Owner: Wealth Building Strategies URL:http://cathypareto.blogspot.com/ Join Date: Mon, 07 Apr 2008 13:02:24 -0500 Rating:0 Site Description: Investment and Financial Planning insights to maximize your wealth building strategies provided by Cathy Pareto, CFP, AIF, MBA. Site statistics:Click here
Is It Time To Abandon Stocks? 2008-03-28 21:01:00 It’s not unusual to hear prognostications of doom and gloom when the markets are in disarray, as they have been for several months now. A front page article on the Wall Street Journal this past week would indicate that stocks might be in store for a ten year lull, in other words, dead flat performance. If you read the headline alone (“Stocks
Tarnished by Lost Decade: U.S. Shares in Longest Funk Since 1970’s), you might just consider running for the exits in a fit of panic. But, should investors worry and should they consider abandoning equities for safer bets? Not quite, here’s why. Read more:Abandon
Economic Stimulus Plan - Are You Getting a Check? 2008-03-27 11:18:00 So you think you're getting an IRS check in May? You may not qualify depending on how much you made last year.The media has been talking about payments being mailed starting in May, and yes these payments will range from $300 to $600 for individuals and $600 to $1,200 for joint filers, but will you get a check?Phase Out of the Stimulus Payment Both the basic component and the additional funds for qualifying children begins to phase out for individuals with adjusted gross incomes (AGI) over $75,000 and married couples who file a joint return with AGI over $150,000. The combined payment is reduced by 5 percent of the income above the AGI thresholds.You can find out if you qualify and how much you will receive by using the IRS calculator If you do receive a check use it to pay down your de Read more:Check
, Economic
Foreign Bonds in a Declining Market and Low Interest Rates 2008-03-25 09:41:00 The debt of developed foreign countries is looking more and more attractive lately as the FED continues its rate slashing bonanza in an effort to revive a dying U.S. economy. Inflation adjusted yields on U.S. based Treasuries are near the floor. Fixed income investors might be better suited to consider investments across the big pond, not only for greater yield but better diversification. Read more about it in this Business Week article, where coincidentally, I happen to be quoted. ;-) Read more:Bonds
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Don't Let the Bears Spook You 2008-03-18 16:33:00 Watching the markets free fall is not fun. It's hard to resist being captivated, or terrorized by the news lately. But, keep your eye on the long term prize, or you may find yourself making silly and costly mistakes.To quote the influential economist and professional investor, Benjamin Graham, "The investor with a portfolio of sound stocks should expect their prices to fluctuate and should neither be concerned by sizable declines nor become excited by sizable advances.” Wise words from a wise man, but that sound advice does not lessen the pain investors might feel during turbulent market times. Emotions can play tricks on you when it comes to your money, after all, we are only human. But, while 2008 is a market year we’d rather forget, the reality is it’s not one that is likely Read more:Bears
A Victory for the Little Guy in 401k's 2008-03-03 21:54:00 The U.S. Supreme Court unanimously upheld the right of workers to sue over losses in their 401k retirement-savings accounts in certain circumstances. Previous case law allowed participants to sue employers over losses on behalf of the retirement plan as a whole. Employers have argued that (employee) participants couldn't file the same kind of suit over losses in 401k's individual accounts because they didn't represent losses to the plan itself. The Supreme Court disagreed. This opens the door to employees suing plan sponsors (company owners and plan trustees) fiduciary breaches and economic losses resulting from such a breach.Stay tuned for more... Read more:Victory
King of Financial Porn Turns Over a New Leaf 2008-02-26 16:24:00 Could it be? The world's most insane financial "guru" has changed his mind? "Mad Money" host Jim Cramer, CNBC's poster child for active stock trading, has had a change of heart. He no longer endorses stock picking for individual investors and warns that beating the market on a consistent basis is next to impossible to achieve. You can read all about it in his new book.To quote: "Times have changed, he writes. Now, partly due to new regulations on how much information executives can reveal to fund managers, "trying to game short-term movements in stocks (is) almost impossible," he says.Do I hear the benefits of indexing implied in that statement? Oh my goodness....pigs are flying!Read it here yourself: read some of my thoughts on the "artist formerly known as Jim Cramer" click here. Read more:Financial
What's on client's minds? 2008-02-19 20:44:00 Ninety-one percent of 427 accountants surveyed in December by the American Institute of Certified Public Accountants of New York reported that their clients' No. 1 financial worry was retirement. The cost of health care was No. 2, followed by paying for their children's education.Thirty-two percent of respondents reported that clients approaching retirement age were postponing leaving the work force for financial reasons.61% of American workers are “at risk’ of not being able to maintain their current standard of living after they retire, noted research from the Center for Retirement Research of Boston. The cause of the dip in living standards was the cost of health care. Even if employees remain working until 65, fully 44% will not be able to maintain their desired standard of living. Read more:minds
