TradeKing and Zecco are joining forces. Consolidation within the discount brokers arena is to be expected. Last year OptionsXpress merged with Charles Schwab, and a few years ago TD Ameritrade purchased Thinkorswim. Today commissions have gone down to historical lows, and the industry has matured. Both firms now charge $4.95/trade. Terms and financial details of the transaction was not disclosed, and is subject to regulatory approval. Neither firm is publicly traded.

In a press release (TradeKing’s version and Zecco’s version) they state the combined total of both firms will equal 1/2 million clients and $3 billion in assets. While that amount of clients isn’t small, it isn’t large either. Fidelity for example has over 20 million customers, but they are one of the largest firms. Vanguard manages $1.6 trillion in assets. Keep in mind TradeKing, and Zecco are targeting a different audience as well. Getting a larger customer base allows them to offer services in much more volume than previous.

Out of the two brokers I’ve reviewed, I’ve favored TradeKing over Zecco. Zecco from my experience while not bad, kept changing their pricing model. Zecco initially started with a freemium model, to then requiring a minimum of $2,500 for free trades, then $25,000, to today with $4.95/trade. I wasn’t a customer of theirs at the time of the changes, but I’m sure I wouldn’t have been happy with the constant price changes.

Hopefully with the merger, they will take the best of both companies. TradeKing has better customer service, online education, and their TradeKing Live service is pretty intresting. Zecco has better mobile integration, FOREX, tools, and online community.

If you are customer of either broker, you should have little to worry about with the merger process. The actual merger should be pretty seamless, since they both use Penson as the clearing house. Front-end services, like their social networks, might take some time to integrate and could prove more difficult.

More importantly, what’s not clear with this merger is who is buying who. The official word from Zecco and TradeKing is it’s a equal acquisition. So what does this exactly mean then to the naming? Will the company take on something like when Sirius and XM Radio merged, and how are now called SiriusXM? TradeKing Zecco, or Zecco TradeKing sounds a little wordy for me.

If was involved with the branding, I would take on TradeKing’s name. Zecco used to stand for ZEro Cost COmmission. Since this is no longer applies, why keep the name? TradeKing in my opinion has much more brand equity in the industry and best suited in the new company, regardless of who is merging with who. The other option is a brand new name, but then you must start from scratch with an new brand name. This could prove somewhat difficult in the crowded discount broker field.

You can see an online video from the CEOs of both companies discussing the merger.

http://www.youtube.com/watch?v=KlgBj6-_nEI

Both companies have setup web pages for the merger, and will post updates as the merger progresses.

• TradeKing
• Zeccofa

Readers: What do you think of the merger?

Related posts:

• Zecco Announces Zecco Elite
• TradeKing – Trade Free On Friday
• Zecco Trading No Longer Free
• TradeKing Lowers Their Option Pricing
• TradeKing iPhone App Released

TradeKing Merging with Zecco is from Investor Junkie Copyright © Empowering Media, Inc.

SmartMoney just released their annual broker survey for 2012. Compared to last year’s survey, quite a few changes in rankings occurred. I discuss my thoughts and make some comments below.

From the SmartMoney survey, it appears people should avoid WellsTrade like the plague. I don’t have direct experience with Wells Fargo’s brokerage so I can’t speak from experience. If you do have an account with them and would like to write a review, please contact me. I am always looking for unbiased reviews of the brokers. Please add your comments to any of the brokers we’ve already reviewed, if you haven’t done so already.

Vanguard is not on the list this year. Similar to the Barron’s survey, I suspect they opted out of the SmartMoney survey. Last year Vanguard did not rank very well. From my experience, Vanguard is great of buying their ETFs and mutual funds, but poor for any other investment product outside of Vanguard’s funds. I suggest getting a Vanguard account for only Vanguard funds.

For the third year in a row, Fidelity ranked #1 with SmartMoney. I completely agree with their review. We have most of our assets with Fidelity, and believe they have the best mix of investment options. From the beginner index only investor to the active trader, Fidelity should suit most of your needs.

Best Discount Brokers of 2012

A much more detailed table is available in their article. Click on the link for our reviews of the listed brokers.

Absent from the list were: OptionsHouse, OptionsXpress, and Vanguard.

Commissions and Fees

Best: Scottrade
Worst: WellsTrade

It is interesting to note they found from 2011 trading fees are down to $7.96, from $8.27 last year. While this is good for the consumer, the brokers are getting much more obtuse with their fees and commissions. Be aware many charge an exit fee when closing your account with them. Fortunately some brokers, will reimburse this exit fee. For example, TradeKing will pay up to $150 to cover this fee.

Customer Service

Best: TradeKing
Worst: WellsTrade
Like last year, TradeKing remains the best broker in customer service. From my direct experience with TradeKing, it is still my favorite broker to use for my WTF fund. Their prices are reasonably low, and had a great experience every time I contacted customer service.

Research

Best: Fidelity
Worst: WellsTrade
Fidelity has a large amount of free research available online. This includes rudimentary Morningstar information. While I do use Fidelity’s screeners from time to time, I still prefer to do most of my research with Morningstar.

Trading Tools

Best:Fidelity
Worst:WellsTrade
Fidelity wins the category this year, with E-Trade and TD Ameritrade very close behind. Remember speed of trading execution is important! While I’m not suggesting you become a day trader, the time you place to order till the actual execution can be a few minutes. This of course depends upon the exchange the equity is traded on an various other technical details I won’t discuss in this article. Though realize just because a broker has cheap trades it can cost money in the time broker takes to execute your trade. This is another “hidden” fee with your broker.

Fidelity was the fastest brokerage at trade execution, clocking in at less than four seconds per trade. The two slowest brokers of the bunch — WellsTrade (14.5 seconds) and Merrill Edge (16 seconds) — took almost twice as long as the industry average. Merrill Edge says some recent technical upgrades are improving trading speed; Wells Fargo says security measures might add extra seconds to its trading time.

Mutual Funds and Investment Products

Best: Fidelity
Worst: ShareBuilder
This is the same results from last year. In my opinion this survey is accurate. Fidelity shines in this area, and ShareBuilder definitely does not. Fidelity has a wide array of investment products. Interactive Brokers is better, but is more geared towards investment professionals and not retail clients. ShareBuilder on the other hand is better at stocks, than mutual funds.

Many discount brokers offer no trading fees for specific mutual funds, or ETFs. This makes firms like Fidelity, and TradeKing much cheaper than ShareBuilder.

Banking Services

Best: Merrill Edge, Fidelity (Tie)
Worst: Zecco

Fidelity recently introduced their iPhone/iPad app for deposits through your phone. A very neat feature and eliminates the amount of times I must visit their branch office. Fidelity also offers branded credit cards. A Visa with decent cash back terms, and American Express card that gets 2% cash back. It is no surprise Zecco is in last place since it’s not the target audience they want to acquire.

Best Full-Service Brokers

Not to be left out, SmartMoney also released their best full service broker list for 2012 as well. Except for UBS, I do not have any direct experience with the brokers, and suspect I won’t in the future. I’m not saying they are bad per se, but based upon the ability to manage our own money. Full service brokers definitely have their place in the investing universe, but not in the Investor Junkie household.

1. Edward Jones
2. UBS
3. Raymond James
4. Merrill Lynch
5. Wells Fargo Advisors
6. Morgan Stanley Smith Barney

Related posts:

• Barron’s 2012 Broker Survey
• Barron’s 2011 Broker Survey
• How to Choose an Online Broker
• Stock Broker Reviews (Updated 2011)
• TD Ameritrade Review – The Perfect Online Broker?

SmartMoney 2012 Broker Survey is from Investor Junkie Copyright © Empowering Media, Inc.

My “day job” consists of building marketing strategies for small and medium-sized businesses. In general, my clients are usually hesitant to advertise, fearing that money spent on an advertising strategy is spent for nothing.
Of course, my own perspective is of the opposite – more money is lost in culling back advertising spend than is lost by advertising. Unfortunately for most business owners, the amount spent on an advertising plan can be quantified, while the amount lost in missed sales cannot. At a minimum, lost sales are only discovered once a proper plan is implemented.

Free vs. Paid Advertising

I find that the majority of my clients come to me after exhausting every free advertising vehicle possible. From social media sites like Facebook and Twitter, most businesses have the freebies covered. The low cost to entry plus ease of setup makes social media the new go-to.

But thousands of businesses tend to “waste” even more money by advertising an already differentiated product in non-differentiate channels.

Here are a few of my least favorite money drains:

1. Yellow pages – Yes, the Yellow Pages representatives are correct: your business does not exist if you refuse to put your number in the phone book. However, a half-page ad will not significantly increase revenues over a quarter-page ad for a differentiated business. In many high-value channels, significant cost-inflation exists from competition. Take a stroll through the many lawyers and doctors in your phone book. One year, no one has an ad. By the second year, everyone has a quarter-page ad. Then everyone has a full-page ad. To stand out, you either have to name your business AAAAAA Legal Team to game the alphabetical listing, or buy a larger and larger advertisement (which is put in front, but is still alphabetized.)
2. Television – This is probably one of the most powerful advertising mediums available, but few small businesses utilize it fully. Much like you won’t become someone’s best friend by hanging out with the individual for a day, you won’t become the go-to provider for goods or services in a single category with a one-time blast on television. I remain a firm believer that a $10,000 advertising budget ran on a single month in several different programs is far less effective than the same budget spread out over 6 months in two different programs and times. Time really is the differentiator of great businesses, and the solvent that slowly weeds out the lesser-quality enterprises.
3. Pay-Per-Click – Managed by another individual or agency, PPC managers often prey on the inexperience of their clients. Newspapers and the phonebook companies broke into this business to offer business owners the opportunity to drive targeted traffic to a local business website for flat rates like $1 or $2 per click. Examine the actual advertising rates by using a tool like Google Adwords Tool to see just how large of a premium you’re paying for someone besides Google to send you the monthly bill. Middlemen here are often just as inexperienced with your business model as you are with pay per click. Massive inefficiency exists, especially in the smaller market areas.

