The Conversion to International Standards [12/31/2008]
The evolution of accounting standards, beginning with Luca Pacioli’s creation of double-entry accounting, has always been a dry subject. But with events such as the Wall Street bailout, Enron and Sarbanes-Oxley, accounting standards have been a popular topic in the business press.
Six Defensive Moves in a Down Market [12/24/2008]
Market volatility is enough to give any investor heartburn these days. Although there have been some notable gains — the Dow Jones industrial average’s 889.4 point gain on Oct. 28 being one of the most impressive ever — most of the volatility has been on the downside.
Fair Game for Asset Values [12/17/2008]
If you want to know what a stock sells for, you look at its current market price. That price might be different from what it was yesterday or what it will be later today or tomorrow. But it’s what the stock is worth right now because it’s what you could sell it for. The value of an investment, in this sense, is determined by how interested other investors are in owning it at this moment.
Let Banks Bid for Your Savings [12/10/2008]
Interest rates are as low as they’ve been in ages on short-term savings options such as savings accounts, money market accounts and certificates of deposit. And with the stock market looking like the world’s largest roller coaster these days, lots of folks are especially interested in finding relatively safe places to stash some cash and still earn a reasonable return.
Painful Times Call for Common Sense [12/3/2008]
The third-quarter report from our friends at investment management firm David Wendell Associates in Portsmouth, N.H., provides a sensible look at the meltdown of financial stocks and what it means to world economies. The newsletter points out that we’ve survived similar periods and that long-term investors should continue seeking stocks of high-quality growth companies, many of which are trading at historically attractive valuations.
Rewarding Capitalism [11/26/2008]
I was too young to have ever seen Will Rogers appear on stage. Even if I had been old enough, my parents never could have afforded tickets to see him, especially for the entire family. Still, I read a number of remarks he made during his performances and enjoyed his down-to-earth humor and the clarity and common sense of his messages.
Home Economics [11/19/2008]
When headlines scream about financial calamity, and the future stability of Wall Street is far from clear, hunkering down at home seems awfully attractive. But what happens when your family finances are just as messy as those in the headlines? Where are all those generous bailouts when you need them for yourself?
Days of Whine and Dozes [11/12/2008]
Whiners have a holiday, and it probably was created because someone whined about not having a holiday. National Whiner’s Day falls on Dec. 26, presumably so we can salute those ungrateful crabs who always want what they don’t have on the day after they whimper endlessly over being (wrongfully, of course) gifted.
Constructing the Major Indexes [11/5/2008]
The best-known stock market indexes — including the Standard & Poor’s 500, Dow Jones industrial average and NASDAQ-100 — get a lot of attention in a bull market. They get even more when the markets turn bearish.
Defining Value [10/29/2008]
Value, like beauty, is in the eye of the beholder. As “a beggar’s dime is worth more than a king’s gold,” seeking value in the stock market is often subjective. Some investors think that a value stock should be a mature company; some think it has to trade at a low price-earnings ratio; and some believe that a high dividend yield is key.
Five From the Industrial Sector [10/22/2008]
When visiting clubs throughout the Mid-Michigan Chapter, I find that a common concern is finding small-company stocks to study. Most clubs understand BetterInvesting’s recommendation that these stocks account for one quarter of their portfolio, but club members have difficulty finding appropriate candidates to study.
It Figures: Auditing Your Club [10/15/2008]
What is the procedure for investment clubs to be audited? How often should a club be audited? Do you have any recommendations of auditors?
When Funds Make Waves [10/8/2008]
They’re not always profitable, but the buy-sell decisions of mutual fund managers nonetheless affect individual investors’ portfolios. Like giant tankers changing direction at sea, institutional trades create waves that can temporarily knock a stock off its long-term course.
Wall Street’s Animal House [10/1/2008]
When the stocks in your portfolio begin to climb in value, what’s your first thought? If it’s “What should I buy next?” you have a glimpse into what fuels a bull market. When investors are rewarded with rising prices — and are confident they can choose winners — they tend to buy more. That demand drives prices even higher, confirming their expectations and boosting their optimism. Strong returns, in turn, draw more investors as more money flows into the market.
Working With a Full-Service Broker [9/24/2008]
The 18 members of Apple Investments of Brighton, Mich., built their $400,000-plus portfolio using their stockpicking skills and double-checking them with their full-service broker.
The Forks in the Road to Investing Success [9/17/2008]
I’m sure you’ve heard the chestnut that the hardest choice isn’t the one between right and wrong but the one between two rights. When you’re faced with a decision between two potentially profitable investment strategies, how do you find the clarity that will leave you content with your selection?
In Praise of Speculators [9/10/2008]
Politicians are blaming speculators for the recent rapid rise in the price of gasoline. Speculators may indeed be raising oil’s price, but I’m not sure. If they are, however, they deserve our praise.
Taking Aim at Target Prices [9/3/2008]
What would make investing a whole lot easier? How about knowing what the price of a particular stock will be next year at this time?
Keeping Costs Down While Gassing Up [8/27/2008]
As if the lockdown on mortgage lending isn’t enough, now folks have to take out a home equity loan just to fill up their gas tanks. If you absolutely, positively have to get somewhere by car, you’ll want to find the cheapest gas around.
