Highest paying jobs in America

If you want to land one of the country's best jobs, check out the education and training that can get you there.

By Tony Moton

If you're in the market for a new career - and willing to do a little training to get there - you might want to look to Money and PayScale's 2010 "Best Jobs in America" list.

The annual list features 100 top careers that score high in areas such as earning potential, employment outlook, and flexibility.

But what does it take to actually qualify for one of these jobs?

We took a look at the top 100 and spotlighted seven jobs that almost anyone can work toward. To help you figure out which - if any - of these "Best Jobs" is right for you, check out the list below...

SALES DIRECTOR

Best Jobs Rank: No. 8

Average Salary: $142,000

Sales Directors scored their jobs high for flexibility and personal satisfaction in the "Best Jobs" survey. While Sales Directors are at the top of the heap, starting out in sales is a great way to work toward this top job.

The Job: Good sales skills can be used in almost any industry - from tech to manufacturing to biomedical to consumer products. Many sales jobs are paid partially on commission, so your performance directly affects your pay. This can mean pressure, but also big rewards in a relatively short period of time.

Education and Training: A bachelor's degree in business administration is a great way to get a firm grounding in business principles. Studying marketing can also give you the tools you need to understand customers and how to talk to them.

Related Degrees:

Associate's degree in business

Master's degree in business administration (MBA)

CERTIFIED PUBLIC ACCOUNTANT (CPA)

Best Jobs Rank: No. 9

Average Salary: $73,000

Job flexibility and job growth scored big with CPAs who responded to questions about the quality-of-life aspects of their job for the "Best Jobs in America" list. [Train for your Accounting career at a top school]

The Job: CPAs can work for accounting firms or branch out on their own and work independently. One of the hottest careers in this field is forensic accounting, which involves uncovering and tracking white-collar crimes in today's high-tech world. A very cool job if you're into number crunching.

Education and Training: Start by earning your bachelor's degree in accounting. From there, you will need to pass a national exam and meet the standards of the state where you practice in order to qualify as a full-fledged CPA. Others with two-year degrees and proven experience have opportunities to land junior accounting positions.

Related Degrees:

Associate's degree in accounting

Bachelor's degree in finance

HOSPITAL ADMINISTRATOR

Best Jobs Rank: No. 36

Average Salary: $98,000

This job ranked high due to a combination of high pay, future job growth, and personal satisfaction.

The Job: Hospital administrators play a big role in directing health care and medical services. They can work in hospitals, nursing care facilities, managed care facilities, or other related organizations.

Education and Training: Running a health care facility requires you to have expertise in both the medical and business fields. To enter this worthwhile career as an entry-level or assistant administrator, consider earning a bachelor's degree in health administration. On-the-job experience and a master's degree in health administration can help you move up the ranks.

Related Degrees:

Bachelor's degree in business administration

Master's degree in business administration (MBA)

HUMAN RESOURCES CONSULTANT

Best Jobs Rank: No. 43

Average Salary: $92,000

Personal satisfaction topped the quality-of-life ratings among human resources (HR) consultants surveyed for the "Best Jobs in America."

The Job: HR consultants do everything from training employees to managing labor relations, making them extremely important to the financial success and well-being of their clients.

Education and Training: Plenty of educational options can prepare you for consulting work in this field, including a bachelor's degree in business. In this case, you can take courses covering human resources or get a concentration to augment your degree work.

Related Degrees:

Bachelor's degree in human resources

Master's in business administration (MBA)

INTENSIVE CARE UNIT NURSE

Best Jobs Rank: No. 59

Average Salary: $77,000

Nurses polled for the "Best Jobs in America" list rated personal satisfaction as one of the more appealing aspects of this career.

The Job: Registered nurses (RNs) who work in the area of critical care provide crucial services for patients afflicted with serious or acute injuries. These services include the close monitoring of patients who require extensive medication and therapy.

Education and Training: An associate's degree in nursing takes two to three years to complete, and it sets you up for a career with many options. Most RNs start out as staff nurses before choosing to work in specialized areas such as intensive care.

Related Degrees:

Diploma in nursing

Bachelor's degree in nursing

WEB DEVELOPER

Best Jobs Rank: No. 67

Average Salary: $76,000

Our reliance on the Internet means web developers are likely to be in demand for the long haul. In fact, web developers rated job growth as one of the most attractive quality-of-life aspects of this job in the "Best Jobs" survey.

The Job: Skilled web developers fuse information and technology as they supply the code for Web sites. It's a demanding but rewarding occupation that also got good marks for personal satisfaction and job flexibility.