Kick-Start Your Advertising

Here’s a great way to start tuning up your existing campaigns:

1. Kill the address – Most advertising methods will attract an audience spread far wider than your average customer draw. Making customers aware of your address is unlikely to alert new customers. Tell your customer that you’re located in XY Shopping Center, or ABC Big Box store. Younger customers in particular are very much unfamiliar with where your business is. Do you want to advertise to your current customers only, or would you like some new customers to find you as well? If you’re looking for new customers, you have to speak the language of people unfamiliar with your brand.
2. Pick one product – There has to be some common denominator in your business. What product do you have that can bring the most people possible in the door? Even if your margins are proportionally smaller than your potential market, getting more people in the door of your business is almost always worth the ad spend. How many businesses have you ever visited once? How many businesses gave you better than mediocre customer service and only earned your business once? People love simplicity and routine. Make your business part of a new customers’ routine by bringing a new customer in once. Besides, if anyone cared about a wide selection they would be first in line at the nearest big box retailer.
3. Differentiate – Do the contrarian thing! At any one time, there are only a few hundred businesses on TV in your area. However, there are likely thousands in the phone book, if not hundreds listed solely in your industry. If a customer simply wanted the first company possible, he or she would always pick the first company in the phone book. By advertising on TV, radio, or other mediums not as heavily targeted by the competition, you build a customer relationship and a strong association between your brand and product.

Financing an Advertising Campaign

For newer businesses with smaller amounts of capital, advertising is all about the payoff period. A new business with limited capital would obviously favor moving more product to branding. As time goes on, however, advertising campaigns must be buffered with brand-building commercials to justify higher prices (and higher margins) than your competition.

There is no money to be made as a low-cost producer. Especially when businesses are smaller, it’s all about value-add from customer service, warranties, maintenance, or other intensive services that one could never find at a big box retailer. Anyone can sell bikes, but not everyone can service them. Likewise, anyone can sell at the lowest-price possible, but no one can make money doing it without massive scale.

For most small businesses, the goal should be to do one thing and do it well. One of my favorite marketers of all time, Steve Jobs, has an excellent talk on the concept of building a brand:

In the video above, Jobs discusses (and somewhat predicts) why Apple’s marketing strategy will put the company on top of the electronics market. In particular he notes that:

• Customers don’t care about the details – Jobs says that the company will never win on megabytes or bits. To date, I cannot think of a single Apple ad that discussed the computing power of an Apple product. It’s about customer experience.
• It’s all about values – What does your company stand for? Why should customers want to support your business over another? In his example of Nike, he notes that the company honors great athletes, giving it a competitive advantage in a commodity space – shoes! Interestingly, Facebook CEO Mark Zuckerberg said something similar in Facebook’s corporate filings – he believes customers want to buy products from businesses they support as much as they want the product itself.

The Apple way of building a brand takes marketing all the way to a customer. Think about the methods Apple uses to internalize customer needs and demands:

1. Negatives turned positive – Apple’s products cannot be serviced by the individual. Any issue is serviced by Apple, removing frustration from the customer and protecting Apple’s brand against a lack of care from third-party repair centers.
2. Controlled experience – Steve Jobs intelligently never licensed Apple’s operating software to other hardware makers. Thus, Apple can ensure true quality control. Customers pay a premium for Apple products because they know it will…well, just work. Customers who buy a product without research are likely to pick a better product off the shelf if they purchase an Apple product over a Windows product.
3. Self-insuring the product – Apple is a financing company as much as it is an electronics company. Apple services its products for years longer than most other computer and phone makers. But for it Apple drives higher margins on its product. Services like these are Apple’s differentiator in a business where it seems as though every other company sells you a product before throwing you to the wolves.

Related posts:

• Small Business Financing Options
• Financial Literacy for Small Business Owners
• How A Small Business Can Perform Like Wynn Resorts
• How is Investing and Owning a Small Business Related?
• Why Your Small Business Should Offer a 401K

Small Business Marketing Strategy for the Best Results is from Investor Junkie Copyright © Empowering Media, Inc.

President Obama recently met with Robin Roberts of Good Morning America to declare that he believes same-sex marriages should be legal.  The motive for his decision to go public?  His daughters, who have friends at their school who have same-sex parents.

Regardless of how you personally feel about the issue, Obama’s decision to declare this now is an interesting political move.  Perhaps it could help him garner additional votes among the young, whom he appealed to four years ago when he ran for President, but he does run the risk of alienating older voters and conservative voters who are firmly against making same-sex marriages legal.

Here is what I am reading this weekend:

Who Are the One Percent?:  Barron’s  Most who vilify the top one percent of income earners may be surprised to learn that the majority of them come from middle class backgrounds and created their wealth during their lifetime.  In addition, as the public turns against them, they are increasingly safeguarding their money, which is detrimental to the overall economy.

How to Make Money Online:  Seth Godin’s Blog  Contrary to what you may think, a blog is not like the baseball field in Field of Dreams.  If you build it, there is no guarantee they will come.  Here is a guide to how to make money online.  Hint:  it isn’t quick or easy.

Student Loan Bill Fails Senate Test Vote:  MarketWatch  Student loan interest rates are set to double July 1st, climbing from 3.4% to 6.8% unless Congress steps in, but a vote to stop the increased rate failed in the Senate.

Universal Checkbook:  How It Works:  Personal Capital  Here is a great app for the iPhone.  Neat feature!

I Want 8% Guaranteed Return, Too!:  CBS Money Watch  Are you an employee with a public pension?  Here is why you have it so good, and why the rest of us are paying for it.

Related posts:

• Weekend Reading for January 6, 2012
• Weekend Reading for February 10, 2012
• Weekend Reading for April 6, 2012
• Weekend Reading for May 4, 2012
• Weekend Reading, January 20, 2012

Weekend Reading for May 11, 2012 is from Investor Junkie Copyright © Empowering Media, Inc.

I’ve been a Lending Club investor since July 2009. In the three years I’ve been doing P2P investing, I’ve learned a lot since I first started. Some of lessons you see discussed with my quarterly updates, but not comprehensive enough for someone new to peer-to-peer lending.

When I first started investing with Lending Club I was forging new ground. Not many others had done this before, nor were there many online resources, or others you could turn to for advice. For the most part, I did pretty well with my Lending Club investment. I’m earning close to 10% APR, though I did make some mistakes along the way. It would have been great to have found a mentor to help guide me along the way. To a beginner, investing in Lending Club can be a little daunting.

Since I’ve been very transparent with my Lending Club investment, I’ve had many ask me how to invest. The most common questions I get: “How can I get started?” or “I’m already with Lending Club, how can I get better returns?”. I’ve always wanted to create an online course for peer-to-peer investing, but never had the time to focus on such an endeavor.

P2P Lending Wealth System Course

Fortunately someone has filled this much needed niche. Peter Renton from the Social Lending Network blog, created the P2P Lending Wealth System. It’s the most comprehensive P2P investing course I’ve seen anywhere.

Peter created this course last year, and just updated it for 2012. If you don’t know Peter or his web site, he’s an authority in the P2P investment arena. He also walks the talk. He’s an active investor with both Lending Club and Prosper, and has five figures invested in each P2P lender. He’s a seasoned investor that can you get started quickly, and help get a decent return.

Peter’s course discusses:

• Intro and background to P2P investing of Lending Club and Prosper
• The Risks with P2P Lending and how to minimize defaults?
• Maximizing Your ROI with Lending Club and Prosper
• Insider tips to research and taxes

The over four hour course is in online web video format, and walks you through every step of the investing process. The course is perfect for investors just starting out, but also includes advanced topics that will even help the seasoned P2P investor.

I’ve personally reviewed the entire seminar, and without question endorse this product. I can honestly say, even a seasoned investor like me, I even learned a few tips and tricks that will improve my returns.

For someone just starting peer-to-peer investing, the course is well worth the cost. It will help ensure you get a decent return with Lending Club. The course not only discusses Lending Club, but also the other peer-to-peer lender Prosper.

I don’t have any direct experience with Prosper’s 2.0 lending process yet. I plan on investing and reviewing Prosper in the coming months. This course will help me get a head start investing with Prosper.

Peter is running a special on the course until the end of May 2012 for $97. After May the price will go up to $147, so I suggest you order it now.

Related posts:

• Lending Club (October 2011 Update)
• Lending Club vs. Prosper
• Lending Club (April 2012 Update)
• Lending Club (July 2011 Update)
• Lending Club (July 2010 Update)

Improving Your Lending Club Returns is from Investor Junkie Copyright © Empowering Media, Inc.

Price to earnings ratios, or price-earnings multiples are some of the most ubiquitous valuation metrics available. Even non-investors have likely seen PE ratios appear on screen as they zoom by CNBC as they navigate through their TV channels.

A price to earnings ratio is a very simple valuation metric; it’s the price of a stock divided by the earnings of the company per share of stock. A company that has a per-share price of $15 and reports $1.50 of earnings would have a price to earnings ratio of 10. The company sells for a price 10 times its most recent earnings.

So why do I say that PE ratios don’t matter? Why would I think investors might put too much emphasis on PE ratios?