Advice for Recent College Graduates [8/13/2008]
In September recent college graduates are starting their first jobs. Parents sometimes ask us to give their children some general guidelines as they begin their working careers.
Little Common About Preferred Stock [8/6/2008]
There’s something about the word preferred that puts a smile on your face. It conjures images of better treatment, faster service and lower rates. It’s the antithesis of the ordinary, everyday, common experience.
The Perils of High-P/E Stocks [7/30/2008]
Financial journalist Jason Zweig has a well-known interest in behavioral finance, the study of how investors’ minds work — sometimes against their best interests. In his latest book, Your Money & Your Brain, he deals with the “story stock,” the must-have equity of the moment that only investors with the strongest convictions can avoid.
Worry Nationally, Don’t Overreact Locally [7/23/2008]
The majority of consumers over age 45 lost money in the stock market in recent months and fear the economic slowdown may worsen, but most aren’t taking drastic action with their stock investments, according to a recent survey by AARP.
Overseas Companies, Home Market [7/16/2008]
Diversifying your portfolio with international stocks isn’t just a smart idea. It’s also easy — especially if you invest in American Depositary Receipts.
Amazon’s POD Policy Threatens Its Value [7/9/2008]
The Wall Street Journal got it wrong. Amazon.com’s recent ruthlessness won’t lead to higher profits.
Computing Cognizant’s Potential [7/2/2008]
A well-balanced portfolio includes rapidly growing, relatively small companies as well as larger, more stable ones.
IRAs and Other Retirement Savings Plans [6/25/2008]
Last month we discussed 401(k) and 403(b) plans you can contribute to as an employee. This month we’ll review some of the other retirement plan options.
How To Market Investing to Teens [6/18/2008]
I learned a lot about public relations at a 1990 seminar where one of Exxon’s marketing experts explained how the company handled the 1989 Exxon Valdez incident. I walked away from PR and marketing that night and never returned; I didn’t have it in me to be a spin doctor. So the marketing magazine sample I received in the mail the other day came as a surprise.
Future Shock? Not for Earners and Retirees [6/11/2008]
Consumer confidence generally declines in an economic downturn, but retirees and those who generated their own wealth are less likely to feel nervous, according to two recent surveys.
Diving Into Foreign Bond Funds [6/4/2008]
As yields on high-quality bonds slip in the United States, more investors are turning to foreign bonds and foreign bond funds to boost portfolio yield and provide more diversification.
Bank Examiners [5/28/2008]
History tells us that when an economy gets sick — really sick — banks are usually at the heart of the problem. Which makes sense, of course, since a banking system is to an economy what the cardiovascular system is to the body.
A Return Performance Worth Watching [5/21/2008]
Whether you’re considering a new investment or deciding whether to hold or sell a security, performance is a key element in decision-making. In evaluating returns, however, it’s essential to know what you’re looking for. That’s just as true for exchange-traded funds as it is for individual stocks.
Nightly (or Anytime) Business Report [5/14/2008]
An increasing number of e-mails arrive in my inbox from folks asking how they can get the investment reports they want from Quicken software.
Bear on the Run [5/7/2008]
A classic bank run caused Bear Stearns’ mid-March fall. Here’s how a run works: Imagine that a small-town bank collects $30 million in deposits, then lends $25 million of it to homeowners.
Stimulus-Check Destinations: Debt, Savings, Investments [4/30/2008]
Twenty-five percent of those receiving checks as part of the government’s $168 billion economic-stimulus package plan to save or invest the money instead of spending it right away, according to a survey by Kansas City, Mo.-based American Century.
Sanofi-Aventis: High Yield, Low Valuation [4/23/2008]
The drug industry is in trouble — at least that’s what the stock market is telling us. Many of the world’s largest pharma companies are trading at multiyear lows, and all of them seem to be facing several problems.
Mitigating the Inherent Risk [4/16/2008]
Although regulatory agencies cover portfolio assets, clubs still need to educate themselves about fraud.
Investment Clubs [4/9/2008]
Longtime investors from several clubs review strategies for recruiting and retaining members.
Managing Risk With Asset Allocation [4/2/2008]
When the market is choppy, your natural inclination is to shake up your portfolio. But this generally isn’t the best way to improve your returns or overall portfolio quality.
Investors Eye International Stocks [3/26/2008]
Worried that the economy may slide into a recession this year, individual investors plan to protect their core assets by making conservative moves and monitoring opportunities among international stocks, according to a recent survey.
Selecting a Financial Planner [3/19/2008]
We often see the media using the terms financial adviser and financial planner interchangeably. But there are distinctions between the services each of these professionals provides. A financial adviser’s primary function is to manage your investments. A financial planner takes a more comprehensive view.
Building in Room for Error [3/12/2008]
The margin of safety is one of Benjamin Graham and David Dodd’s most enduring contributions to the world of investing. The two coined the term in Security Analysis in 1934, and Graham expanded on the concept in The Intelligent Investor in 1949.
