Tuesday, December 29, 2009
Monday, December 21, 2009
Wednesday, December 16, 2009
Monday, December 14, 2009
Tuesday, December 8, 2009
1. Stocks are no longer king
As share prices keep rising, blogs and investor chat rooms crackle with rancorous shouting matches between folks who say the gains are justified and those who deride the charge in the Dow Jones Industrial Average from 6,500 past 10,000 as a "sucker's rally." But the rally is legit because, at 6,500, stocks were priced for a disaster that never occurred and because many sectors of the economy have improved noticeably since the darkest days of the crisis...
2. Diversification has changed dramatically
Once, you could fight a down market with counterweights like real-estate investment trusts, high-dividend stocks and foreign stocks. In 2000 and 2001, for instance, many small-compand and value funds and overseas stock funds made money even as the large-capitalization U.S. stock indexes tanked. During the 2007-09 bear market, virtually every asset class save Treasury bonds fell in unison. As a result, many experts have declared diversification a failure...
3. Cash is never trash
Forget that cash, in the form of money market funds and bank savings accounts, pays next to nothing. Yields will nudge higher once the Federal Reserve lets go of its free-money policy. But even if that enables you to collect just 2%, never again should you equate cash with garbage...
4. Regulators will be more visible
More oversight is coming, and it will go beyond executive pay and fixing bank balance sheets. After Congress finishes dealing with health care, it will establish a financial-protection agency for consumers, increase regulation on private-equity investors and hedge funds, and generally try to discourage the financial industry (in the U.S., anyway) from concocting inscrutable, high-risk stuff. There's an excellent chance that future Madoffs and Enrons won't be able to dodge the law for so long...
5. Catastrophes won't wait 100 years
Some people have likened the recent disaster to a 100-year flood, suggesting that we are unlikely to suffer another event so serious for a century. The problem with this 100-year cliché is that it's never been true. And now it is utterly implausible...
6. Commodities will be more important
Gold isn't the only tangible asset that has racked up big gains in 2009. Cocoa, coffee, copper and frozen pork bellies, to name a few others, are also in rollicking rallies. The breadth of the advance reinforces the idea that investors will want to make more room in their portfolios for stuff as well as securities, regardless of whether they're trying to reduce risk or are angling for big gains. It's not that commodity prices are predictable. They can react to the weather, world politics and currency exchange rates. But because it's become a lot easier to invest in commodities, it's a good bet that they will play an ever-larger role in savings programs...
7. Bonds will be less volatile
This sounds like double talk, given that rising interest rates cut the value of existing bonds by making new, higher-yielding bonds more desirable. And rates look to have only one way to go, which is up. Clearly, holding a long-maturity Treasury bond that pays less than 4% is a dicey proposition...
So Portland, let me know what your thoughts are on this article by leaving some comments in the section below.
Monday, December 7, 2009
Tuesday, December 1, 2009
1. Being blinded by bargainsSo Portland, in closing it is okay to make mistakes. Just take a look at these famous people and their mistakes. With this year being hard on a lot of people, take advantage of these tips and learn from past mistakes. As always please feel free to leave comments in the section below.
"It was 60% off! How could I pass that up?"Sound familiar? But just because something is a good deal doesn't mean it's a good deal for you. With so many discounts this season, it's easy to fall into the trap of buying something simply because it's on sale. You may spend more than you normally would have or end up with a closet full of cheap, unnecessary stuff. Stay focused by drawing up a budget and gift list before you head to the stores. Write down everyone you need to buy for, along with the amount of money you're willing to spend on each person. Then jot down gift ideas for each person on your list. An hour of forethought can save you a bundle in the long run.
2. Forgetting to budget for the extras
Gifts aren't the only expense this time of year. Don't forget to factor in the costs of greeting cards, postage, family photos, shipping, décor, entertaining and travel.Even the utility bills for your festive outdoor light display might turn out to be an unpleasant January surprise.
3. Buying on creditFinancial experts say those who shop with credit cards tend to spend as much as 30% more than if they'd shopped with cash. The reason: When you shop with cash, you're more aware of how much you spend and how much you have left because you can touch it. And once the money's gone, it's gone. Plus, if you have to put the purchase on your credit card or sign up for the store's financing, you simply cannot afford it. Any good deal you thought you were getting will be eroded by the interest you'll accrue and the time you'll spend as a debt hostage. About 12 million Americans are still paying off last holiday's bills, according to Consumer Reports.
4. Not keeping the receipts
Don't you hate it when you buy something only to find the store puts it on sale the following week? Hang on to your receipts. Many retailers will honor the sale price if you had made the purchase within a few weeks and will refund you the difference. Keep your receipts, also, in case you or a loved one needs to make a return. Without a receipt, you may only get store credit -- or your return could be refused altogether.
5. Spending to impress
This is a biggie, especially for young adults who may feel compelled to prove their success and their new independence. Don't let your gift giving become a larger statement than the gift. Before tossing something in your cart, ask yourself if it's something the person will really use and if you can really afford it. And the same goes for entertaining. It's the company of friends that matters, not how much money you spend.
It's wonderful to get caught up in the spirit of giving, but not if that means you'll break your budget or go insane trying to pull it off. You don't have to buy something for every single person you know (co-workers, neighbors, newspaper deliverer, that nameless guy you make small talk with at the bus stop). Stick to the people who count most in your life, such as family and close friends. You might even suggest drawing names among groups of co-workers or relatives to whittle your gift list further. Chances are others are feeling the strain, too, and will welcome the idea.
7. Giving in to gift guilt
Don't let guilt drive you to break your budget or go into debt. You don't have to spend the same amount of money on every kid on your list, for example. Giving thoughtful, age-appropriate gifts is much better. You also are not obligated to give a gift that has the same monetary value as a gift someone gave you, says etiquette expert Peter Post, or even to reciprocate unexpected gifts. Simply accept the gift and say thank you.
8. Failing to do your homework
That discount looks like a good deal, but do you know if it's the best value for your money? Remember, inexpensive sometimes just means cheap. Hit the Web before making major purchases to compare prices, read customer reviews and make sure you're getting a quality item at a good price. Check the Web for coupons, too. Many retailers offer coupons you can print and take to the store, or you'll find e-coupons to save on your online purchase or your shipping costs.
In the frenzy of last-minute shopping, you have no time to give thoughtful presents. So you compensate by spending more. If you're shopping online, aim to make your purchases by mid-December. That way, you won't have to pay extra for expedited shipping, and your gifts stand the best chance of arriving on time.
10. Giving fruitcake
And for heaven's sake, don't waste your money on a bad gift. You may as well toss your money on a blazing yule log. Here are some common gifting gaffes to avoid:Gadgets they'll never use: golf-ball-finder glasses, battery-powered potato peeler.
- Desk clutter: "gone fishing" plaques, Zen gardens, paperweights.
- Overly personal: lingerie, nose hair trimmers, weight-loss books.
- Thoughtless: cookies for the diabetic, wine for the recovering alcoholic or the same gift for the same person two years in a row.
- Tacky: holiday apparel, stuffed animals for anyone over age 10.
- Clichéd: snow globes, coffee mugs, Chia Pets and, yes, fruitcakes.