The Case for Killing the PE

Here’s why I think PE ratios are more likely to mislead investors than put them on the trail towards the next hot stock:

1. Accounting trickery – Earnings can be inflated any which way you so desire. One way that companies can show positive earnings is to change the underlying dynamics in their pension programs. That makes for a great earnings quarter, but it does not change the mechanics of the business. Earnings go up on a nominal basis, but the true value of a business is left unchanged.
2. Inaccurate Smoothing – Earnings often represent an inaccurate picture as cash flow to a business may not appear at the same time the company records positive earnings. For example, a company that earns $100 million per year every year for 5 years is very different from a company that has free cash flow of $0 for 3 years before 2 years of $250 million cash flows. If the company needs cash to pay down debt, or to expand, positive earnings do little to help the company’s business. However, positive free cash – cash which is free for further investment or debt repayment – can expedite the realization of the business’ goals. Take this as far as you need to. Let’s say you’re a new college graduate who can expect to earn $4 million over your lifetime. Would you rather receive $4 million cash at graduation, or $4 million in year 40 of your career? Any logical person sees that cash in hand is worth more than cash in the future.
3. A Single Year Look – Price to earnings multiples shown on popular finance sites are for the most recent year. A woman on StockTwits tweeted that she was irritated that automaker Ford could not seem to find traction and move higher, even though it had a crazy low PE ratio of 2.2. Alas, Ford’s price to earnings multiple is calculated based on last year’s earnings. Last year, Ford accounted for a large, one-time earnings adjustment due to tax liabilities. Ford recorded an amazing accounting profit last year, but it hardly affects the business going forward. One cannot expect that because Ford “earned” nearly $20 billion last year because of tax accounting that the company will do it next year.

Warren Buffett on Accounting Earnings

Buffett – and most value investors, for that matter – are usually the most outspoken critics of accounting earnings. Buffett says he likes businesses that generate earnings in the form of cash. It’s one thing for an investor to invest in a business where “earnings” are just left in the form of more inventories, or more factories. It is another thing all together to report earnings and actually have the earnings available to owners in an asset that does not affect the business’ operations.

Think about it this way: you can’t take a factory out of a business to pay yourself. You could, but you’d severely cripple the business in doing so. You can remove free cash from a business without affecting a manufacturing business. Unless earnings result in free cash, though, there’s nothing to distribute.

Turning Earnings in Cash

A great example of a business that turns earnings into cash is Mastercard. The company provides credit and debit card processing services. This is not a very capital intensive business – you don’t need to buy factories, or invest in capital to process credit cards.

The company turned 85%, 84%, and 132% of its earnings into cash each year in the period from 2009-2011. Compare these figures to a company like CSX, a railroad operator. CSX turned 53%, 91%, and 66% of its earnings into cash in the same period. Building and maintaining railroads obviously requires far more money than does building out a credit card processing business. Where Mastercard has people, CSX has billions of dollars in railroads and infrastructure. Paying a salary to operate is much better than deploying cash in major investments that have a 20, 30 or even 50-year timetable.

True Wealth Creation

It’s really all about true wealth creation. While we could all mindlessly compound our assets over the long haul, at what point do we get to realize the benefits of a high net worth? Who cares if you own a billion dollar manufacturing business if all your cash flow is being reinvested into retooling your factory every few years just to stay in business?

Who cares if your cash washing business “earns” you better technology in your car washing business each year? You can’t turn sponges and wax into food without affecting your ability to do business.

And this is why it’s so important to disregard PE ratios and earnings on single stocks. A better ratio would be the owners’ earnings ratio – or free cash flow yield. An owners’ earnings calculation allows investors to see which companies are making an economic profit – a profit which can be distributed back to shareholders. While owning more of a business is excellent, owning more of a business that actually turns earnings into cash is a much better alternative.

Ignore PE ratios, and really just ignore earnings all together. Consider earnings only when it is possible for companies to turn those earnings into cash. And as a rule, look for the firms that end up with the most cash relative to their reported earnings. Morningstar has a “key ratios” page for any public company, which allows you to see at a glance how much of a company’s earnings actually ends up in cash.

No related posts.

Why PE Ratios Don’t Matter is from Investor Junkie Copyright © Empowering Media, Inc.

1. Get A Free Kindle Fire
2. Free Callaway Driver Or Free SONOS Music Player Promotion
3. 100 Commission-Free Trades Promotion
4. Dell Monitor Promotion
5. IRA Promotion #1
6. IRA Promotion #2
7. Financial Times Promotion
8. Morningstar Promotion

OptionsHouse Free Kindle Fire Promotion

Free Callaway Driver Or Sonos Music Player Promotion

OptionsHouse 100 Commission-Free Trades Promotion

OptionsHouse Dell Monitor Promotion

OptionsHouse IRA Promotion #1

OptionsHouse IRA Promotion #2

OptionsHouse Financial Times Promotion

OptionsHouse Morningstar Promotion

Related posts:

• OptionsHouse Review – Unparalleled Trading Tools
• OptionsHouse Announces an iPhone App
• Stock Broker Reviews (Updated 2011)
• E*Trade Review (Updated 2011)
• 2012 Dividend Aristocrats

OptionsHouse Promotional Code (Updated 2012) is from Investor Junkie Copyright © Empowering Media, Inc.

This week the New York Times published an article about the strategies Apple uses to keep their tax burden low, in regard to their income.  This created a storm of controversy.  Yet is it Apple’s fault that they can use tax laws to their benefit?  Why should they pay more in taxes than they are legally required to pay?

Here is what I am reading this weekend:

How Apple Sidesteps Billions in Global Taxes:  New York Times  Here is the original article that spawned several other articles analyzing Apple’s ability to keep their taxes low.

It’s Not Apple’s Responsibility to Pay More Taxes: Tech.pinions  The above  New York Time’s article showing how little Apple paid in taxes made readers furious.  Yet, is it Apple’s fault or the fault of the tax code?

Apple Dodges Billions in Taxes:  Business Insider  Here is another take on just how Apple (legally) avoids paying what others believe is its fair share of taxes.

The Big Doubt Over Facebook’s IPO:  WSJ  Do you hear that hiss?  I think it is Facebook’s IPO deflating.  Here is more of the story.

Do You Have the Courage to Be Wealthy?:  Watson Inc  Looking for inspiration and encouragement to believe in yourself and your vision?  Read this post.

Related posts:

• Weekend Reading for January 13, 2012
• Weekend Reading for January 6, 2012
• Weekend Reading for March 2, 2012
• Weekend Reading, January 20, 2012
• Weekend Reading for April 20, 2012

Weekend Reading for May 4, 2012 is from Investor Junkie Copyright © Empowering Media, Inc.

When it comes to investing, there are two main categories of analysis. Fundamental analysis tends to look at “big picture” items, such as what is happening in an industry or what is happening with a company. These items might include economic policies, political upheaval, and company management. For investors who are more interested seeing what the statistics of the market are — and what they indicate about future trends — there is technical analysis.

Looking at Price Movement

Much of the time, technical analysis focuses on price movement. Instead of considering intrinsic value, technical analysis is all about the actual results of market action, and price is a big part of that. Technical analysis isn’t about “undervalued” or “overvalued;” rather it is about analyzing the price action and trying to find patterns that might indicate what might happen next with a particular investment. Some of the assumptions of technical analysis include:

• The price includes everything: According to technical analysts, everything about the investment — including the fundamentals — are included in the price. The price reflects everything that affects the investment, so the price offers an accurate look at where things stand, and price history can give a clear picture of overall trends as well as short-term possibilities.
• Price movements happen in trends: Most technical trading strategies are based on the assumption that prices move in trends. Once a trend is established, the price is expected to continue moving in that direction — until the trend is played out, and a new trend established. There are various indicators that provide insight into trends, including support levels and resistance levels.
• History often repeats itself: Technical analysis also assumes that price movement is repetitive. Charts are a big part of technical analysis, and some go back decades. This ways, investors can scour the price movements for evidence of recurring patterns. By figuring out the patterns, it’s supposed to be possible to figure out what might happen next with an investment by studying the historical data.

The use of charts requires that you look for patterns. Many investors draw trend lines to help identify different patterns that indicate the direction a stock may be moving. Different patterns indicate bullishness or bearishness. Patterns are classified as continuation and reversal. A continuation pattern indicates that the trend will continue in the same vein, once the pattern completes. A reversal, though, means that the trend will head the other direction once the pattern finishes.

In technical analysis, you study to learn the different patterns, and what they represent. However, interpreting charts can be a little fiddly at times; sometimes it’s hard to spot the pattern — or adequately understand what it indicates. Know what to expect when a pattern ends can help an investor figure out what to do next.

Technical analysis is used with many different investments, but we often hear about it most in stocks and in currencies. Technical analysis is especially popular with day traders who look to find the ideal times to enter and exit positions in a way that allows them to earn profits. Like all analysis, and all investing strategies, though, it’s important to consider whether or not it suits your style, and to remember that there is always the possibility of loss.

Readers: Do you believe in technical analysis? If so why? How is technical analysis better than fundamental investing?

Related posts:

• How is Investing and Owning a Small Business Related?
• Stagflation in 2011?
• E*TRADE Enhances E*TRADE Pro Platform

What is Technical Analysis? is from Investor Junkie Copyright © Empowering Media, Inc.

Managing risk is a critical part of investing, but also in business. Let me explain. Most people get the idea of managing risk with investing. It’s one of the core tenants in investing. Don’t put all of your eggs in one basket. It’s obvious we don’t have control over many aspects with investing, so to mitigate that risk we diversify. This includes not only by asset classes, but also within the U.S. and internationally. Many business owners, and employees for that matter, get tripped up with diversification with their career. They put all of their eggs in one basket, only for that basket to get crushed.

