With chatter about a bubble in bonds building, it may be a good time to look for alternative sources of investment income. One such source has long been dividend paying stocks, trusts and partnerships. Here are two such dividend plays – one is a Real Estate Investment Trust, and the other is an energy partnership.

Annaly Capital Management, Inc. (NLY)

Annaly Capital Management is a mortgage REIT (real estate investment trust), and as such the company is not subject to federal corporate income tax, provided it distributes at least 90% of its taxable income to its stockholders in the form of dividends. NOTE: The income generated by a REIT may be taxable at your income tax rate, and not at the capital gains rate. So check with your tax advisor if this is a point of concern.

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What makes NLY attractive.

One of the things that makes Annaly Capital attractive is its low debt level compared to other REITs and owners of Mortgage Backed Securities (MBS). For example, Commercial banks are typically leveraged 30:1; thrifts – 25:1; hedge funds – 20-30:1; and Annaly – 8-12:1, or less than half that of a typical thrift.

Another thing is that the MBS that Annaly Capital invests in are backed by agencies of the U.S. government like Ginnie Mae, Fannie Mae and Freddie Mac. While these agencies are essentially bankrupt, the government is not likely to let them fail so they have a de-facto credit rating of AAA.

NLY dividend history.

NLY has increased its dividend from about $2.20 per share in 2008 to $2.4 in 2009, while the yield has declined from 16.6% to 13.4% as the price has risen. At the time of this post, NLY was yielding 16.80%, or $3 per share annually.

How safe is NLY dividend?

At first glance, there’s a lot of scary stuff to be seen in the summary of Annaly. After all, it was imploding Mortgage Backed Securities that began the current recession and market crash of 2008-2009. And Annaly is using leverage to purchase these securities, leverage which magnifies gains AND losses alike.

But upon further inspection, the credit risk for Annaly seems low because the MBS that it invests in are backed by the U.S. government and, as mentioned above, their leverage rate is lower than the industry average.

What can affect its performance (and dividend) is a major swing in interest rates. This is largely because of its use of leverage, or borrowing, to magnify its returns. But if management can keep ahead of rate trends it can limit the squeeze that variable interest rate MBS put on Annaly’s profits.

• A Sample ETF Portfolio for Maximum Income (and Fat, Juicy Yields). With the low fees and wide selection of ETFs, you can now build a portfolio for maximum and minimum fees relatively easily. Here's one such sample portfolio from Kiplinger that allocates 65% to bonds, 35% to stocks. The bond section is spread between conservative, laddered treasures and riskier junk bonds.......
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Stock market analyst Robert Prechter is seeing what he calls “the Biggest Bubble in History”, and that’s not a good thing for investors.

According to The Wall Street Journal, Prechter told the Society of Technical Analysts in London that we are in the midst of a “grand, super-cycle top” and that all the signs are pointing toward a big market correction.

He’s got some street cred, given that he called the recent rally back in February of 2009. In fact, he said it would be “sharp and scary” for anyone shorting the market at that time.

According to Prechter, the most recent recovery gave all the text book signs and now he seeing text book signs again, but they foretell a big correction on the horizon. He points to the near record low levels of cash at mutual funds. He sees those levels approaching levels seen near major tops in 1973, 2000 and 2007.

As for the “Biggest Bubble in History”, he says that’s debt. Specifically, Corporate debt, municipal debt, mortgages and consumer loans which he speculates will get hammered by the deflationary period that began with 2005’s turnaround in home prices.

Time will tell if he’s right, but it may be time to put your stops in place and watch this video to see Prechter in his own words.

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When the calendar passed from December to January, we bid a not so fond adieu to 2009 as well as the rollover income limitation associated with transitioning a traditional IRA to a Roth IRA. This is a good thing if  converting to a Roth IRA makes sense for you.

The Roth IRA is one of the best retirement and estate planning tools available, and with the recent change in restrictions and tax payment scheduling, 2010 is the year of the Roth. Quite simply, if the Roth makes sense for you then 2010 is likely the year to make it happen.

Here are 8 ways not to screw it up.

1. Just Do it.

As many experts look at the mounting federal deficits and growing number of states in danger of bankrupting themselves, they see no choice but for taxes to skyrocket. Maybe, and maybe not. I’m not going to get on a political riff on the subject of reckless spending and taxes. I just want you to be aware that the chances are slim that tax rates will stay at their current rates, which are historically low.

So, the question for long term investors is not whether to fund a Roth, but how to fund a Roth IRA. Regarding a rollover from a traditional IRA, your choices are essentially:

1. Convert your IRA all at once.
2. Convert your IRA in stages, or segments.

Either way, if you don’t at least start to convert now, and you wait to do it later it may cost you dearly in terms of taxes. If you’ve decided that a Roth isn’t for you, then… why are you reading this article? Besides, since January 2010, all income limitations have been removed.

2. Understand the tax consequences.

Deciding to wait and do a conversion after taxes rise is a costly mistake, but so is jumping into a conversion without understanding the full tax implications.