Education and Training: An associate's degree in computer science is a great way to prepare for entry level work as a web developer. Combined with practical experience, a degree can further elevate your chances of landing job opportunities.

Related Degrees:

Associate's degree in IT & information systems

Associate's degree in graphic design

Bachelor's degree in computer programming

PUBLIC RELATIONS DIRECTOR

Best Jobs Rank: No. 84

Average Salary: $85,000

Are you a good communicator and leader with a creative side? Well, listen up. A supervisory job in public relations (PR) gives you a chance put your persona to work every day. That's the reason PR directors gave their job excellent marks for personal satisfaction in the "Best Jobs" survey.

The Job: PR directors - who are responsible for everything from press releases to full-blown campaigns - ultimately determine what kind of impression their employers project to the world.

Education and Training: Earning a bachelor's degree in communications puts you right in line for openings in this high-energy field. As marketing and promotions increasingly rely on online savvy, you'll be helped by an ability to work in an Internet environment.

Related Degrees:

Bachelor's degree in marketing

Bachelor's degree in business

Bachelor's degree in finance

*Average salary represents median pay for experienced worker with at least two to seven years in the field. All salary data is from PayScale.com.

Places with the most money in America

Source: Forbes
Where Americans Are Getting Richer
by Lauren Sherman
Monday, November 29, 2010
Greensboro, N.C., might not be the best place to find a steady job. But if you've already got one, chances are you're doing better than you were a couple of years ago.

The city's unemployment rate is 9.8%, nearly a point above the still-high national average. But those with college degrees who have managed to keep their jobs during the recession have seen their median income jump to $53,400 in 2010 from $48,900 in 2007.

Sarasota, Fla., tells a similar story. The city carries a frightening unemployment rate of 12.6%. Yet its median income has increased to $51,100 from $47,400.

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Depressed. Struggling. Discouraged. These are the cities where Americans are getting richer?

Compared with the rest of the country, yes. "We're not talking gangbuster wages here," says Al Lee, director of quantitative analysis at PayScale.com, a Seattle, Wash.-based provider of employee compensation data. "Raise increases have been generally flat nationally over the last couple of years, so a few points make a big difference."

To determine the places where Americans are getting richer, PayScale studied the compensation of college graduates for which it had data--about 1.5 million people--in the 100 most populous Metropolitan Statistical Areas in the country, ranking each city by compounded income growth between 2007 and 2010.

Why are these middle-of-the-road cities succeeding? Rochester and Poughkeepsie, N.Y., didn't have a housing boom, so they didn't have a bust, either. "Slow and steady cities benefited," says Lee. Same with places like Pittsburgh, Penn., where the big business is in medicine and education. In Thousand Oaks, Calif., biotech reins. "These are industries that weren't as affected by the recession," says Lee.

Cities like New York, San Francisco, and Chicago may garner higher median incomes, but their major industries are more cyclical. Publishing, finance and media are all in flux at the moment. Education, government and medicine are more stable--and the cities that rely on those industries are as well.

Greensboro, for instance, has a low 2010 median income--$53,400--compared with the national median income of college graduates, which is over $58,000. But it has something most cities with higher median incomes or reliance on construction don't: an economic backbone supported by businesses in the insurance field, manufacturing and education. These industries might not be growing rapidly, but they aren't disappearing either--so for now, a steady income is better than a high income.

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Of course, some cities on our list are lucky enough to boast both climbing incomes and lots of jobs. Honolulu, Hawaii, continues see an increase in income while maintaining a low unemployment rate of 5.3%. (Most economists would agree that the natural of unemployment lies between 4% and 7%.)

"Honolulu wasn't as affected by the housing boom/bust as, say, Las Vegas," says Lee. "And tourism is finally starting to pick up a bit."

In most places, the amount of money people make is tied closely to their level of education. And in places like Sacramento, Calif., (where the median pay for college graduates is fairly high at $64,900, and compounded growth is over 6%), the uneducated suffer most.

"Sacramento is a government town," says Cynthia Kroll, senior regional economist and executive director of staff research at the Fisher Center of Real Estate and Urban Economics at the Haas School of Business, University of California Berkeley. "Within the government, higher-paid workers are more protected. They have more seniority. Even though there have been plenty of layoffs on the lower end, the median income [for college-educated workers] might still be going up."