When owning a business you have much more control over your destiny, but also risk. Though how many stories have you heard of a well to do businessperson, who had it all, only to lose it when the company they founded went bankrupt. They obviously weren’t managing risk very well since most of their net worth was within their business. The same applies if you’re an employee working for someone else. If were to lose your job, how long would you last with out it? Unfortunately for many, they are just two weeks away from bankruptcy. In the case of an employee, most only have a single source of income. So I consider it critical you go out and get a side hustle. Start up that business you always wanted part-time.

Manage Risk In The Things You Cannot Control

This is a key distinction. If you can control an issue, more than likely it’s not a risk. Risk is outside of your sphere of control (i.e. weather). Let me give you two personal examples. One I didn’t properly prepare for, and another I did.

The Bad Economy

I’ve owned my web hosting business for over ten years now. I’ve done pretty well with it, considering it’s a very competitive industry. We have a good niche in a crowed space. The problem is we cannot control the economy. As everyone knows, 2008-2009 was a horrible time to be in business. During that period we lost quite a few long term customers. It wasn’t because they went to other providers, or we were too costly, but they simply went out of business.

The ones who did stay with us, weren’t wanting to expand much online. Frankly from my discussions with them, many small business owners were terrified. Financially my business did ok during this period, but had very little growth. Pretty much during this period our growth was flat. Fortunately, I was one of the lucky industries that wasn’t hit too hard during our recession. As you know, many others weren’t so lucky, like independent building contractors, or employees in the financial sector.

The problem in my case is I didn’t manage my risk too well. I did’t have a business strategy to compliment my existing business income. So when the economy tanked, so did my business growth.

I decided to ask a great question, “What other business or service can I offer, that will do well if the economy does poorly?”

From my research I decided to find another niche that I was interested in, but also complimentary to web hosting. From this Investor Junkie was born. Not only did I feel it was a missed niche, but could compliment my existing incomes.

From my research, I determined people become much more interested in finance when the economy tanks. Financial search queries increase during this time. People are looking for solutions to their problems. My goal is to create this site is a beacon for independent investors, and small business owners. To also educate people so the next time the economy is bad, you’ll not only survive but thrive! It’s critical to anticipate problems before they are critical.

So while I cannot control the economy, I can control my focus of the business niches I am in. So in the future should one business do poorly, the others should do well. In the past five years there have been many business that have done well because of the poor economy, such as:

• Collection agencies
• Home cleaners – To clear out the foreclosed homes abandoned by their owners
• Grass painters – For foreclosed homes to make brown grass look green
• Pawn Shops

I’m not suggesting you should go into these businesses, but realize a business can thrive while the economy is doing poorly. It’s possible your existing business can thrive too, it’s just the fact you need to adjust your marketing and sales to target a new need.

Data Center Failure

We colocate our servers in two data centers. I always believed in having at least two of them. The reason is because disasters happen. No data center can achieve 100% uptime all the time because Murphy’s law applies. If a data center was down for long period of time (ie days), it could mean the end of my business. So I’ve always followed that belief, and was very fortunate on that infamous day in 2001.

At the time, we had a data center just a few blocks away from the World Trade Center. The data center wasn’t initially affected by the destruction on 9/11, but eventually went offline anyways. A power substation was downed because of the terrorist attack. A modern day data center can deal with a power outage like they experienced, so power continued to run while there was no electricity downtown.

For those not familiar with what happened after the buildings collapsed, downtown was locked down. No one was able to get in or out. All bridges and tunnels were sealed off, including the diesel truck that was to replenish the data center generator. So twelve hours later, all our computers went down.

Fortunately we didn’t have all our eggs in one basket, and only half of our customers were affected by the outage. The ones that were affected, we worked with them to help bring them online at our other unaffected data center. If it weren’t for our alternative data center, our business would have been dramatically affected, and more than likely would have lost some important customers. Instead we got praised how quickly we were able to bring our customers back online after the terrorist attack.

Risk Assessment Exercise

So with investing, and in business it’s critical you do a risk assessment every year. Know the possible risks, and possible outcomes. List out the:

• Risks – Go crazy with your list. Put even the absurd items, but be comprehensive
• Chance To Occur – In percentage, what’s the chance of it happening within the year
• Outcome – What will happen financially or future financial growth?
• Hedges – What action(s) can you take to prevent this from occurring or minimize it’s impact?

The best question I always ask “What’s the worst that can happen?” Once you created this list, attack the low hanging fruit first, the ones most likely to occur, or the easiest to mitigate. Creating this list won’t obviously help with the “black swans”, but they more than likely be on your radar. By planning ahead of time for possible risks, you will minimize the possible outcome should the occur

Related posts:

• There’s No Such Thing as a “Risk Free” Investment.

How To Manage Risk? Diversify! is from Investor Junkie Copyright © Empowering Media, Inc.

What if someone told you the market for investing in single family homes was red hot? You might just think they’re crazy. In major markets, single family homes are red hot. BusinessWeek reports several “name brand” locales like Phoenix, Boston, and Washington D.C. are red hot with new buyers. Some owners report having multiple offers for their newly listed properties.

So what’s so hot about single family homes in 2012? Low costs of borrowing, excellent spreads between rental prices and mortgage payments, and a minute uptick in job growth. Elsewhere, investors are padding the real estate market with fresh cash to make their foray into the rental business.

Single Family Homes as Investment Property

The market for single family homes isn’t propelled solely by live-in buyers. In fact, even hedge funds have stepped up their interest in tangible property, purchasing homes to rent as perennially falling rates allow for higher returns on invested capital.

Single Family vs. Mutli-Family Property

Single family homes are usually off-limits for investors seeking cash flow. Multi-family homes offer much larger returns relative to the sales price, partially due to the limited interest for multi-family property. The real kicker is in the details – a collection of events favors single family homes over multi-family property as an asset class.

The single family home advantage can be broken down into a few key components:

1. Appreciation – Single family homes tend to appreciate faster than multi-unit properties because of a changing demand curve. Investors tend to have much greater access to capital more reliably, whereas live-in demand ebbs and flows with employment. Investors using leverage to purchase a single family property have significant cash-on-cash upside on any uptick in property values.
2. Liquidity – At any given time there are far more buyers interested in a single family home to live in rather than a multi-unit property. For one, higher prices for multi-family units leaves out much of the market interested in owning a home. Secondly, few people interested in a single family home are interested in the rental business – even at a discount, few people would agree to make the switch to live in a multi-family home. Besides, it’s likely much of the market for live-in homes is already seeking to escape a shared wall with another person.
3. Potential tenants – This is purely anecdotal, but the experiences of other landlords suggests that the rental pool for single family homes is better than the rental market for duplexes or apartments. Single family renters are more likely to be established families – people interested in living in the same place for a considerable period of time due to job proximity, school districts, or neighborhood choice. Lower turnover boosts rental profits, as the home experiences fewer vacancies and less tenant-to-tenant maintenance like painting and landscaping.

From Catalyst to Exit Plan

Hedge funds are notorious for higher portfolio turnover. Institutional interest in single family homes suggests that funds see a catalyst for a smooth exit, with large cash on cash returns. So what do hedge funds see that other investors might not? Why would hedge funds (an investor class typically disinterested in collecting rental checks from individual families) favor single family homes over multi-family homes?

It might have everything to do with the macro.

The 2010 census reveals just how rapidly home ownership changed in the last three decades. In 1980, 22.1% of people aged 15-24 owned their own home. In 2010, only 16.1% of the same age group owned a home. The same decline in homeownership is also found in the 25-34 age group, with 51.6% of people 25-34 owning their own home in 1980 compared to 42% in 2010.

This shift is not as noticeable when one studies all age groups. Some 64.4% of Americans owned their home in 1980 compared to 65.1% in 2010. The aggregate reveals an opposite trend; homeownership has increased despite lower homeownership rates among younger Americans.

Starter Home Appreciation

Individuals aged 15-34 (more importantly, those aged 25-34) were the make-up of the housing boom – the people who purchased starter homes in cramped suburban neighborhoods for the opportunity at the American dream.

Is the American dream really dead? Did those 15-34 give up on home ownership forever? Not exactly. A more likely cause and effect sequence can be found in employment. At the end of 2011, 23.7% of Americans 16-19 were unemployed by official measure. Those aged 20-24 faced an unemployment rate of 14.2%. Meanwhile, unemployment for all ages was 8.6%.

Suffice it to say that the best new source of demand might just come from this age group – the age group most likely to experience the fastest employment growth. This is also the age group that would be most interested in inexpensive single family homes so popular with investors. Given the available financing (FHA requires only 3.5% down), any increase in employment can quickly change the dynamics of the buyer pool for single family property.

So there’s the exit. The alignment of trends looks far too perfect – a single source of demand is temporarily forced out of the market, rates are at record lows, and unemployment among a core demographic is testing new highs.

Continued job growth will only fuel the capacity for would-be buyers to snatch up inexpensive homes favored by landlords, and continued stagnation only fuels the necessity for others to rent. If unemployment stays near its highs, the rental market enjoys continued strength. If unemployment falls, new buyers come in to push up prices for single family homes.

For hedge funds and for individual real estate investors, this appears to be the perfect storm. Limited cash outlays for leveraged property plus high rental rates and a culmination of factors supporting future appreciation makes single family homes a fantastic wager for the long haul. As with any investment, we will have to wait and see how this plays out, but whether or not housing appreciates in value, rental checks will roll in as investors ride out the dip.

Related posts:

• 1031 Exchange Rule – How To Use In Real Estate Investing
• REITs vs. Real Estate Investing
• Tax Efficient Investing
• Why You Shouldn’t Prepay Your Mortgage
• REIT (Real Estate Investment Trust) Investing

Investing In A Rental Property is from Investor Junkie Copyright © Empowering Media, Inc.