For example, if you’re in a 15% income tax bracket today and you rollover a $250,000 IRA you will not pay 15% in taxes. You will end up paying quite a bit more because that $250,000 distribution can be counted as income, according to Barry Picker (who recently served as the technical editor of “100+ Roth IRA Examples and Flowcharts,” by Robert Keebler) and that will most likely bump you into a higher income tax bracket.

3. Know the direction of your tax bracket.

If you are the sole breadwinner today, but your spouse is likely to re-enter the workforce in a year or two, then you’re better off converted at today’s lower tax rate. On the other hand, if your spouse is considering staying at home with the baby that’s due in a few months, you’re better off waiting until she leaves the workforce and your combined income drops. Likewise if you file solo, but you’re thinking of tacking a pay cut to switch careers. Time your conversion when your tax rate is likely to be on the low side.

4. Don’t pay taxes with money from your transaction.

Paying the taxes with money you have withheld from the rollover transaction is a bad idea for a number of reasons, including:

Every penny you take out of the transaction is less that goes to work for you in the Roth.

The amount withheld goes to the IRS as an advance payment, and also reduces the total conversion amount. Hence, the amount withheld is considered a distribution and not part of the conversion and can impart further tax liabilities. For example, if you have a $100,000 IRA that you convert to a Roth IRA and withhold $20,000 (20%) for taxes, then the $20,000 is treated as a distribution and may be taxable in itself.

If you need to reverse the conversion (called a re-characterization – more on that below), then you can only reverse the amount actually converted. In the example above, you could reverse the $80,000 conversion, but you’d be out that $20,000 permanently – and you would still owe taxes on the $20,000.

The amount withheld for taxes is also subject to the 10% early distribution penalty, unless you are 59 1/2 when the conversion occurred.

5. Be a good judge of re-characterization.

If not converting is a mistake, not paying attention to your Roth after you’ve converted is a huge mistake. Here’s why – and incidentally, here’s one of the greatest aspects of the Roth IRA conversion. It’s called “re-characterization” and here’s how it works.

Re-characterization allows you to undo a conversion if the market value falls below your conversion amount. It’s the mulligan of the Roth world. Here’s an example:

You have $100,000 in your traditional IRA when you convert it to a Roth IRA. After a while, the your Roth is worth only $50,000. If you left your Roth alone, you’d owe taxes on the full amount at the time of conversion – $100,000. But, if you re-characterize your Roth (i.e. undo the conversion, you get your $100,000 back in a traditional IRA and you would owe taxes on the $50,000 re-characterization amount.

Of course, you have to do it before the next tax filing deadline after your initial conversion and if there are fees involved, you might want to makes sure you’ve lost enough value to make it worth your trouble.

6. Divide and conquer.

Besides the income limitations being dropped, you also get an extension on when you have to pay the taxes if you convert in 2010. For this one year only, you can spread your payment of the taxes you owe on the amount converted over the 2011 and 2012 tax periods; meaning you don’t have to actually pay them until 2012 and 2013!

7. Catch the early bird special.

If you convert early in 2010 and the market resumes its bull run, as some analysts think may happen, then you would have more time to catch those tax-free gains, while splitting the payment of the taxes owed over two year’s.

8. Hedge your bets.

You can split your conversions up into multiple conversions, by asset class for example. That way if your stocks perform well, but your bonds tank, you can re-characterize your bond conversion back into a traditional IRA and lessen the tax hit. In fact, many experts recommend slicing your IRA up into as many Roth IRA accounts as possible to gain maximum control over your taxes. This is probably only beneficial for very large accounts however.

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ING is offering commission-free trades through its ShareBuilder service for the entire year, when you open an IRA with this promo code.

Here are the details:

• All IRA plans are no-fee plans; no fees for a low balance, no fee for inactive accounts, no annual fee for being a member.

• Open your IRA account before April 15th, 2010 and set up an Automatic Investment Plan (AIP) and all automatic investment trades are commission free for 2010.

• Select over 7,000 stocks and ETFs.

• Schedule (AIP) investments on a weekly or monthly basis.

• Invest any dollar amount on Tuesdays exclusively online.

Some caveats to the offer:

• Real time trade commissions still apply to all sales.

• You can only make commission free trades on Tuesdays, and online. If you aren’t comfortable using the web site then this isn’t for you, but ING’s web sites are very easy to use.

These limitations aren’t ridiculous when you consider that you probably should keep trading to a minimum in an IRA plan anyway, and you should also make contributions in it regularly so the Automatic Investment Plan is ideal for dollar cost averaging into your IRA over the long term. Why not save a few extra dollars on each contribution?

Open an IRA today at www.sharebuilder.com/2010ira.

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Target date funds have been in the news quite a lot over the past few years, though the nature of the news seems to have gone from great to bad over that time. Consider that when target date funds were first introduced they were heralded as the pinnacle in the evolution of investment vehicles. They were the ultimate in “set it and forget” investing!

