-year chart comparing the two Dow indices.

Want to save for college, but not sure what type of account to use? State-sponsored 529 plans should definitely be your first choice. You don't have to pick one from your own state, but tax incentives might encourage you to do so. If your state doesn't off good tax incentives for colleges savings, then look for the plan with the lowest fees. Kiplinger's gives you an excellent overview of your options, as well as a state by state run down.

These state-sponsored plans can give you shelter from both federal and state income taxes, as well as give your child's grandparents a good way to chip in for their grandchild's education. In fact a grandparent can contribute up to $12,000 a year without having to worry about federal gift taxes (a couple can contribute up to $24,000 without gift taxes). If one grandchild decides not to go to college, just switch the account into the name of another child that wants to go. The money in the fund grows tax-deferred and as long as you only use it for qualified educational expenses you don't ever have to pay taxes on the gains.

You also don't have to worry about saving too much. The federal financial-aid formula assesses parent-owned accounts at 5.6%, while student savings can be assessed a whopping 20%. But, if you want to avoid taxes you must use the funds for qualified education expenses, so you don't want to save more than you think your child will need for college.

Even though I would argue that the Vanguard Group is still the greatest financial services company in the world, it's amazing how far the firm has strayed from its founder Jack Bogle's original vision.

According to (subscription required) The Wall Street Journal, Vanguard is starting a new mutual fund that invests exclusively in mega-cap companies -- those with market caps from $3 billion to around $500 billion. According to The Journal, "Vanguard has filed with the Securities and Exchange Commission to launch the Mega Cap 300 Index, Mega Cap 300 Value Index and Mega Cap 300 Growth Index funds. The funds, which will be introduced in December, will track the market-capitalization-weighted MSCI US Large Cap 300 Index and its value and growth subsets."

Exchange-traded, institutional, and investor share classes will be available and, like most Vanguard funds, the expense ratios will be terrific.

I just don't get the point of these funds, and I certainly don't see why any investor would want to rush out and buy them. There aren't that many mega-cap stocks so diversification could be an issue and, all of the companies are already covered by traditional broad-based market index funds.

It seems that the more that traditional index funds are "improved," the more they shift away from the principles that guided Bogle when he invented the first index fund for individual investors in 1975.

When I graduated college, the idea of having my parents negotiate a job offer for me would have sent shivers down my spine. Apparently, this current generation has no such qualms.

They call them "helicopter parents," and according to the Philadelphia Inquirer, they are annoying some of the biggest names in corporate America including General Electric Co. (NYSE: GE), Merrill Lynch & Co. (NYSE: MER) and The Vanguard Group.

What's even more shocking is that the hiring managers are ACCOMMODATING these overbearing people. They are taking a page from the U.S. Army, which now targets its advertising to prospective recruits. The world has certainly changed since I graduated college in 1991 and not for the better.

If I were a hiring manager, I would immediately revoke any job offer for those who had their mom or dad act as their agent. That is ridiculous.

If you are unable to speak for yourself when you graduate college, something has gone terribly wrong. Do today's twenty-somethings expect mom and dad to fight all of their workplace battles for them? When does it stop? This isn't healthy for either parent or child.

Helicopter parents are the types of people who would wrap their children in bubble wrap to protect them from all of life's disappointments. They make sure that no kid gets cut from a sports team and that everyone gets a trophy. These days, there are no winners and losers.

Unfortunately, life doesn't work that way.

Vanguard founder and tireless investor advocate John Bogle is one of my heroes (along with Warren Buffett, Abraham Lincoln, and Joe Montana). The latest issue of Money features an interview with the 77 year-old legend, who offers one of the greatest quotes about investing I've seen in a long, long time: The stock market turns out to be a giant distraction from the reality of owning businesses, which is what investing really is.

Next time you're glued to your TV watching the market drop a couple percentage points in one day, or you fret about your latest stock pick which is down 10% since you bought it, remember Bogle's words. They will save you a lot of worrying, and rescue you from the enormous costs that come with trading too frequently. Here are a couple John Bogle books you absolutely must read:

The Battle for the Soul of Capitalism: While not a book about investing per se, Bogle's treatise on what's wrong with corporate governance in America, and the financial services in general is powerful stuff.