Newt Gingrich has been quietly chugging along in his effort to become the next Republican candidate, but there is word that he will soon give up his bid.  That leads to the next question–who will be Romney’s vice presidential candidate?  Many are speculating it will be Marco Rubio, but we will just have to wait and see.  Meanwhile, Obama seems to be ramping up his preliminary campaign efforts.

Here is what I am reading this weekend:

Millionaires More Bearish Than Their Advisors: WSJ  Millionaires and their financial advisors differ greatly in how optimistic they are about the economy and investing by a surprisingly large gap.

The Rich and the Rest of Us: Consumerism Commentary  Is the middle class poor?  That is what Dr. Cornel West and Tavis Smiley state in their new book, but is it true?

Student Loan Rate Hike – What You Need to Know:  Money  The current low student loan interest rate of 3.4% is set to expire this July 1st and revert back to 6.8%.  That could cost students who take out the maximum amount of $23k in subsidized loans an additional $5k over the life of the loan.

Facebook’s Growth Slows as IPO Nears:  WSJ  Facebook’s first quarter earnings show a decline from the final quarter of 2011, demonstrating the pressure the company is experiencing as the IPO date nears.

And finally, for a little humor, no one is reporting all the iPads sold at CVS recently.

Related posts:

• Weekend Reading for April 6, 2012
• Weekend Reading for April 13, 2012
• Weekend Reading for April 20, 2012
• Weekend Reading for March 30, 2012
• Weekend Reading for April 11, 2010

Weekend Reading for April 27, 2012 is from Investor Junkie Copyright © Empowering Media, Inc.

Here’s a little economic lesson for today. Milton Friedman, in his book “Free to Choose“, detailed the four ways to spend money:

1. You spend your own money on yourself.
2. You spend your own money on someone else.
3. You spend someone else’s money on yourself.
4. You spend someone else’s money on someone else.

You get the best value for your dollar if you stay within #1. Here’s a video clip summarizing his economic theory.

Related posts:

• Do You Value Your Time Or Your Money More?
• 2 Ways To Maximize Your Roth IRA Returns
• Five Ways to Improve your P2P Investment
• Is Gold Really Money?
• Wealth is Much More than About Money

Milton Friedman – Four Ways To Spend Money is from Investor Junkie Copyright © Empowering Media, Inc.

When it comes to portfolio management, many experts recommend that you focus on asset allocation. Asset allocation is a strategy that involves building a portfolio around asset classes. You include certain percentages of stocks, bonds, cash, real estate, and other investments, depending on the goals for your portfolio. You don’t have to maintain static ratios of asset classes in your portfolio, though.
If you are looking for a way to take advantage of changing asset values, and if you want to keep up with what’s happening in the markets, Tactical Asset Allocation is a strategy that can help.

The Basics of Tactical Asset Allocation

Basically, Tactical Asset Allocation (TAA) is a strategy that involves active portfolio management. This isn’t about buying specific asset classes in specific quantities and then holding. Instead, you rebalance the percentages of assets held in different categories so that you can take advantage of current market conditions.

For the most part, though, TAA isn’t considered completely active. When you create your investment portfolio you decide on your base asset allocation. You set up your desired percentages of each asset class. However, if the market experiences an anomaly, or if conditions change for the short term, the asset allocation is changed. Tactical advantage is used in order to maximize profits, as well as limit losses. Once the desired short-term effect is achieved and the markets settle down a bit, the original asset allocation can be returned to.

TAA is about dynamic portfolio management, and requires that you pay attention to what is happening so that you can change your asset allocation to take advantage of current conditions. For example, if stocks are dropping, and offering a good bargain, it might be worth it to shift to more stocks in order to buy when valuations are low. That way, you get more bang for your buck. Later, as valuations increase, you can shift your asset allocation, selling for profits since you bought while prices were low.

The idea is to switch your asset allocation when conditions indicate that one asset might soon outperform another. Rather than focusing on picking particular investments, the idea is to focus on an entire asset class or sector at one time. TAA works well when you understand how asset classes relate to each other, and how they generally move in response to market stresses. When you have this understanding, you are more effective in shifting your asset allocation to take advantage of the current circumstances.

Bottom Line

If you understand how different asset classes relate to each other, and if you can spot trends in the market, it is possible to use Tactical Asset Allocation to improve your portfolio performance. Realize, though, that TAA works best for those with the skills and knowledge to make it work. And, like all investment strategies, there is no guarantee of success. You can re-balance your portfolio so that it takes advantage of market conditions, and periodically adjust so that you stay on track. TAA is just one more tool that can help you manage your investment portfolio in a way that provides you with higher profits and limited losses.

Related posts:

• Asset Allocation for Retirement
• Correlation: The Reason For Asset Allocation
• Asset Allocation for Retirement (The Details)
• 5 Steps to Creating a Successful Financial Plan
• Preparing Your Portfolio for the End of the Year

What Is Tactical Asset Allocation? is from Investor Junkie Copyright © Empowering Media, Inc.

• Guidance and 24/7 support
• Objective, 3rd party research
• Straightforward pricing
• High ranking from Barron’s
• Powerful investing and trading tools

Make The Trade Promotion

• $5 trades for 12 months
• 100 commission free trades for 60 days. Also get $100 if you deposit $25,000 or more

Free Trades for 60 days, and up to $600 cash

Related posts:

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• Barron’s 2012 Broker Survey
• 7 Great Apps from Online Brokers
• 2012 Dividend Aristocrats
• Looking to Trade Options? Here are Some of the Lowest Rate Brokers

TD Ameritrade Promotions – 2012 is from Investor Junkie Copyright © Empowering Media, Inc.

As I’ve discussed in my mint.com review, I think Mint is great for budgeting, but poor when used for investment planning. It appears Mint is targeting people just starting out with their finances (Generation Y and Z). As I mentioned, I wished for a web 2.0 app that focused more on investing: retirement, asset allocation, and taxes. I recently discovered Personal Capital, and it appears has answered most of my wishes.

Personal Capital History

Bill Harris is the founder of Personal Capital. In case you don’t know, Harris is the former CEO of Intuit and PayPal. Personal Capital is powered from another company he’s co-founded called MyVest. Bill and company raised $28 million in venture capital. Many of the employees are former Intuit employees, including the product manager I spoke with. Oddly enough many parts of Personal Capital has an Quicken like feel.

Personal Capital is targeting aspring wealthy who’s net worth is from $100,000 to $2 million in liquid assets. This is a market that is underserved by Wall Street. High enough in net worth to have complex finances, but not profitable enough for Wall Street to target. This is where companies like Personal Capital, and Betterment are targeting.

Typically the high-end brokerage houses target individuals in the ultra high net worth category, and individuals below that threshold typically have to fend for themselves. This is where Personal Capital with technology can offer the personalized service at a much lower price point than previously possible.

To give Personal Capital a test spin, I added a few account: bank accounts, credit cards and mortgage. Just like Mint, the process is easy and quick.

Personal Capital vs. Mint

• More focus on investing and retirement, than just budgeting.
• Less upselling of products and services. Mint offers many recommendations of other services.
• A really neat interactive allocation graph that can break down your investments with ease.
• Today’s market movers, and your performance compared to the major indexes.
• Performance of your investments. Unlike Mint, Personal Capital currently cannot compare to the major indexes over time (but is a planned feature).
• Security is more robust with Personal Capital.

Features

• Stock Option Tracker – Track stock options value and exercising from the company you work with
• Tax Optimization – Are your investments fully optimized for taxes? Though currently Personal Capital does not understand the difference between taxed differed accounts and taxable accounts (another planned feature).
• Investment Checkup – Are you meeting your retirement goal? It is simplistic compared to other planners, but a good starting point.
• Asset Allocation Target – Are you overweight or underweight in any of the major equity categories? This currently lacks customization with adjusting allocations, and is currently hard coded to their formula (additional future feature).
• Fund Costs – How much in taxes and expenses does it cost you with each fund you own? Currently does not understand taxable, and tax differed accounts.

The Good

• Encompasses all your finances. While I liked Betterment’s service, it doesn’t include the big picture. Personal Capital on the other hand gives you access to all your finances in one location.
• Gives you a broad overview of your investment portfolio. Many investors are forced to have accounts as multiple brokers. Personal Capital imports them all into one central location where you can view your asset allocation and tax mix.
• Similar to Morningstar’s X-ray tool (which they get their feed from), Personal Capital offers a great way to drill down into asset allocation and tax optimization.
• Apple iPad app – Features are similar to the desktop edition and can be used on the go. Though no iPhone or Android app, yet (though planned)

The Bad

• Has enough features to be useful and a good product, but currently lacks some features to make an exceptional service. In discussing with the product manager they are constantly adding new features. I suspect some of the current deficiencies will be resolved in future product life cycles.
• Tax cost isn’t aware of accounts that are tax differed.
• Asset Allocation is not modifiable – Personal Capital determines your asset allocation for you (which is good for many), but not if you want to vary from their recommended allocation. I inquired about this, and stated is a planned feature in a future version.
• Incorrect Allocation of Investment – For at least one account I imported it incorrectly categorized my investment, and there is no way to adjust this with Personal Capital. I imported my Lending Club account, and it categorized my notes as cash. I contacted customer service, who hasn’t yet determined the asset class Lending Club investments should be categorized. I consider it in the bond category, but they don’t. So in the their asset allocation it currently shows up in the wrong grouping.

Security

As I mentioned in my Mint review, the security is similar but overall much better. Personal Capital requires you to register each computer you use. They will send you either an E-mail or text message via your cell phone, so it’s poor-mans version of two factor authentication. Once your computer is registered, you will not need to go through this process again. Like many banking sites, they also have a security image that you pick out from a list, preventing scrapped versions of their site from hackers. All of these in my opinion are needed with Mint.

