Oct
6
Are Scandals Inevitable in Regulated Industries?
October 6, 2008 | 1 Comment
… This idea came to me as I was reading another chicken little article. It's interesting to note how the most dire predictions (and the schadenfreude accompanying it) comes from the international media. A lot of Western Europe is hoping the US loses its footing.
Note how Will Hutton characterizes the crisis:
This is a crisis that has been 30 years in the making - a Gordian knot of libertarian free-market fundamentalism, unregulated globalisation, the collapse of social and political …
Oct
3
Back To Basics
October 3, 2008 | 1 Comment
… think the next Great Depression is around the corner. I believe the likelihood of that is low. However, we should prepare for it.
We should save and invest like the Great Depression is around the corner. Why? Because it will keep our financial lives in order.
If you knew the Great Depression was coming in 5 years, would you buy a house with an adjustable rate mortgage that you couldn't afford, with the hopes of being able to pay for it in 5 years. Of course not, you know the …
Oct
2
Warren Buffet On the Credit Crises
October 2, 2008 | 2 Comments
… look them in the eye.
Common sense investing should protect us from the reach of fortune as much as possible. Markets will rise and fall and rise and fall. Is your boat (money) in a safe harbor (Cd's, bonds, savings) or is it riding the waves and shaking it's fist at the gods.
Diversification is the key. Your holdings in the stock market should probably be a minority percentage of your overall wealth. Or you could believe Wall Street. They've got risk covered. Err, …
Comment by Back To Basics - Wealthy Reader: … wisely. Save as much as you can. Don't spend [...]
Sep
26
Wall Street No Longer Exists
September 26, 2008 | Leave a Comment
… I'm just a mildly interested speculator. Sure I have money in the stock market but there isn't much I can do now.
The most important thing I can do is to limit my losses now. The second is to take this as a lesson. Risky investments (like the stock market) are risky for a reason. I'm not against people investing in high risk ventures, I'm against 401(k)'s who get people into such ventures. How many people would be in the stock market right now without 401(k)'s and Roth IRA's? …
Sep
21
Why Money Market Funds Aren't Safe
September 21, 2008 | Leave a Comment
… government ( FDIC ) will insure your money up to a certain limit, usually no less than $100,000.
However with with money market funds that's not the case. Money market funds are mutual funds whose sole purpose is to act like a checking/savings accounts. Usually they pay interest. The main goal of a money market is to preserve wealth. A dollar buys one share and the money invested should always be worth be worth at least a dollar.
Note: Your money market account may be FDIC …
Sep
17
Stocks for the Long Run
September 17, 2008 | 1 Comment
… about 33% since 1999. The S&P 500 has been stagnate for about that long.
You would have much more today if you had stashed you money in savings accounts, real estate and CD's. Most of my wealth is accounted for by cash and real estate. The minority (and getting smaller :-)) is in stocks and corporate bonds through mutual funds.
I think buy and hold went the way of the dodo. When a portion corporate America is out to pillage the wealth that rightfully belongs to the …
Comment by Jeff: … "You would have much more today if you had stashed you …
Sep
17
No Second Stimulus Payment Yet
September 17, 2008 | 1 Comment
… and several law makers like Chucky "Cheese" Schumer have been lobbying for another payment.
However, both presidential candidates have come out against another stimulus payment. Obama wants a different program instead of sending money directly to people who could use it, he wants the money to go to the state and federal bureaucracies.
Despite the rumors you may hear on TV, another stimulus package is a long shot. Congress would have to pass another bill to authorize stimulus …
Sep
12
Evidence that the Stock Market is Efficient
September 12, 2008 | 1 Comment
… picked up on the news after it was published on Bloomberg. You can read the full story of how automation caused the price of United Airlines to plummet.
Many people are concerned about automatic trading. However, automatic trading systems are the reality of today's markets. PhD's in several fields have built such systems. The computers react within milliseconds to make trading decisions.
Based on the existance of these trading systems and the fact that we now have proof …
Sep
10
Why I'm not Contributing to my 401(k) at Work
September 10, 2008 | 2 Comments
… more in some future posts. As with all financial decisions, I'm requiring a waiting period. However, the worst that can happen is that I decide to contribute to my 401(k) again and that I have to fill out another form.
And just to head off this question, it doesn't have anything to do with current stock market performance. It has everything to do with paying high fees for poorly managed funds.
Comment by Robin: … I say lower it as much as you are able with out effecting …
Sep
9
The Stock Market Scam - Stock Options
September 9, 2008 | Leave a Comment
… then paid the first group of investors off with money from a second group. The second group saw how much the first group got and this encouraged a 3rd and 4th. You get the picture.
Why Are Stock Market Investors Getting Ripped Off?
Stock Options
No Dividends
Stock Buybacks
Stock Options
Management grants themselves stocks options. A stock option grants you a right to buy stock at a certain price (the strike price). So not only can management issue itself more …