1. Greensboro, N.C.

Median Pay, 2007: $48,900
Median Pay, 2010: $53,400
Median Pay Trend: 9.2%
Unemployment Rate: 9.8%

2. Thousand Oaks, Calif.

Median Pay, 2007: $62,900
Median Pay, 2010: $68,600
Median Pay Trend: 9.1%
Unemployment Rate: 11.1%

3. Rochester, N.Y.

Median Pay, 2007: $52,900
Median Pay, 2010: $57,300
Median Pay Trend: 8.3%
Unemployment Rate: 7.4%

4. Poughkeepsie, N.Y.

Median Pay, 2007: $56,700
Median Pay, 2010: $61,200
Median Pay Trend: 7.9%
Unemployment Rate: 7.5%

5. Sarasota, Fla.

Median Pay, 2007: $47,400
Median Pay, 2010: $51,100
Median Pay Trend: 7.8%
Unemployment Rate: 12.6%

6. Pittsburgh, Pa.

Median Pay, 2007: $51,600
Median Pay, 2010: $55,500
Median Pay Trend: 7.6%
Unemployment Rate: 7.4%

7. Baton Rouge, La.

Median Pay, 2007: $46,900
Median Pay, 2010: $50,400
Median Pay Trend: 7.6%
Unemployment Rate: 7.8%

8. Madison, Wis.

Median Pay, 2007: $53,000
Median Pay, 2010: $56,900
Median Pay Trend: 7.4%
Unemployment Rate: 5.1%

University of Central Florida's graduates struggle to find jobs By Chris Boyle

Source: Orlando Sentinel
After Brian Amick graduated with his mechanical engineering degree last May, he immediately compiled a list of every major boat manufacturer in the southeast. He contacted between 300 and 400 employers via e-mail or application.

He waited to receive a phone call or an e-mail response. And he waited. And he waited. Only a handful of companies ever contacted him.

"It got to the point where I was happy to receive a negative response, just to know that I was being heard," Amick said.

Amick is just one member of the majority of college graduates who struggle to find work prior to graduation. According to a survey from the National Association of Colleges and Employers, more than 80 percent of students finish their college career without a job lined up.

Amick attributed his three-month-long wait, prior to being hired as a field service representative at Saab Training USA, to a lack of contacts in the engineering profession.

"A lot of companies use online databases now, and unless you have the right words in your résumé, they'll never find you in their system," Amick said. "I know someone who works for Siemens, and I still never got a call back."

His problem is just an example of the cases the UCF Career Services department deals with each week.

THE SOCIAL NETWORK

On Nov. 10, Career Services hosted a workshop titled "A Foot in the Door," which stressed the importance of building a network.

Its own network, KnightLink, currently features more than 20,000 students and former alumni and 11,000 employers. As of January 2011, Career Services will mandate that each student seeking help have an account.

On KnightLink, each student can search for available positions from employers such as Disney, Lockheed Martin and Enterprise Rental Car. In the next few months, the site will feature an enhancement to its résumé-writing module, allowing for a better filing of information.

Despite the tough job market in Orlando, about 420 jobs are listed as available on the site.

Amy Kleeman, the department's director of employer relations, believes that a student has much greater odds of being hired by using KnightLink since a student can schedule an interview with a company on the web.

"Employers that come on campus have a high rate of hiring," Kleeman said. "Rarely do you see an employer not hire one, if not several students when they come here."

THE IMPORTANCE OF INTERNSHIPS

A second problem for Amick in his job search stemmed from his lack of professional experience.

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"In my field, even the entry-level positions require experience," Amick said. "If I had it to do over again, I would have applied for an internship way earlier, probably in my sophomore year, just to get my name out there."

According to the 2010 NACE survey, approximately 92 percent of responding companies expected to hire from within their own internship or co-op programs. More than 53 percent of interns received jobs, down from about 56 percent the year before.

Bill Blank, Career Services' director of career development, feels that internships give students a crucial leg up over stiff competition.

"In UCF, you have the second-largest population in the country and [the University of] Florida has the fifth-or-sixth-largest," Blank said. "So many college graduates in Florida mean more competition, with current graduates competing with former alums. I say that students get related experience so they not only have the education but also the experience."

LACK OF EXPOSURE

Even with the second largest undergraduate population in the United States, UCF has less than half of its student body seeking assistance from Career Services. Blank aims to attract a larger number of students earlier in their college careers.

"The goal is to get students from day one and work with them for the two-to-four year period after," Blank said.

Career Services holds workshops, maintains a Facebook page and sets up tables at major campus events to attract attention. Beginning next year with the opening of the new building, Career Services will host full classes for seminars and tours.