Wealth Management

Their web site of course is free to use (following the freemium model), so you have no obligation to use their fee-based services. Their annual fees for their investment services:

• $0 – $250,000 costs 0.95%
• $251,000 – $500,000 costs 0.90%
• $500,001 – $1,000,000 costs 0.85%
• $1,000,000 – $5,000,000 costs 0.80%
• Greater than $5,000,000 costs 0.75%

This is much lower than traditional financial advisor fees. This includes trading and custody costs, as well as personal advisory. Every account gets a dedicated adviser. It’s been stated each advisor within the firm handles approximately 200 clients

The asset allocation with them get interesting though. Personal Capital uses baskets of individual securities and ETFs to create the model portfolio. The logic is instead of using index funds, which adds on top of their management fees, and therefore decreases your annual returns. In addition, individual securities are much more tax efficient (if it were in a taxable account). So while their basket of funds won’t mirror a index fund exactly, it will come very close, and should be lower in fees and taxes.

They also offer “Personal Funds” which target a specific investment objective, but unlike a mutual fund you own the individual securities than a mutual fund.

Summary

Personal Capital service is free to sign up, and you are at no obligation to use their premium services. So from my experience, I like what I see so far. I believe future versions of their service will be extremely powerful, and will tap into an often ignored market. Though Personal Capital’s service isn’t perfect yet.

For me personally, I’m not sure I would use the wealth management service. Though there is a valid argument why someone would want to use their service instead of doing it themselves. For me it’s not because I don’t trust their service, it’s because of the lack of flexibility and I enjoy researching and managing our finances. If I did use their service it would be for a small subset of our portfolio. I could see for others Personal Capital is a godsend because they have no idea how to properly allocate their investments for retirement.

Fellow readers try the service out. I’m curious what others think of their service. Please make your comments below.

Related posts:

• Mint.com Review – Should I Use Mint?
• What Is Human Capital?
• Morningstar Review – Premium Membership
• Are Those Long Term Capital Gains, or Short Term Gains?
• Fidelity Investment Rewards Visa Card Review

Personal Capital Review – Investment Centric Version of Mint.com is from Investor Junkie Copyright © Empowering Media, Inc.

Have you heard of the FinCon12?  It is a conference for personal finance bloggers.  This year it will be held in Denver, Colorado in early September, and I have decided to attend.  This will be a great opportunity to meet other finance bloggers face-to-face and to share knowledge with one another.

Here is what I am reading this weekend:

The Real Tax Rates of the Rich: WSJ  While the media is fond of using Mitt Romney’s tax rate as proof that the tax code is unfair and the rich should pay more taxes, this report shows that Romney is the anomaly.

Peer-to-Peer Lending Grows Up: Consumer loans Attract Large Investors:  Alchemy Magazine  Borrowers seek to ease the burden of high credit card interes rates and seek out P2P loans, while investors see greater returns than they can get almost anywhere else.  P2P, while not completely without risk, seems like a win-win borrowing/investing opportunity.

Many Americans Save Plenty for Retirement:  Smart Money  This study suggested that the majority of those who are approaching retriement are ready with nearly $359k saved for retirement.  That still doesn’t seem like a lot to me, though.

Taxes: Who Is Really Paying Up?:  WSJ  Interesting breakdown of who pays what taxes, including 1,470 millionaires who paid no taxes in 2009.

Senate Rejects Buffett Rule – Fighting Stupidity with Logic:  Darwin’s Money Great analysis of why the Buffett Rule never made any sense.  Thank you for the voice of logic, Darwin’s Money.

Related posts:

• Weekend Reading for April 13, 2012
• Weekend Reading for April 27, 2012
• Weekend Reading for April 6, 2012
• Weekend Reading for April 11, 2010
• Weekend Reading for March 16, 2012

Weekend Reading for April 20, 2012 is from Investor Junkie Copyright © Empowering Media, Inc.

American investors have traditionally favored domestic investments over international stocks. The reasons for domestic investment are varied, but the prevailing reason may just be that the US markets are international – the American stock markets are the largest in the world by assets. Investing internationally is an excellent way to improve your total portfolio diversification.

Segmenting Geographic Investments

One can make the case that American firms are very much proxies for international economic growth. Google, Microsoft, Coca-Cola, and other large cap stocks have practically just as much interest in foreign markets as they do at home. The important thing to remember, however, is that the earnings attributable to any of the above firms all flow into the same bank accounts.

That is to say international earnings may subsidize local weakness. Or local earnings strength may subsidize international earnings weakness. To go overseas requires real, tangible investment interest that is not connected to a corporate entity at home. Holding stock in firms in your local market with some overseas exposure is vastly different than owning shares of two companies, one wholly American, and another entirely overseas.

Displacing International Investment Risk

International investments are not without their risks, which investors should seek to minimize. More importantly, investors should align their risks with potential rewards. It makes little sense to accept more risk in a portfolio if the expected returns do not increase at the same time.

Some of the most prominent risks in the emerging markets are:

1. Foreign-exchange risks – The relative value of an American dollar to a foreign currency. Fluctuations in currency values can offset gains or losses in international investments. Likewise, fluctuations can also compound gains or losses.
2. Political risk – Emerging markets are notorious for problems that relate to politics. There are countless concerns here, ranging from regulatory issues and corruption to the simple understanding that a government in power today may be gone tomorrow.
3. Informational risks – The United States has the most stringent accounting and disclosure rules of any country around the world. Public information taken for granted by American investors is far better than information available to investors in other markets. Where there is less information guiding a particular investment decision, additional risks exist. Investing is all about reliably predicting the future.

Investors who wisely manage their portfolios should be able to minimize these risks while improving the potential upside. While these risks are inherent in any international investment, investors do not have to accept risk without reward. Let’s look at how investors can better align potential reward with the international risks.

Spotting Unique Opportunities

Emerging markets have something unique about them: growth. In particular, markets like China, India, Brazil, and (to a lesser extent, Russia) all have the makings of a growth story based on an emerging middle class.

An emerging middle class in fast-growing international markets makes a great case for investment interest. However, it makes sense to pursue an investment when it can be directly tied to the catalyst for emerging market growth.

International Investing Example

Investors seeking access to Russian markets could buy one of many hundreds of Russian oil firms. However, there is nothing that delineates Russian oil from oil produced elsewhere around the world. In this case, the investor accepts greater risk in an emerging market without extra upside.

International investments with better links to the consumer are a far better wager on a risk-to-reward basis. Consider Tata Motors in India, the largest auto producer in South Asia. The company derives a majority of its earnings in India and China, where it sells very popular commercial and consumer vehicles. Compared to American automakers, it is much better positioned for sales to new middle class families and businesses that serve the new Asian middle class.

The risk is the same – political risks, currency risk, and informational risk are no different by sector, however the upside with vehicles is far better than oil, as it is directly-related to the growth story in the particular market. All things considered, an American investor wanting access to Asia’s rapidly growing consumer market would do better to be invested in cars than a foreign oil producer. Oil prices are smoothed by international demand from all over the world; car sales in a specific region have everything to do with local, not international, developments.

How to Find Quality Funds

If international funds are your preferred method to find international exposure, a quick glance of the fund’s investment exposure can show just how well connected the fund is to the international growth story.

Let’s compare two example exchange-traded funds, INDY and SCIF. INDY is an Indian large cap fund. The SCIF ETF is a small cap fund for Indian securities. A quick look at INDY shows that more than 50% of the fund is invested in financials, technology, energy, and consumer defensive stocks – these are all products that have only minute exposure to a growing middle class.

The SCIF ETF, on the other hand, has far more invested into consumer cyclicals, which make up 21% of the fund. The other largest sectors include industrials, real estate, and basic material stocks, which have some but, not a lot, of exposure to rising wages. In any event, the fund holds nearly twice as much of the “good stuff,” consumer cyclical stocks, as the INDY fund.

When it comes to developed markets, the closer you can get to the consumer and further you get away from commoditized sectors, the better your fund will respond to the emerging markets. Ideally, investors would opt for funds with the highest concentration in investments like consumer products and real estate and shy away from funds concentrated in energy or financial services companies, which have virtually the same business model and opportunities regardless of geographic area. Energy and financial services exposure is best kept at home, since there is no reason to interject risk into a sector just for the purposes of diversifying internationally.

Related posts:

• Leave Investing To The Professionals
• Ginnie Mae Investing
• REITs vs. Real Estate Investing
• What I’m Investing In Now
• There’s No Such Thing as a “Risk Free” Investment.

Investing Internationally – How to Get the Best Results is from Investor Junkie Copyright © Empowering Media, Inc.

When you own a small business, it’s easy to overlook investing in a retirement plan. After all, you don’t have “the man” to remind you that you should have a retirement plan — and you don’t have that matching contribution.

The good news, though, is that you have the potential to contribute more to a retirement plan if you are a small business owner. No matter how much money you make, your contributions to a retirement plan offered by your employer are limited to the current year’s contribution cap ($17,000 in 2012 for a 401(k)). On the other hand, if you are a small business owner, you can choose from several different options — some of which allow you to contribute more to your retirement.

As a business owner, you need to follow one of the basic tenets of financial literacy and set up a retirement plan. Two common and simple choices are the SEP IRA and the Individual 401(k).

SEP IRA

Your SEP IRA works a lot like a traditional IRA. However, this type of plan is aimed at small business owners and the self-employed. It’s easy to set up, and offers an above the line tax deduction for your contributions. However, a traditional IRA (and a Roth, for that matter) come with rather low contribution limits. The main advantage of the SEP IRA is that, in addition to being easy to set up, it allows you to make larger contributions: The lesser of 25% of your net earnings as someone self-employed or $50,000 (for 2012).