Now that we know Bill Gates limits his kids' computer use -- including interactive gardening games (whatever those are exactly) -- it's certain our country's 8-year-olds are at a crossroads: How will they spend their one hour-a-day on-line? If you said E*Trade, you win.

Fielding e-mails recently, MarketWatch's Paul B. Farrell heard from a reader interested in strategies for the 'super small' investor; you know, "specific funds and allocations" for someone with only about $10,000 to work with. So Mr. Ferrell referred to an investor who, it just so happens, is a second-grader.

Kevin Roth, the 8-year-old son of a Colorado Springs financial planner, recently got "a gift" from his grandmother (who apparently sent one of those super-sized money-holding Hallmark cards), along with some advice from his father, and bought shares in three Vanguard funds -- Vanguard Total Stock Market Index (VTSMX), Vanguard Total International Stock Index (VGTSX), and Vanguard Total Bond Market Index (VBMFX) -- which is more practical than a Nintendo Wii, but come on.

Kevin exemplifies Mr. Farrell's 'Lazy Investing' strategy, which favors a safe, patient approach: "Unless you're working full-time in the financial world, you don't have the skills, tools, information, time or interest in playing the market," he says. "And even if you do play the market, the odds are you'll lose because the more you trade the less you earn; transaction costs and taxes kill returns. So... being a lazy investor is the best defensive strategy."

Kevin's strategy, says Mr. Farrell, "not only beat the S&P 500 by two percentage points last year... it actually beat all five of our lazy portfolios in 2006."

But I know what you're thinking: What about the stock picking monkey? The Chicago Sun-Times' in-house stock expert -- a 35-year-old cinnamon-ring tail cebus monkey from Brazil -- has for the past four years not only beat the S&P 500, not only beat any 'Lazy Investor' strategy, but he's totally housebroken and loves football. He only roots for the Bears, though.

B. Brandon Barker is the author of the novel Operation EMU.

Each year, Money, along with the rest of the financial press, trots out its favorite mutual funds for the new year. I have a suggestion for how savvy investors can use such guides to select mutual funds: crumple them up, throw them in the trash. Then read The Boglehead's Guide to Investing, a great treatise on investing the John Bogle way. After that, log on to Vanguard.com and buy some indexed mutual funds.

But I digress. Here's why you should ignore Money's list of "the best mutual funds you can own." According to their own statistics, 67% of the "Money 70" funds performed in the top half of their category in 2006. That's a fairly impressive short-term track record, but certainly not amazing. It's even less amazing when you consider that Money screened for funds with low expense ratios, and the average fund that they selected had an expense ratio just over half that of the average mutual fund.

Here's the problem: according to all the relevant research (most notably in John Bogle's book), there is an extremely high correlation between a fund's expense ratio and its performance. It's the single most important factor in selecting a mutual fund. While I haven't run the data, I suspect that simply selecting all mutual funds with low expense ratios would provide a success rate better than the 67% that Money reported for their list. I just don't see anything particularly special about Money's list, and certainly nothing worth spending a few dollars on a magazine for.

Bottom line: the most important factor in selecting mutual funds is the expense ratio. To achieve strong diversification at an extremely low cost, consider buying Vanguard's total market index funds, as well as some of their international index funds for additional diversification.

Each week (usually on Saturdays), I'll bring you my list of the four best pieces from the Wall Street Journal for the past week. Did I miss an article you thought was great? Leave a comment and let everyone know.

All right, below are my picks for this past week (note that log-in is required to read the full articles):

1. Boiling Down Top Finance Books This piece lists the bestselling finance books of the past year: and two of the top three are the worst personal finance books I've read: Why We Want You to be Rich and Rich Dad, Poor Dad.
2. Can Spending a Day Stuck to a Velcro Wall Help Build a Team? I've participated in some of these team-building exercises and didn't feel like I got much out of them. But I suppose it depends on the situation. Jared Sandberg has an interesting piece on it.
3. Index Funds 30 years ago, Vanguard started the index fund revolution, Smart Money comes out with their list of the better large-cap and small-cap index funds. These are a must for passive investors and retirement funds.
4. Up for Review: 401(k) Industry With calls for Congressional hearings about collusion hurting 401(k) investors, keep up to date with the controversy.