Blank intends for a new wave of students to discover the department's benefits.

Chris Boyle is a UCF journalism student.

Barbara Walters: Most fascinating person of the year

Walters spotlights year's most fascinating people

Mon Nov 29, 2010

By Frazier Moore, The Associated Press

NEW YORK, N.Y. - What does octogenarian funny lady Betty White share with teen singing sensation Justin Bieber?

What do film star Sandra Bullock and hoops star LeBron James have in common?

All are among this year's crop of "The 10 Most Fascinating People," as harvested by Barbara Walters from the fields of entertainment, sports and world affairs.

Also on the list: GOP superstar Sarah Palin, incoming "American Idol" judge Jennifer Lopez, royal fiancee Kate Middleton and the entire cast of MTV's "Jersey Shore." Two more Most Fascinating People are yet to be disclosed, and, as usual, the 10th name will be kept under wraps until the ABC News special airs Dec. 9 at 10 p.m. EST.

This is the 18th year Walters has presented her roundup of the biggest and most buzzworthy. But this year, there's more. She's got a companion special the same night.

An hour earlier — at 9 p.m. EST — Walters is hosting "Oprah, The Next Chapter." It's an in-depth visit with Winfrey as she readies OWN, her new cable network launching Jan. 1, and roars down the home stretch of her daytime talk show's final season.

"I interviewed her in 1988, when she was first becoming very popular," Walters said not long ago. "She and I consider this latest interview our coming full circle."

On the program, Winfrey will discuss her new network, the reason she's doing it and concerns she has for its success — "it's a huge leap of faith," Walters said.

Winfrey also talks "very personally" about her relationships with best friend Gayle King and longtime partner Stedman Graham.

"This is an interview about Oprah's life at this turning point," Walters said.

On "The 10 Most Fascinating People of 2010," the conversation is personal, too, when Walters sits down with White.

At 88, White has enjoyed a year of triumphs and much-deserved attention as an actress-comedian who is full of life, but during her interview, "she talks about how she feels about death," said Walters, adding, "She still wants to have sex."

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Palin — the bestselling author and former governor and vice-presidential candidate — is one of Walters' most fascinating people for a record third consecutive year. Walters said she came away from their recent meeting convinced that "this is a woman who is going to be a candidate (for president) — or, at least, wants to be a candidate."

Despite acknowledging that "Jersey Shore" is not a series she has watched very much, Walters saw fit to interview Snooki, The Situation and the rest of this outrageous reality show.

"They were all on very good behaviour and very well dressed, and they've all got big plans for the future," said Walters. "And they taught me their language" — terms like smoosh and grenade — "none of which I need to know."

Walters learned something from Bieber, too. He taught Walters a new dance.

"This is a kid who is smart as can be and very talented at 16," Walters said. And despite his huge success (he emerged as the biggest winner at this year's American Music Awards), he hasn't lost his grounding as a 16-year-old: "His mother still takes away his computer when he doesn't behave."

As Walters looked back at the year that served up her latest "Fascinating People," she couldn't help remark on what the year has meant to her: In May, she underwent open-heart surgery to replace a faulty valve.

"It was last year at this time that there began to be this shadow in my life," she said, "because that's when I heard that I might possibly have to have this surgery. Now that shadow is gone. I've been staggeringly busy the last few months, and I'm fine.

"It's not that I'm fascinating, but I think my journey this year has been fascinating."

World of backstage international diplomacy revealed by State Department's leaked documents

Leaked US cables reveal sensitive diplomacy
By MATTHEW LEE, Associated Press Matthew Lee, Associated Press – Sunday November 28, 2010

WASHINGTON – Hundreds of thousands of State Department documents leaked Sunday revealed a hidden world of backstage international diplomacy, divulging candid comments from world leaders and detailing occasional U.S. pressure tactics aimed at hot spots in Afghanistan, Iran and North Korea.

The classified diplomatic cables released by online whistle-blower WikiLeaks and reported on by news organizations in the United States and Europe provided often unflattering assessments of foreign leaders, ranging from U.S. allies such as Germany and Italy to other nations like Libya, Iran and Afghanistan.

The cables also contained new revelations about long-simmering nuclear trouble spots, detailing U.S., Israeli and Arab world fears of Iran's growing nuclear program, American concerns about Pakistan's atomic arsenal and U.S. discussions about a united Korean peninsula as a long-term solution to North Korean aggression.

