The Business of Life

Diversification Loses Some Fans

Business of Life Network — Wed, 22 Feb 2012 03:18:32 +0000

Conventional wisdom says investors should always diversify, especially when it comes to volatile emerging markets. But now, in the face of some recent run-ups overseas, many investing pros are doing just the opposite—pushing client money into single-country bets. After taking a drubbing last year, emerging-market funds, which invest in developing capital markets across the globe, have come roaring back. The average diversified fund has gained 13% this year. But the stock markets of some individual countries have jumped even higher. Russia and Brazil have each gained 19%, while India has risen ...

Beware Mutual-Fund Share-Class Fees

Business of Life Network — Wed, 22 Feb 2012 03:08:43 +0000

Cash poured into mutual funds during the first week of February at the fastest pace in nearly two years, according to data from the Investment Company Institute, a trade group. But not all fund investors are being treated equally. Two investors who buy into the same fund could end up with significantly different returns, due to a confusing array of share classes, each with a different fee structure. As recently as 1989, the total number of share classes matched the number of funds: 2,262 in the U.S., not counting money-market funds, according ...

Tax Prep for the Novice

Business of Life Network — Wed, 22 Feb 2012 03:05:51 +0000

Tax season is unnerving for most people—and it can be especially so for 20-somethings who have little or no experience with the process. Though young adults generally have relatively simple returns, they’re prone to making big mistakes that can cost them. But help is available from tax preparers and tax-preparation software—often free or for a small fee—though experts say they come with limitations. First thing, novice tax filers need to understand the basics of the tax system, says G. Scott Haislet, a certified public accountant and tax attorney in Lafayette, Calif. He ...

Are Index Funds Messing Up the Markets?

Business of Life Network — Mon, 20 Feb 2012 03:24:01 +0000

Index funds are often hailed for their low fees, solid performance and transparency. Could they also be destabilizing the markets—and undermining the very diversification they have long promised? Recently, leading investing experts—including Rodney Sullivan, editor of the Financial Analysts Journal, consultant James Xiong of Morningstar Investment Management and Jeffrey Wurgler, a finance professor at New York University—have been warning that index funds could destabilize the financial markets. The rise of trading in index funds, these researchers say, is causing stocks to move more tightly together than ever before—as if they “have joined a ...

More Uncertainty for 2013

Business of Life Network — Mon, 20 Feb 2012 03:22:13 +0000

Tax planning is seldom simple, but lately it has been next to impossible. At year’s end, a host of temporary provisions expire, and lawmakers have put forth radically different proposals for what to do next. Throw in an election year, and predictions become all the more difficult. For the confused, here is what is clear (not much) and unclear (a great deal) about tax rates in 2013, plus expert guesses about what will actually happen. Warren Buffett has inspired a tax proposal affecting high earners. Rates on “ordinary” income, such as wages ...

Main Street Merchants Aren’t Deterred by Red Tape

Business of Life Network — Mon, 20 Feb 2012 03:19:43 +0000

With all the anti-regulation sentiment expressed lately by candidates on the campaign trail and in a dozen and a half debates, you’d think small-business owners would be in agreement that government regulations are destroying their enterprises. The hue and cry coming off the presidential campaign this year includes rhetoric that blames federal and local regulations for driving up costs, hindering investment, ruining small businesses, destroying jobs and placing a regulatory burden on the U.S. economy. But is that the way main-street merchants see the issue? Not the ones I talk to in ...

The Progressive Legacy: Part III

Thomas Sowell — Sun, 19 Feb 2012 03:31:28 +0000

The same presumptions of superior wisdom and virtue behind the interventionism of Progressive Presidents Theodore Roosevelt and Woodrow Wilson in the domestic economy also led them to be interventionists in other countries. Theodore Roosevelt was so determined that the United States should intervene against Spain’s suppression of an uprising in Cuba that he quit his post as Assistant Secretary of the Navy to organize his own private military force — called “Rough Riders” — to fight in what became the Spanish-American war. The spark that set off this war was an explosion ...

Re-Thinking Wealth Building

Douglas J Utberg — Fri, 17 Feb 2012 20:34:26 +0000

An article was recently published by Reuters entitled: “The New American Dream is Renting to Get Rich.” The thesis of this article is that home ownership is not the fast-track to wealth that it used to be. It also makes the point that many people would be better off renting and investing their surplus income in wealth-building investments than by sinking all of their income into owning a home. The article also went on to explain how many people who had purchased homes during the boom lacked the financial resources ...

6 Tips for Tapping Pinterest’s Surging Popularity

Business of Life Network — Fri, 17 Feb 2012 02:57:13 +0000

Many start-up founders and owners of existing small businesses wonder what their companies could possibly gain from yet another new form of social media. Finding adequate time to properly manage business profiles that already exist on Facebook, Twitter and LinkedIn is enough of a challenge. But the newcomer Pinterest could offer advantages for some small businesses, particularly those specializing in e-commerce. The social network lets entrepreneurs create online scrapbooks featuring photos of their newest or most popular products. Importantly, it also provides them a platform to write compelling descriptions of those products, ...

5 Housing Markets Where the Action Is

Business of Life Network — Thu, 16 Feb 2012 03:39:30 +0000

New homes have been out of favor for years now, but some markets are starting to see signs of a home building recovery. The number of single-family homes under construction increased 1.5% in January to a seasonally adjusted annual rate of 699,000, according to figures released this morning by the Commerce Department. That’s also up 9.9% from a year prior. Meanwhile building permits that allow for developers to break ground — the step before construction begins — rose slightly from December but nearly 20% from January 2011. Home builders express cautious optimism ...