A Special Support in Value Investing [3/5/2008]
When you’ve identified a company to add to your portfolio, the quest for value may take you in an unusual direction. Let’s assume you’ve evaluated a company’s fundamentals and determined the price you’re willing to pay, which is based at least partly on its discounted cash flow or the present value of the dividend income you estimate it should provide in the future.
ArcelorMittal Transforms Steel [2/27/2008]
During 2006 a large merger took place in the steel industry. Indian self-made billionaire Lakshmi Mittal started a hostile takeover battle for Luxembourg-based Arcelor. After months of negotiating the merger was completed and ArcelorMittal was created.
Investing in Funds: Playin’ the Fools Game? [2/20/2008]
I sold one of my blogs for a small fortune in January. After escrow wired the funds to my bank account, my friends and family wanted to know what I would do with the money.
Avoiding That Blogged Down Feeling [2/13/2008]
lenty of folks don’t feel comfortable managing their finances online. But even if you don’t want to use the computer to handle such sensitive tasks, there’s no reason to hesitate in taking advantage of all the information and tools available on the Internet.
Four Questions for Your Section 529 Plan [2/6/2008]
When you’re evaluating Section 529 college savings plans, make sure you thoroughly understand the features of their funds, advises Amy Buttell Crane.
Tracking a Small-Cap Baron [1/30/2008]
Tracking the stock buying of good mutual fund managers is one way to mine for small-caps, writes BetterInvesting editor Adam Ritt.
When Inexpensive Meets Opportunity [1/23/2008]
BetterInvesting-style investors spend their time seeking growth stocks. But value investing is another proven strategy, dating back to the days of Benjamin Graham and David Dodd, authors of the seminal investing book Security Analysis in 1934. Graham and Dodd warned that anyone who paid more than 16 times earnings for a company would be “likely to lose considerable money in the long run.”
Beyond the Buzz [1/16/2008]
Timothy Geithner’s speech discusses various types of liquidity, how liquidity is measured and how monetary policy determines liquidity levels.
Value Investing: Bargains With Caveats [1/9/2008]
BetterInvesting methodology relies on studying a company’s revenues, earnings and other fundamentals in a search for quality growth companies whose stocks are selling at reasonable prices. Another type of fundamental investing seeks so-called value stocks.
The Case for Core Earnings [1/2/2008]
A few years ago, before the Enron “surprise,” we all trusted corporate financial statements, and even more, the above-reproach auditors who independently examined and certified the financial records of their publicly traded clients.
Six Questions for Your Fund Company [12/26/2007]
If you’re a buy-and-hold mutual fund investor, it’s easy to roll along owning shares in a particular fund for years. As long as the fund is performing at least in line with its benchmark index, there’s little reason to make a change.
Preparing for the 2007 Tax Season [12/19/2007]
Get your records organized now for the tax-preparation season, suggest planners Alexandra Armstrong and Karen Preysnar.
Selling Short: A Strategy for Price Declines [12/12/2007]
When you invest in equities, you’re giving a vote of confidence to the stock you purchase because you expect it to add value to your portfolio. You may be anticipating a short-term increase in price so that you can sell your shares at a profit. Or you may be looking for long-term gains from dividends and price appreciation.
Basic Internet Stock Screeners [12/5/2007]
The basic screener you get at MSN Money without the download is, well, basic
The Virtues of Dollar-Cost Averaging [11/28/2007]
If the biggest stumbling blocks to building your investment accounts are deciding what to buy and believing you don’t have enough money on hand, you might want to consider a convenient, simple strategy called dollar-cost averaging.
With Taxes, Firms Have Control Issues [11/21/2007]
You can’t ignore your own tax bills, but when you’re trying to find profitable and growing companies within a sector, paying too much attention to taxes can really obscure analysis.
Tax Planning [11/14/2007]
Planning portfolio changes strategically can allow you to minimize the taxes you’ll owe for this year.
The Case Against Saving for College [11/7/2007]
Although the case for saving for college is a strong, well-documented one, some people believe the concept is overrated. This month we’ll present this argument.
The Benefits of Health Savings Accounts [10/31/2007]
Health savings accounts make more and more sense as a way to line up adequate health coverage, say planners Alexandra Armstrong and Karen Preysnar.
Retirement Faces Changing Times [10/24/2007]
My mother used to tease me about her ability to get discounts through the Association for the Advancement of Retired Persons. “Just think — when you’re 55 you’ll be able to get hotel discounts, too,” she’d say.
Branded Unsafe [10/17/2007]
Modern economies run on trust. We purchase toys trusting they’re lead-free. We buy tires trusting they’re safe. And we even procure dog food trusting it isn’t contaminated with poisons.
Market Cycles Turn, Turn, Turn [10/10/2007]
Comparing investment markets to the seasons may seem a bit farfetched. But it can actually be an instructive way to introduce the concept of market cycles.
Start Early, Start Small [10/3/2007]
Starting to invest as early as possible, working with financial professionals when needed and diversifying intelligently are important elements of a successful retirement plan.
Your Brain and Investing [9/24/2007]
Financial journalist and book author Jason Zweig discusses research in neuroeconomics — the study of how people make choices — that suggests ways an investor can avoid becoming his own worst enemy.
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