There are also American memos encouraging U.S. diplomats at the United Nations to collect detailed data about the U.N. secretary general, his team and foreign diplomats — going beyond what is considered the normal run of information-gathering expected in diplomatic circles.

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None of the revelations is particularly explosive, but their publication could prove problematic for the officials concerned. And the massive release of material intended for diplomatic eyes only is sure to ruffle feathers in foreign capitals, a certainty that prompted U.S. diplomats to scramble in recent days to shore up relations with key allies in advance of the disclosures.

The documents published by The New York Times, France's Le Monde, Britain's Guardian newspaper, German magazine Der Spiegel and others laid out the behind-the-scenes conduct of Washington's international relations, shrouded in public by platitudes, smiles and handshakes at photo sessions among senior officials.

The White House immediately condemned the release of the WikiLeaks documents, saying "such disclosures put at risk our diplomats, intelligence professionals, and people around the world who come to the United States for assistance in promoting democracy and open government."

t also noted that "by its very nature, field reporting to Washington is candid and often incomplete information. It is not an expression of policy, nor does it always shape final policy decisions."

"Nevertheless, these cables could compromise private discussions with foreign governments and opposition leaders, and when the substance of private conversations is printed on the front pages of newspapers across the world, it can deeply impact not only U.S. foreign policy interests, but those of our allies and friends around the world," the White House said.

State Department spokesman P.J. Crowley played down the spying allegations. "Our diplomats are just that, diplomats," he said. "They collect information that shapes our policies and actions. This is what diplomats, from our country and other countries, have done for hundreds of years."

On its website, The New York Times said "the documents serve an important public interest, illuminating the goals, successes, compromises and frustrations of American diplomacy in a way that other accounts cannot match."

In a statement released Sunday, WikiLeaks founder Julian Assange said, "The cables show the U.S. spying on its allies and the U.N.; turning a blind eye to corruption and human rights abuse in 'client states'; backroom deals with supposedly neutral countries and lobbying for U.S. corporations."

Their release — the first in a series of planned releases over the next few months — "reveals the contradictions between the U.S.'s public persona and what it says behind closed doors," Assange said.

The documents were again available on the WikiLeaks website Sunday afternoon. The site was inaccessible much of the day, and the group claimed it was under a cyberattack.

But extracts of the more than 250,000 cables posted online by news outlets that had been given advance copies of the documents showed deep U.S. concerns about Iranian and North Korean nuclear programs along with fears about regime collapse in Pyongyang.

The Guardian said some cables showed King Abdullah of Saudi Arabia repeatedly urging the United States to attack Iran to destroy its nuclear program. The newspaper also said officials in Jordan and Bahrain have openly called for Iran's nuclear program to be stopped by any means and that leaders of Saudi Arabia, the United Arab Emirates and Egypt referred to Iran "as 'evil,' an 'existential threat' and a power that 'is going to take us to war,'" The Guardian said.

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Those documents may prove the most problematic because even though the concerns of the Gulf Arab states are known, their leaders rarely offer such stark appraisals in public.

The Times highlighted documents that indicated the U.S. and South Korea were "gaming out an eventual collapse of North Korea" and discussing the prospects for a unified country if the isolated, communist North's economic troubles and political transition lead it to implode.

The Times also cited diplomatic cables describing unsuccessful U.S. efforts to prod Pakistani officials to remove highly enriched uranium from a reactor out of fears that the material could be used to make an illicit atomic device. And the newspaper cited cables that showed Yemen's president, Ali Abdullah Saleh, telling U.S. Gen. David Petraeus that his country would pretend that American missile strikes against a local al-Qaida group were from Yemen's forces.

The paper also reported on documents showing the U.S. used hardline tactics to win approval from countries to accept freed detainees from Guantanamo Bay. It said Slovenia was told to take a prisoner if its president wanted to meet with President Barack Obama and said the Pacific island of Kiribati was offered millions of dollars to take in a group of detainees.

It also cited a cable from the U.S. Embassy in Beijing that included allegations from a Chinese contact that China's Politburo directed a cyber intrusion into Google's computer systems as part of a "coordinated campaign of computer sabotage carried out by government operatives, private security experts and Internet outlaws."
It also cited a cable from the U.S. Embassy in Beijing that included allegations from a Chinese contact that China's Politburo directed a cyber intrusion into Google's computer systems as part of a "coordinated campaign of computer sabotage carried out by government operatives, private security experts and Internet outlaws."