Individual 401(k)

Sometimes, you will see this type of plan referred to as a solo 401(k). As you might expect, it functions very much like a regular 401(k), with your pre-tax contributions helping you out. However, the individual 401(k) is where you really shine when it comes to contributions. You can make an employee contribution of up to $17,000 (for 2012), and you also get to make an employer contribution to your account, using the 25% of earnings as a guide. Your total contribution is capped at 100% of your net earnings, or $50,000.

What is 25% of Your Earnings?

Both of these plans refer to 25% of your net earnings. Realize that your net earnings consist of your revenues, minus your expenses. On top of that, you have to deduct one-half of your self-employment tax, and you have to consider contributions you make to your retirement plan. In order to simplify this process, many experts recommend that you figure up your net earnings without including your contribution, and then take 20% of that number to account for the retirement account contributions you haven’t made yet.

Which is Better?

If you are going strictly by which plan allows you to make higher contributions, the individual 401(k) is the way to go. Let’s say that your net earnings before you deduct your contributions is $100,000 for 2012. With the SEP IRA, you can contribute $20,000. If you have an individual 401(k), though, you can contribute $17,000 as an employee, and then also make an employer contribution of 20% of your earnings, for a total of $37,000. That’s a big difference.

However, you should realize that if you have even one employee (other than your spouse) that works more than 1,000 hours in a year, you can’t use the individual 401(k) (although you can offer a 401(k) plan as a business owner). If you have employees, you need to use a SEP IRA for your self-employed retirement planning.

Related posts:

• How Companies Distort Earnings with Pensions
• Why Your Small Business Should Offer a 401K
• Weekend Reading for February 13th 2011
• Preparing Your Portfolio for the End of the Year
• Financial Literacy for Small Business Owners

SEP IRA vs. Individual 401(k) is from Investor Junkie Copyright © Empowering Media, Inc.

When starting a small business, it’s easy to get caught up in the day-to-day operations. In many cases a small business owner starts something up without really considering the financial situation. Some business owners even make their personal finances secondary to trying to get the business off the ground. However, as Financial Literacy Month continues, it’s important for a small business owner to stop and think about his or her own level of financial literacy.

How Financial Literacy Helps Business Owners

Because business owners are in it, presumably, for the money, it makes sense to understand how money works. Financial literacy isn’t only about knowing where the money comes from and where it goes. It’s about understanding how money works, and being able to see how to spend money to make money, and knowing how your decisions are likely to affect profitability.

Additionally, financial literacy for business owners is important since it helps them make better choices about what to do next. Whether it’s hiring a new employee, or deciding on the right advertising medium, it’s a good idea for business owners to understand basic finances. Financial literacy also helps you understand how to secure your future, and how to use the earnings from your business to enhance your personal life — including your retirement.

Financial Issues Small Business Owners Should Consider

There are numerous financial items that small business owners should be concerned with. However, some of the most important points of financial education include:

• Taxes: One of the important things to understand is the tax situation. Are you paying yourself a salary? How will it be taxed? Do you need to pay self-employment tax? Also, be aware that you need to pay quarterly taxes, including your portion of payroll taxes for your employees.
• Cash Flow: Do you know how money moves through your business? Know when you expect income, and when bills are due. You should match up your income to when you owe money, as best you can. It’s also important to know when your employees are paid, and to consider setting aside surplus some months to help with lean months.
• Succession: Another aspect of financial literacy that business owners should understand is that of business succession. What will happen to your business when you are ready to retire? You need to have the financial education that allows you to plan out what you want the next phase of your company to look like, as well as the knowledge to implement that plan.

These are just some of the issues that small business owners should understand. While it’s true that the right accountant can be helpful when it comes to managing your finances and making sure everything is done properly, it’s still important for you to have an understanding of how your business works in relation to money. You need to be educated about finances so that you can find more effective solutions to problems, and better manage your own personal finances so that you are ready for the future.

Related posts:

• Financial Literacy and Mortgage Delinquency
• Why Your Small Business Should Offer a 401K
• Small Business Financing Options
• How A Small Business Can Perform Like Wynn Resorts
• Small Business Marketing Strategy for the Best Results

Financial Literacy for Small Business Owners is from Investor Junkie Copyright © Empowering Media, Inc.

In the last few weeks, there has been speculation that N. Korea would launch a long range missile and that George Zimmerman, the man who shot Trayvon Martin, would be charged with murder.  Yesterday, both events occurred.  Luckily, the North Korean missile seems to have fallen apart and dropped into the ocean.  George Zimmerman was charged with second degree murder and waits in prison until his hearing in May.

Here is what I am reading this weekend:

Can You Get Rich by Visualizing Yourself Rich:  WSJ  Visualization is a powerful tool.  People use it to help them fight cancer, and athletes use it to win medals.  Some also believe you can use visualization to make yourself rich.

The Obama Rule:  WSJ  If it wasn’t clear before, it is now.  Obama is focused on “fairness” without regard to other factors, as he tries to push the Buffett rule.

Obamacare May Explode the Deficit By More than Anyone Thought:  Business Insider  As if the deficit wasn’t high enough, we could be facing a staggering deficit once Obamacare goes into full effect.

Best Money Moves in Your 40s and 50s:  Money  75% of successful retirees put away a great deal of money in their 40s and 50s.  Here are eight ways they did it.

How a High-Earning Couple Got Roth IRAs and You Can Too:  Forbes  Make too much to contribute to a Roth IRA?  Follow these two steps to gain “back door” access to the Roth.

Related posts:

• Weekend Reading for April 6, 2012
• Weekend Reading for April 20, 2012
• Weekend Reading for April 27, 2012
• Weekend Reading for January 13, 2012
• Weekend Reading for February 17, 2012

Weekend Reading for April 13, 2012 is from Investor Junkie Copyright © Empowering Media, Inc.

Pensions can be a proverbial slush fund for management eager to hit earnings projections quarter after quarter, and year after year. What many investors don’t realize is that defined-benefit plans in major companies can be a source of long-term “profits” no matter how poorly the underlying business is performing.

The Mechanics of Pensions

Pensions can come in two forms: defined contribution plans and defined benefit plans. Defined contribution plans are those like the 401(k), which are much more difficult for companies to fool with to achieve their earnings projections. We’ll stick to defined benefit plans, those that fit the traditional profile of a pension where workers receive a percentage of their earnings in perpetuity after their retirement date.

Defined benefit plans require long-term projections for any business. The setup shifts the burden of retirement to the business, which must save a portion of its employees’ pay so as to cover the future costs of their retirement. Like individuals, businesses must plan to save enough given an expected annual return so as to have enough in cash and investments to pay out pensions decades into the future.

Making Pension Projections

Businesses have to report their pension surpluses or deficits in each quarterly or annual report.

To project the total costs of a pension, the business relies on actuaries who forecast how many payments will be made to each employee before the average worker passes away. This is mostly an mathematical certainty, as we know with very good accuracy how long an average worker is expected to live and thus how long the median person will receive benefits paid by the company.

Projections are then made for the projected benefit obligation. The projected benefit obligation is the amount that the company will have to pay out on an actuarial basis over a very long time. This amount is then discounted back to today using an expected growth table for investment gains on pension assets.

Thus, we use the “plan assets” reported in any filing and the “projected benefit obligation” to determine whether or not the pension is adequately funded.

• If plan assets are greater than the projected benefit obligation, then the pension is over-funded – there is enough capital to continue paying pensions at the current rate well into the future.
  
• If plan assets are less than the projected benefit obligation, then the pension is underfunded, meaning the business will have to contribute more to the pension fund, or achieve a higher rate of return.

How Companies Fool Investors with Pensions

Accrual accounting allows for a myriad of methods to fool investors when it comes to short-term earnings. (This is just one of the many reasons why so many investors focus on free cash flow – it’s hard to fake cash, and much less difficult to fake earnings.)

Here are just a few ways pensions can be used to buffer earnings:

1. Changing the discount rate – Changing the discount rate on pension assets is a great way to uncover more cash. By decreasing the discount rate from 4% per year from 3%, for example, a business can easily see its pension assets skyrocket as its obligations to workers are held constant. An underfunded pension quickly becomes overfunded, and the surplus can be removed from the pension balance and recorded as income, even if there was no real change in the underlying pension assets. Less future obligations means more earnings in the present, as earnings are realized today and not over time with accrual accounting.
2. Changing wage growth – A reduction in future wage growth tends to affect pensions, as pensions are calculated based on the wages of employees. By shifting downward future wage growth, the pension sees lower future obligations to employees.
3. Juicing expected returns – A higher return on pension assets allows for the company to dedicate fewer assets to cover future pension payments to retired employees. The problem is that markets are not 100% predictable, and often a pension will fall short of the expected return.
4. Liability hiding – An underfunded pension is a very real liability. However, you will not find pensions listed in balance sheet – pensions are an off-balance sheet liability much like long-term leases, joint ventures, or other irregular programs not generally considered debts. This does not directly affect earnings, however, it does allow for firms to score higher in terms of debt to equity, or return on equity calculations.

How to Fight Pension Differences

The complexities of pensions were first brought to light to the masses by Benjamin Graham, one of the world’s best value investors. In his book, Securities Analysis, he lays out the case for better accounting of pensions. Several decades later, accounting standards have improved, though investors still need to exercise caution.