Target-Date Funds May Not Be So Great for You 2008-02-04 12:31:00 Easy to understand and easy to invest in is not always the best choice to reach your retirement goals.Today's Wall Street Journal featured an article about how target-date mutual funds may not always hit the mark for every investor. While easy manage, there are some drawbacks. They sort of remind me of the catchy rotisserie oven infomercial where the guy repeats his tagline a million times, "set it and forget it".The positive of these funds: ease of use, ease of acquisition especially for less experienced investors. The negatives: lack of investor control, asset allocation may not be appropriate or ineffective, portfolio risk may be unknown.But, the most troubling part is that there is that few target-date funds have track records showing how well they protect shareholders during a market Read more:Funds
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Are the Joneses Keeping You From Building Your Wealth? What You Can Do To To Change It 2008-04-08 17:49:00 by Karla Arguello, MBAIt's hard to pin down when it happened but it happened. At some point, society subtly taught us that we are what we have or what we own. And thus the race to keep up with the Joneses began, making you go on shopping sprees that you couldn't afford, and racking up debt you will have a hard time paying off. That ever present feeling that you had to keep up with the Joneses has kept you from building the wealth you deserve, and for what? For the short lived thrill of having the sexy car, the latest cell phone, the hip lap top, the coolest clothes and the biggest house? While it can be exhilarating to buy the latest "it" item, the products themselves or the feeling you'll get from buying those items will not last very long. And unfortunately the damage to your wallet will Read more:Building
, Change
, Wealth
Looking for real estate abroad? 2008-04-30 13:18:00 The U.S. credit crunch and financial meltdown is pushing a growing number of American real estate companies and investors to look outside the United States for opportunities. My recent article on Investopedia.com addresses these opportunities. Check it out here.
Q&A Forum.....from a reader 2008-05-07 08:41:00 My wife has stopped working to raise our children. Can I make retirement contributions for her if she does not work outside the home? Being a stay at home mom should not preclude anyone from saving for retirement. I encourage all couples to maximize their savings as much as possible. If a married person does not work, he/she may in fact contribute to a spousal IRA as long as the couple has compensation that equals or exceeds the contributions to the IRA of both persons. A nonworking spouse can make an IRA contribution of up to $5,000 for 2008 ($6,000 if age 50 or older as of 12/31/08) as long as the couple files a joint return. Compensation Limits/DeductibilityFor a traditional IRA, there is no limit on the amount you earn in order to contribute to a spousal IRA. If neither spouse Read more:Forum
Inflation Numbers from a Parallel Universe? 2008-05-18 10:37:00 What planet does our government live on? According to the government's most recent Consumer Price Index, a key inflation reading, consumer prices rose 3.9% in the 12 months ending in April, down slightly from the 4% annual inflation rate in March despite record gasoline prices. I would argue the REAL numbers are much, much, much higher.The feds conveniently eliminate food and energy costs from t Read more:Inflation
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Are You Investing or Speculating? – Your Answer Could be Detrimental to Your Future Wealth 2008-05-28 11:51:00 by Karla Arguello, MBAOil prices are high, real estate is down, the dollar is flat, unemployment is high, your investments are down, and no one really knows what’s going to happen with the elections in November. The future is uncertain to say the least, and for many the fear of uncertainty can lead them to make poor investment decisions that will have a rippling effect into their future. It is t Read more:Future
, Investing
, Speculating
, Wealth
Women and Money 2008-06-11 21:06:00 When it boils down to fundamentals, planning for women is not much different than planning for men. After all we share common goals: wealth maximization, risk minimization and cost containment. Both ought to strive for an optimal investment mix and both should start investing for retirement at an early age to take advantage of compounding. So, with regard to investing, there is no difference b Read more:Money
, Women
It sure feels like a recession, but... 2008-06-16 21:57:00 Though popular definitions vary, the term "recession" generally refers to a period of more than a few months of declining gross domestic product. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP). A national recession can't be confirmed until the economic data show that the overall economy is in de
Are Markets Still Efficient? 2008-06-22 15:42:00 In recent years, many financial economists have come to question the efficient market hypothesis. I wonder what some of the brightest minds in finance might say about that?According to the most successful modern-day investor, Warren Buffett, "most investors, both institutional and individual, will find that the best way to own common stocks ... is through an index fund that charges minimal fees. Read more:Markets