Le Monde said another memo asked U.S. diplomats to collect basic contact information about U.N. officials that included Internet passwords, credit card numbers and frequent flyer numbers. They were asked to obtain fingerprints, ID photos, DNA and iris scans of people of interest to the United States, Le Monde said. The Times said another batch of documents raised questions about Italian Prime Minister Silvio Berlusconi and his relationship with Russian Prime Minister Vladimir Putin. One cable said Berlusconi "appears increasingly to be the mouthpiece of Putin" in Europe, the Times reported.
Italy's Foreign Minister Franco Frattini on Sunday called the release the "Sept. 11 of world diplomacy," in that everything that had once been accepted as normal has now changed.
Der Spiegel reported that the cables portrayed German Chancellor Angela Merkel and Foreign Minister Guido Westerwelle in unflattering terms. It said American diplomats saw Merkel as risk-averse and Westerwelle as largely powerless.
Libyan leader Moammar Gadhafi, meanwhile, was described as erratic and in the near constant company of a Ukrainian nurse who was described in one cable as "a voluptuous blonde," according to the Times.
The Obama administration has been bracing for the release for the past week. Top officials have notified allies that the contents of the diplomatic cables could prove embarrassing because they contain candid assessments of foreign leaders and their governments, as well as details of American policy.
The State Department's top lawyer warned Assange late Saturday that lives and military operations would be put at risk if the cables were released. Legal adviser Harold Koh said WikiLeaks would be breaking the law if it went ahead. He also rejected a request from Assange to cooperate in removing sensitive details from the documents.
In a session Sunday with a group of Arab journalists, Assange said, "The State Department understands that we are a responsible organization, so it is trying to make it as hard as it can for us to publish responsibly."
He called the Obama administration "a regime that doesn't believe in the freedom of the press and doesn't act like it believes it."
The New York Times said the documents involved 250,000 cables — the daily message traffic between the State Department and more than 270 U.S. diplomatic outposts around the world. The newspaper said that in its reporting, it attempted to exclude information that would endanger confidential informants or compromise national security.
The Times said that after its own redactions, it sent Obama administration officials the cables it planned to post and invited them to challenge publication of any information they deemed would harm the national interest. After reviewing the cables, the officials suggested additional redactions, the Times said. The newspaper said it agreed to some, but not all.
Also Sunday, the Pentagon released a summary of precautions taken since WikiLeaks published stolen war logs from the conflicts in Iraq and Afghanistan. Since August, the Pentagon has changed the way portable computer storage devices such as flash drives can be used with classified systems, and made it harder for one person acting alone to download material from a classified network and place it on an unclassified one.
___
Associated Press staffers Anne Gearan in Washington, Juergen Baetz in Berlin, Don Melvin in London, Angela Doland in Paris, Robert H. Reid in Cairo, Brian Murphy in Dubai, United Arab Emirates, Mark Lavie in Jerusalem and Nicole Winfield in Rome contributed to this report.

HSBC announces new UK management team

HSBC has named its new UK management team as part of a reshuffle at the top of the bank under incoming group chief executive Stuart Gulliver.

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Brian Robertson, currently group risk officer, will be in charge of the group's operations in the UK and continental Europe.

Joe Garner will head the UK's retail and business banking divisions.

The appointments will take effect next week. Current UK boss Paul Thurston will take up a new role in Hong Kong.

He has been promoted to the newly-created post of chief executive of retail banking and wealth management.

In September, HSBC announced changes to the group's boardroom, with Stuart Gulliver set to replace Michael Geoghegan as chief executive next year.

Hoe a fund helped make gold prices glitter

Source: Wall Street Journal Online
Behind Gold's New Glister: Miners' Big Bet on a Fund
By LIAM PLEVEN and CAROLYN CUI

The innovation that opened gold investing to the masses and helped spur this year's record-breaking bull market was hatched in an act of desperation by a little-known gold-mining trade group.

The World Gold Council, created to promote gold, was fighting for survival. Its members—global gold-mining companies—were frustrated with the council's inability to stem two decades of depressed prices and find buyers for a growing glut of the yellow metal. Eight years ago, they were considering withdrawing funding from the trade group, a move that would have effectively shut it down.

Chris Thompson, the group's chairman, figured the council needed to expand the pool of gold buyers, particularly in the U.S. The idea of trading gold on an exchange had been floating around for years, but various hurdles had prevented it from taking off in America.

What the council eventually managed to create in those dark days surpassed its wildest dreams: SPDR Gold Shares, the exchange-traded fund launched in November 2004. The fund, known by its ticker symbol GLD, has ballooned into a $56.7 billion behemoth.