Some key disclosures make finding pension problems easier for investors:

1. Equity and fixed-income split – Companies are required to show how pension funds are invested in a split between equity investments (stock) and fixed-income products (mostly bonds). The returns on the pension program can be compared to a similar split of indexes to determine whether or not the pension can reasonably keep pace with expected growth.
2. Discount rate adjustments – Discount rate adjustments are reported in the disclosures section to highlight changes up or down and the rationale for such a change. Beware that increases in the discount rate make expected obligations smaller, and decreasing the discount rate makes expected obligations larger, all else being equal.
3. Labor cost increases – Companies should report the number of participants in the plan, and should make note of the company’s own contributions toward a defined benefit program. Expected wage growth should also be documented in the disclosures. In the best case scenario, companies should forecast wage growth at the current inflation rate, if not higher.

Ideally, companies would project higher than average wage growth, a low discount rate, as well as a low growth rate going into the future. Lesser companies will report low wage growth, a low discount rate, and a low growth rate greater than or equal to the discount rate so as to hide a pension that will undoubtedly become insolvent in the future.

Luckily for investors, the defined benefit pension previous generations may have enjoyed is going the way of the dinosaur. Fewer firms offer defined benefit programs to employees, and many are switching to defined contribution plans, as retirement planning considerations can then be shifted away from the business and to employees.

Next time you see a company post higher or lower earnings, look to the pension disclosures to see if any of the change is due to pension differences. In rising markets, higher equity prices allow for companies to report a blossoming pension fund balance.

Related posts:

• Why PE Ratios Don’t Matter
• Could Disney Make a Good Addition to Your Income Portfolio?
• You’re A Patsy If You Buy Facebook’s IPO
• Investing Internationally – How to Get the Best Results
• What Is Profit Margin?

How Companies Distort Earnings with Pensions is from Investor Junkie Copyright © Empowering Media, Inc.

Let met first state no offense to other personal finance bloggers out there, but there are only so many ways to talk about debt. Unlike most Americans, I admire you’ve taken action, and decided to document the process to get out of debt. Though you can only talk about Dave Ramsey’s “debt snowball” in so many ways, or how to cut corners with your budget.

The whole purpose of Investor Junkie was to discuss topics no one else was discussing. To zag when everyone was zigging. There is a classic metaphor that I believe in: if you do what everyone does, you’ll get what everyone has. No truer words have been spoken when applying the metaphor to personal finance. Getting out of consumer debt is easy. You spend less than you earn, and pay off your debt with the difference. To discuss investing, while not technically difficult, is typically beyond the grasp of many Americans. It’s not an instant gratification, and takes a lot of time to see results.

Ironically, most personal finance blogs mimic what we see in society: lots of debt and very little investing.

The “getting out of debt” personal finance blogophere is a crowded niche. There are many blogs that discuss this topic, and typically the demographic who also reads the articles has no money. It’s like trying to draw blood from a stone. So while I believe it’s important topic to discuss, don’t expect business income miracles if you target this niche.

I also prefer to discuss more positive topics and investing is one of them. To me, consumer debt is a very negative topic and emotion. Incurred debt is because of something you did in the past. I would rather discuss my future and my children’s future, which investing is all about. Investing is about growing, and assumes the future is better than the present; that you’ll have more money in the future than now. The universe is ever expanding, and so should your finances!

A few personal finance bloggers state if you focus on writing great articles, your blog will become successful. Nothing can be further from the truth! If that were the case my friend from college, who wanted to be the next Steven King, would have been wealthy years ago. He’s a great writer, but lacks business skills. Writing is just one aspect of a successful blog.

Are You A Business, or Hobby?

If you want your online venture to be a serious business, you must treat it as such. Otherwise your blog is a hobby. There is nothing wrong with a hobby. Just understand it isn’t a business and you won’t generate much income from it. So while you still need to write compelling articles, it’s much more than just that. This is no different than a business that just focuses on the technical aspects, without the sales, marketing and customer service. The business will fail miserably, and the same applies to a blog.

My point in writing this post isn’t to boast how great my blog is, or why others fail miserably. My point is if you want to get where you want to go to, you must focus on it, massively. Know the true purpose of your business, and make sure you are climbing the right ladder.

What Is Your Purpose?

For example, this blog isn’t about me. It’s about educating others about various business and investment topics. While I may get something from writing and researching articles, it’s not the primary purpose. The primary purpose is to empower others to make better investment decisions.

In addition, just focusing on debt reduction will reduce the debt. There is no question about it. Which is fine up to a point, but it will not make you financially independent. I assume this is the real outcome everyone wants to achieve, but in reality people rarely achieve it. The sad fact in our society, many consider the lotto as a form of “investing”.

Statistics show most people by 65 years old are either dead broke or dead! Most will run out of money before they run out of life, which is a very scary thought.

I suspect many who write these personal finance blogs are in the 20′s and 30′s. It’s best now to start focusing on saving and investing, even if you still are in debt. Learn as much as you can now, even if you have little or no money to invest. Because if you really want to achieve your goal, you’ll need to learn how to invest.

If you are a personal finance blogger, step up and know your true purpose. Be more than just a writer.

Related posts:

• Carnival of Personal Finance #275: School House Rock Edition
• The Best Finance Books
• Obama Educates His Children About Finance
• Personal Capital Review – Investment Centric Version of Mint.com
• What Makes Debt Socially Acceptable?

Most Personal Finance Blogs Suck! is from Investor Junkie Copyright © Empowering Media, Inc.

One of the ways to make money investing is to use stock options. Options give you the right to buy or sell at a particular prices, within a certain time period. You have the option to complete the transaction, but you are under no obligation to do so. In some cases, this can result in profits, if you know how to trade at the right time, and in the right way.

What Are Your “Options”?

It’s possible to trade stock options through different online brokers — many of which even provide you the opportunity to use mobile trading apps to execute your options orders. But, as with all investing, it’s important that you pay attention to fees. Higher fees can erode your returns. If you are looking to save on fees, here are some of the brokers that offer lower-cost options trading:

• OptionsHouse: If you are looking to trade options, someplace like OptionsHouse can be a good deal. There is a 5 for $5 promotion on, or you pay $8.50. There is also a $0.15 per contract charge. OptionsHouse also offers 100 free trades with a new account. The margin interest rate is 4%, and there is no minimum balance.
• Zecco: Zecco is fast becoming a go-to brokerage for those looking to trade a number of opportunities (Zecco even offers forex trading). The commission at Zecco is $4.50 + $0.50 per contract on options. Trading on margin requires a $10,000 minimum, and comes with a 7.20% interest rate.
• TradeKing: This brokerage offers prices that are slightly higher than Zecco’s. There is a $4.95 + $0.65 per contract fee to trade options. However, TradeKing is a very trusted name in online brokerages, and many like the familiarity. Plus, if you trade on margin, there are no minimums and the interest rate is 6.50%
• Scottrade: This is the point at which we start seeing the costs head a little higher for options trading. Commissions on options are $7.00 + $1.25 per contract. However, there are no minimums for margin trading. The interest rate is on the high end, though, at 7.75%.
• Charles Schwab: Many brokerages charge the same base commission for stocks trades as for options trades. Charles Schwab, though, actually offers a lower flat base rate on options than it does on regular stock trades. Instead of $12.95 for stock trades, Charles Schwab offers options trades at $8.95, and the additional $0.75 per contract. The minimum for margin trading is $7,500, and the interest rate is 8.50%.
• TD Ameritrade: You can trade commission-free for 30 days at TD Ameritrade. There is a $9.99 + $0.75 per contract cost on options. You don’t need a minimum balance to trade on margin, but there is a rather high interest rate of 9.25%.
• ShareBuilder: Even though ShareBuilder’s commission is slightly lower than TD Ameritrade’s, the per-contract options fee makes up the differences and means that TD’s is slightly lower. ShareBuilder costs $9.95 + $1.00 per contract. The margin rate, though, is lower at 8%, and there is no minimum balance.

Other online brokerages like TradeMonster and E-Trade charge more than $12 for a base commission on options trades. ThinkorSwim charges a $9.95 base rate, but there is an additional $2.95 per contract charge on options. Before you get into options, make sure you understand how they work, and be careful about the fees you pay.

Related posts:

• E*TRADE Enhances E*TRADE Pro Platform
• 7 Great Apps from Online Brokers
• TradeKing Lowers Their Option Pricing
• TradeKing – Trade Free On Friday
• Is E*Trade Up For Sale?

Looking to Trade Options? Here are Some of the Lowest Rate Brokers is from Investor Junkie Copyright © Empowering Media, Inc.

Mitt Romney seems to have the Republican nomination all wrapped up, but Rick Santorum refuses to stop now.  We might have a few more weeks before the official nominee can be named, though Romney and Obama already have their sights set on one another.

The National Debt and Federal Budget Deficit Deconstructed:  Tony Robbins – YouTube  This excellent video provides a good summary of our current national debt dilemma.

Be Careful Who You Turn to For Investing Advice:  Forbes  Too many people take investment advice from others who are not professionals.  Here is a good example why you should not.

Why Starting a Business Is Not That Risky and Costs Less than You Think:  Planting Money Seeds  Looking to start a business?  Take inspiration from Steve.  He and his wife launched a business with less than $700 and made a six figure profit the first year!

Tax Freedom Day Arrives on April 17th:  Millionaire Corner  You’ll have to work until April 17th to meet all of your tax obligations for 2012.  See how tax freedom day is computed and when it has arrived in earlier years.

Two Legendary Market Gurus Say It’s All Over For US Treasuries:  Business Insider  This may be a public television show that I plan to watch.  See what Paul McCulley and Bill Miller suggest instead of bonds.

Related posts:

• Weekend Reading for April 13, 2012
• Weekend Reading for April 20, 2012
• Weekend Reading for April 27, 2012
• Weekend Reading for April 11, 2010
• Weekend Reading for March 30, 2012

Weekend Reading for April 6, 2012 is from Investor Junkie Copyright © Empowering Media, Inc.