Mon, September 15, 2008
Douglas Adams' Hitchhiker's Guide to the Galaxy described a fictional intergalactic travel manual of the same name. The guide had the words "DON'T PANIC" written "in large friendly letters" on its cover. Investors could use a copy of the Hitchhiker's Guide right about now. Read the full article
Thu, September 11, 2008
The Federal Reserve Bank of Boston recently issued an interesting analysis of the nature of the subprime mortgage crisis in Massachusetts. Using data on mortgages, home equity loans, and deeds recorded between January 1987 and March 2008, the researchers were able to examine in detail the nature of the loans that ended in foreclosure. Some of their conclusions are surprising, while most fall in line with what one might have guessed. Read the full article
Thu, September 11, 2008
As the graph below from BlogPulse.com shows, the announcement of the Fannie-Freddie takeover generated a burst of activity in the blogosphere.
In perusing some of the posts on the topic, it looks as though a lot of people are upset at what appears to them to be a bailout. In fact, it is a bailout, but at this point in the game, I think the U.S. Treasury really had very little choice. Read the full article
Wed, September 10, 2008
Finally, I've gotten around to establishing a blog roll for web logs related to things I write about here. I'm inaugurating it with three selections and I thought I'd let my readers know a bit about each one. Read the full article
Mon, September 08, 2008
The Treasury Department's much-anticipated plan to prop up Fannie Mae and Freddie Mac has finally been (mostly) revealed. The move should help a bit to keep mortgage markets afloat, but if you're not sure what all the fuss is about, this short primer should help.
Read the full article
Thu, September 04, 2008
Predators keep an eye out for weakness in their prey. Now that many lenders have left the educational loan market, students and parents will have a harder time finding loans. It's likely that con artists will take advantage of the situation by cranking up the level of phony financial aid and loan solicitations. SmartMoney.com has a helpful article that decribes college funding flim-flam schemes. The article also points out some useful resources for families seeking scholarships and other sources of college funding.
Read the full article
Thu, September 04, 2008
Most financial planners advise their clients to have money set aside in an emergency fund. Occasionally my clients ask me why they need to keep money on hand for emergencies.
If you’re like most Americans, once you’ve paid your credit card bills, mortgage, and your other bills, there’s not much left of your paycheck. If you’re someone who lives far below his or her means (by this, I mean that you have two or three thousand dollars a month or more left unspent from your income every month) you have the capacity to cover many typical unexpected expenses, like the sudden failure of your heating system in the middle of winter. If that's your situation, you’re in a position to cover emergency expenses from your cash flow – unless the emergency happened to be the loss of your job, in which case you’d still be in trouble.
The fact is, though, that few households have large amounts of cash flow that go unused from month to month. Read the full article
Wed, September 03, 2008
Master Limited Partnerships are complicated investments in which you share in the profits from an income-generating business. Most often these partnerships make their money in energy-related businesses. They’re publicly traded and offer certain income tax benefits. They aren’t for everyone, however. Read the full article
Wed, September 03, 2008
As a result of a class-action suit against the Transunion credit bureau, consumers can obtain six to nine months of free credit report and credit score access if they qualify for inclusion in the class. Read the full article
Fri, August 29, 2008
Last week, state regulators closed down the Columbian Bank and Trust Co. of Topeka, Kansas. It was the ninth bank failure thus far this year, and probably not the last. I've written several posts recently on FDIC insurance of bank accounts and CDs, but many investors have far more money in their retirement and brokerage accounts than they do in banks. Since FDIC doesn't cover these assets, should you be worried? Read the full article
Mon, August 25, 2008
Although I’ve been slow to notice it, I’m now certain that it’s true: our food is shrinking.
More precisely, the companies that sell food and consumables are putting their goods into smaller packages and hoping that we won’t notice. Read the full article
Wed, August 20, 2008
Although gas prices have retreated from their highs, the recent surge over $4/gallon is not yet a distant memory. Gas prices have us thinking more about how much we spend on gas. Does it make sense to trade your car in for a fuel-sipping hybrid? Read the full article
Tue, August 12, 2008
Jobfox.com, a site that helps match professionals with potential employers, generates a monthly list of the 25 professions most in demand. The site recently released an analysis of twenty professions that have remained in high demand despite the recent slowdown in the economy. Read the full article
Wed, August 06, 2008
Today’s post continuues Part 1 with a further explanation of this rapidly-growing alternative to the mutual fund.
In my initial post I explained that ETFs
- are created by financial institutions in large blocks that can be freely converted into underlying securities
- are transparent, meaning that the underlying securities are publicly disclosed on a continuous basis
- trade continuously on financial exchanges at prices that generally move closely with the underlying securities
- are generally liquid, reflecting the liquidity of the underlying securities
- are usually (but not necessarily) linked to a securities index
- tend to have low management costs
Read the full article
Tue, August 05, 2008
Several MA cities, towns, and the Mass Turnpike Authority received some investment help from Attorney General Martha Coakley recently. Although it's often assumed that institutional investors are sophisticated in their understanding of investments, the case initiated and settled by the Massachusetts AG shows that even "big" investors sometimes fail to follow one of the cardinal rules of investing: make sure you understand what you're investing in. Read the full article
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