Today, GLD is the fastest-growing major investment fund ever, according to research company Lipper Inc., and one of the most active gold traders in the market. Its presence has helped gold—which settled down 0.33% in New York trading Wednesday, at $1,372.90 a troy ounce—triple in price in recent years to fresh all-time highs this month.

As the world's largest private owner of bullion, GLD is soaking up $30 million of gold daily, stored in a London vault that now holds the equivalent of about six months' worth of the world's entire gold-mining production.

GLD has won fans who say it has democratized the gold market, paving the way for investors of all stripes to get direct exposure to the precious metal. Its nearly 1 million investors include ordinary individuals, institutions like Northern Trust Corp. and billionaire hedge-fund managers like John Paulson.

But skeptics argue GLD could become a Godzilla-like beast if the gold rally reverses sharply. They say its buying has already turbo-charged gold prices, exposing the market, and legions of small investors, to a rapid fall. Smaller copycat funds add to the risk.

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"We tell our clients to watch out for it, because it's there, and it's a real risk," said Jeffrey Christian, founder of CPM Group, which advises major investors worldwide on gold.

The questions come as ETFs in general are coming under heightened scrutiny about whether they distort markets. ETFs are wildly popular and growing fast, spanning stocks, bonds and hard assets. But they have made it possible for far more money to rush in and out of previously illiquid markets.

GLD shares trade on the New York Stock Exchange, as well as in Tokyo, Hong Kong, Singapore and Mexico City. Each share represents one-tenth of an ounce of gold. That, in effect, gives shareholders the right to their share of proceeds from selling a full bar, minus fees. Before GLD issues new shares, it takes in the necessary gold to back them. On days when there are more sellers than buyers of GLD shares, the fund offloads some of its gold.

Created under the auspices of the World Gold Council, the fund relies on a number of partners. It is marketed under the banner of State Street Global Advisors, which has fund-selling expertise. HSBC PLC stores and protects the gold bars. Bank of New York Mellon Corp. handles daily operations, such as calculating the fund's net asset value. For all its size and breadth, fund managers say, it's relatively simple to operate. BNY Mellon, for instance, needs roughly a dozen employees to run the fund day-to-day.

That has helped make it a windfall for all involved. The gold council, which spent $14 million developing the fund, has reaped about $150 million from its inception through Sept. 30. Its revenue is a percentage of net asset value, set at 0.15%. State Street has the same terms and also collected about $150 million in that time. Both are on track to bring in more than $80 million in the coming year if GLD stays at today's size.

The success owes much to timing. The council launched the fund as interest in gold was picking up, first because of inflation worries and then as a safe-haven against financial disasters. Since then gold prices have more than tripled from $444.80, setting a record high—though not adjusted for inflation—of $1,409.80 on Nov. 9.

The recent rally has been driven by many factors, of which GLD is just one. The U.S. dollar has steadily lost value, so some investors have bought gold as a hedge against the greenback. Tapping new ore veins is getting harder. Gold has benefited at once from fears of economic stagnation after the financial crisis and concern that government spending on the recovery will trigger inflation.

GLD, though, is widely seen as amplifying those trends.

Buying fund shares is easier and cheaper than investing in gold futures or buying coins. And GLD has now locked up nearly 1,300 metric tons of the world's gold supply, making the market tighter. The fund's impact has won it a following in the gold industry.

"It's got the gold price up," said Nick Holland, chief executive of Gold Fields Ltd., a major mining company and a member of the gold council. "That's got to be good."

Calculating the impact of GLD and its brethren is far from an exact science. But industry observers including Mr. Christian and Philip Klapwijk of GFMS Ltd. estimate gold-backed ETFs have probably added about $100 to $150 an ounce to the price of gold as a result of the incremental increase in demand.

Translated, that would mean gold-backed ETFs have increased the value of the bullion that gold miners will produce this year by up to $9 billion.

Many investors believe gold has much further to rise. But after a 10-year, one-way ride, others worry there could be a violent reversal down the road. The gold market hasn't been severely tested since GLD and similar, but far smaller, bullion-backed funds were launched.

And many GLD investors aren't experienced in gold investing. Between 60% and 80% of GLD investors had never bought gold before, estimates Jason Toussaint, managing director of the council. No one knows how those newcomers might react in a sharp downturn.

If GLD shareholders get spooked by drops in the gold price and sell en masse, the fund would have to dump metal to meet redemptions, possibly accelerating declines by prompting others to sell even more. Because GLD trades on an exchange, any selloff would be immediately visible, unlike typically opaque bullion sales.