If My Bank Fails Will I Lose My Money? 2008-07-16 19:20:00 The answer to this question really depends on how much you have at your bank. Thankfully, the Federal Deposit Insurance Corporation (FDIC) established by the Banking ACT of 1933, protects you against some losses should your bank fail. How much protection do you get? The FDIC protects you up $100,000 and up to $250,000 for IRA accounts.If you have more than $100,000 you may still be fully insured Read more:Money
Thinking About Borrowing from Your 401K? 2008-07-16 15:57:00 Thinking of tapping into your 401k plan to pay debts, buy a car, or to refinance your mortgage? Think again! Given the current real estate, stock market, credit crunch, and unemployment rate, it is tempting to want to borrow from your 401K but borrowing from your 401k can have disastrous consequences on your finances. If you are currently unemployed and have absolutely no other option to survive t Read more:Borrowing
Understanding Mutual Funds Share Classes and Their Costs 2008-08-02 22:55:00 by Karla Arguello, MBATo the unsuspecting investor, all mutual funds might look the same. In fact they are not. With over 25,000 mutual funds now available in the marketplace, it’s important to understand how one fund might vary from its peers. Mutual
funds come in all shapes and sizes and often represent distinct categories of the market. This article will focus on the differences in cost s Read more:Classes
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A Deeper Look At Alpha 2008-08-20 15:32:00 So what is Alpha
and how does it relate to your portfolio’s performance? As an investor these are very important questions to ask so let’s explore the concept together. In " A Deeper Look At Alpha" written for Investopedia.com I discuss what it is, what it measures, and what you should know about it. Link:-theory/08/deeper-look-at-alpha.asp
The Ultimate Gift 2008-08-17 20:11:00 Money—it’s such a simple, yet potent word that can invoke many different emotions, thoughts, fears and dreams in so many people. We all seem to want it, but most of us for different reasons. For some it’s the means to a better life or survival, for others it’s about power, control, vanity….or simply having things. I’ve never given much thought to the meaning behind it all—the mea Read more:Ultimate
Pigs Get Slaughtered....and Investors Pay the Price 2008-08-13 08:55:00 Just when you think Wall Street couldn't get any greedier....last Friday UBS became the third major firm in a week to agree to buy back auction rate securities, in an effort to save its skin from allegations of wrongdoing over its sales of the product. Merrill Lynch and Citigroup were already in the hot seat. Collectively, the three firms have committed to taking back a total of more than $36 BI Read more:Investors
Retirement Account Rules Catch Many by Surprise 2008-09-02 20:43:00 When it comes to retirement accounts we can't forget RMD's (Required Minimum Distributions). Forgetting can cause you a great deal in penalties. Thankfully, you don't have to think about this until you have reached the age of 70 1/2. Still, for those who have to calculate the amount every year it can be quite annoying but it's really not an option. When I show people on paper what the penalty woul Read more:Account
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What Should You Do With Your 401k? 2008-10-16 10:12:00 This video was produced by Chuck Fadely for the Miami HeraldClick here to start the video "What Should You Do With Your 401K?"
7 Good Reasons to Fire Your Adviser 2008-10-14 20:51:00 1. You Feel Like a Little Fish in a Big PondEver gotten that feeling that your Adviser could care less whether you stay with him or her? The reason may be simple; your account is too small for them now. They may have treated you like royalty when you first became a client, but now they barely return your phone calls. This is a very common phenomenon and it's happening more and more as firms contin Read more:Reasons
This is NOT the Depression... 2008-10-11 12:23:00 Part of the hysteria that we are experiencing can, in part, be blamed on the overused comparison to the Great Depression. My goodness, pundits and financial media are using the "D" word like it's going out of style. We are NOT in a Depression people!Here are some great blurbs from today's Wall Street Journal to give us some perspective:(Source: Wall Street Journal, Jason Zweig "What History Tells
What Should You Be Asking Your Adviser Right Now? 2008-10-10 14:08:00 For many investors the current markets feel like a high speed roller coaster without a stop in sight. While we may have enjoyed the thrill and fear we felt going through loops and drops as children, as adults we simply can no longer stomach the ride. To make matters worse, this experience can be even more painful by going on the ride alone, or even excruciating by going on the ride with the wrong Read more:Right
Madness in the Markets!!! 2008-10-10 07:55:00 This bear market is none like I've ever experienced. It is painful to live through this, that's true. But it's more painful to watch the absolute stupidity of our leaders and their lemmings (us...as citizens of this great country and investors in our markets). My friend Jay Patel said it rather succinctly on his blog: are over 3 trillion (that's trillion with a capital "T") dollars waiting around Read more:Madness
, Markets
What the FDIC Changes Mean to You 2008-10-08 10:55:00 It’s official. FDIC insurance has increased. On October 3, 2008, FDIC deposit insurance temporarily increased coverage from $100,000 to $250,000 per depositor through December 31, 2009.Basic FDIC Deposit Insurance Coverage Limits Single Accounts (owned by one person)-- $250,000 per owner Joint Accounts (two or more persons)-- $250,000 per co-owner IRAs and certain other retir
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