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"We are more concerned about these issues than we were initially," said Scott Malpass, chief investment officer for University of Notre Dame Asset Management, which started buying GLD shares in 2005 and now has about $70 million invested. "It can turn on a dime. It can happen very quickly." For now, Mr. Malpass thinks the advantages of investing in gold outweigh the risks and the fund is properly managed.

In the fund's planning stages, the world's miners had modest ambitions.

Gold prices were just starting to stir from a 20-year bear market and many companies were struggling to break even. Hurdles to gold abounded. It was hard to purchase, store and insure. Some investors chose to own stocks of gold miners.

The council had long focused on gold jewelry, which represented over 80% of demand but exposed the industry to economic downturns. In 2002, after the Sept. 11 terrorist attacks, jewelry demand for gold dropped 11%.

Attracting investors, the industry concluded, was the way to go. Mr. Thompson, the chairman, wanted a CEO for the council who would have credibility with American investors to help implement the vision. He zeroed in on James Burton, who at the time headed the California Public Employees' Retirement System, one of the biggest institutional investors in the world. Calpers had no direct investments in gold.

In July 2002, Mr. Burton flew to meet Mr. Thompson in London. Mr. Burton was skeptical, but curious. Their discussions lasted 12 hours—including talks over a round of golf, two rounds of beers and meals. Mr. Thompson gave an overview of the gold market, and a pitch for why the moment was ripe to attract retail investors. By the end, Mr. Burton was hooked.

In August 2002, Mr. Burton, who had left Calpers, took over the gold council and immediately slashed 60% of the 108-person staff, closed half of the 22 offices and set about creating what became GLD.

The gold council wanted a product that ordinary investors could buy and sell just like a stock. The challenge was to make shares track the gold price, much like an index fund. The eventual solution was to create a trust to serve as the legal owner of GLD's gold bars.

Products were launched in Australia and the U.K. But getting a U.S. version took longer than the council expected.

The mining community backed the idea, but worried it might cannibalize demand for gold-mining stocks. Since it was to be the first U.S. fund entirely backed by a physical commodity, regulators also sought to understand how the concept would work. The Securities and Exchange Commission spent months seeking information about the product and the gold market, say Mr. Burton and Mr. Thompson.

The gold council also needed to hire assorted players—a trustee, a marketing agent and a vault operator. That process wasn't seamless, either.

Barclays PLC worked for months on the project, then withdrew and built its own fund, the iShares Gold Trust, which also holds bullion. Barclays sold the iShares exchange-traded fund business to BlackRock in June 2009, and its smaller gold fund has since become an intense competitor.

The council also wasn't sure how successful the fund would be, and paid UBS Securities $4 million for underwriting the first 2.3 million shares of GLD, according to regulatory filings. UBS declined to comment.

"I thought it would take a lot more marketing effort to convince people to buy gold in a securitized form," said Mr. Burton.

But as GLD opened, the pent-up investor demand erupted. The fund hit $1 billion in assets in three trading days, and $10 billion in just over two years.

"It grew pretty quickly," said Jim Ross, head of exchange-traded funds for State Street. The firm manages 120 exchange-traded funds, as of Sept. 30, and the SPDR S&P 500 fund is the only one larger than GLD. "The fact that's our second-most successful product is still surprising to me, frankly," Mr. Ross said.

The sniping at GLD also began early. Some gold investors questioned whether the fund held as much bullion as it said it did, eventually prompting the council to post on its website audit reports by an independent firm, Inspectorate International Ltd., which conducts two counts each year of GLD's gold bars in London.

A segment of the gold-investing community still prefers to secure a personal stash. Some want to be able to get their hands on their bullion in a hurry, particularly in the event of a severe crisis. Gold-vault operators are cutting fees to lure such investors.

Rivals also highlight worst-case scenarios the fund could face. Ben Davies, chief executive of London-based Hinde Capital, which oversees a gold fund, noted that GLD's bullion isn't insured. If the gold "is lost, damaged, stolen or destroyed," the trust "may not have adequate sources of recovery," according to the prospectus.

Mr. Toussaint said the council believes HSBC's security measures and the bank's other liability coverage provide protection. "That's the whole reason we put it in a vault in the first place," he said.

Despite GLD's success, even those involved in the fund acknowledge the rally will eventually end. "We don't believe gold is always going to go up," said State Street's Mr. Ross. "No investment does."