These funds were so universally praised by the investment community and politicians alike that when congress passed the Pension Protection Act (PPA) allowing companies to automatically enroll employees in 401(k) accounts, it was target date funds that were chosen most often as the default fund, or “qualified default investment alternative” (QDIA) in the lingo of the PPA.

Then the crash of 2008-2009 happened.

2010 Target date funds performed horribly in that crash. This gave target date funds a lot of bad publicity. After all, the idea of a 2010 target date fund was that it would be invested in less risky assets as 2010 got closer, right?

Maybe.

See, the problem isn’t really that these funds lost as much as the average stock fund, or even that they were tilted too heavily in the direction of stocks. There are really two problems at the root of all this:

1. The crash of 2008 was not a garden variety stock market crash.
2. People’s perspectives on retirement savings is skewed.

Problem One: The crash of 2008.

The crash of 2008 was a once in a lifetime kind of phenomenon, one in which almost every investment asset lost value. The problem for target date funds regarding this kind of crash is: where should the majority of assets held in a 2010 target date fund be allocated?

In a garden variety stock market crash, or correction of say 10-15% or even 20% loss in stocks, a hefty bond allocation is usually enough to provide proper ballast to limit the total losses for the fund. But in 2008, just about the only safe place was cash, or gold and in any normal investment environment a majority of holdings in cash or gold would be a money loser.

Problem Two: Investor perspective.

This problem affected target date funds because investors simply did not expect a 2010 fund to lose 35% -40% of its value so close to the target date. But I think this is really the result of an underlying mistake in expectation on the part of the investor.

Too many investors have it in their mind that they will be taking all their money out of the stock market when they retire.

Maybe it’s the way these funds are marketed, but I know a lot of investors think that the clock stops when they retire and that what they have in their investment account is what they have for the rest of their lives. This is simply not true. The average retiree today can expect to live another 15-20 years. The fact is that they will still need to be invested in stocks in order for their savings to last as long as they do.

Solutions.

I think just about the only solution one can have for the first problem (the unusual market crash) is to have a sizeable sum of cash saved up for immediate access if you have just retired or are about to retire when such a crash hits. Something along the 9-12 month of expenses range, maybe more if you tend to panic about finances. This ought to allow the investor to weather the crash and not have to deplete his investment account while it is suffering heavy losses.

The solution to the problem of investor perception is also covered by the huge sum of cash savings fix to the first problem, but there is also a long term mental shift that needs to happen. Investors and retirees need to consider post-retirement investing. Far too many people think about investing or saving for retirement as the end game, when in reality it’s just an inflection point where the nature of investing changes but the need continues; the only true end point is the end of life, after which you get into estate planning.

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This week’s investing term is all about investment decisions motivated by tax implications. It’s called tax selling and as the name suggests, it’s when an investor sells an asset at a loss, in order to pay less taxes when he sells an asset at a profit. The way this works is that the U.S. tax code allows individuals to use an investment loss to offset capital gains taxes on profit making asset sales.

The process is also commonly called “harvesting capital losses”, because it often involves the purposeful selling of a losing investment for the explicit reason to gain a tax advantage.

Tax selling is perfectly legal, but there are a few restrictions:

• Any assets sold for a loss must have been owned by the investor for at least 30 days prior to being sold.

• The investor cannot purchase assets of a same type within 30 days of the assets being sold.

So, you can’t buy shares in a small cap fund, sell them 29 days later at a loss to harvest the capital gain tax offset, and then buy shares in the small cap fund 15 days after you sold them. Violation of either of these restrictions is called a wash sale, and that is illegal. This 30 day limitation is often referred to as the 30-day wash sale rule.

Tax selling usually occurs in December, but keep an eye on the market as some are speculating there will be an increase in tax selling as the Bush tax cuts expire at the end of this year, and tax rates rise again.

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• Are Target Date Funds good, bad or just plain ugly? Target date funds have been in the news quite a lot over the past few years, though the nature of the news seems to have gone from great to bad over that time. Consider that when target date funds were first introduced they were heralded as the pinnacle in the......

• updating my financial goals, July 2008 Back in December, while participating in the Carnival of Financial Goals started by Patrick of CashMoneyLife.com, I gave my 2008 financial resolution. I'm pretty happy about where I'm at with it now. photo credit: Tigr Here was my resolution and how I intended to accomplish it: I will average $1000......
• Bethel Island Golf Course, Bethel Island, CA Bethel Island Golf Course is located in: Bethel Island, CA Phone: (925) 684-2654  Website: http://www.bethelislandgolf.com Course History: Bob Baldock designed this incredible course with undulating fairways that provide more than enough of a challenge for most players. It is a peaceful course and offers a great place to get......
• Cramer Wins Mr Obvious Award! I guess there isn't "always a bull market somewhere"! Jim Cramer just advised people to get out of the stock market saying that stocks might lose 20% this year. Isn't it a bit too late for that prediction? The Dow Jones Index is already down nearly 25% for the year.......
• Tax Benefits Of Passive Income Since this is tax season and this site is dedicated to earning passive income, I thought I should post something about the taxation of passive income. From the IRS's point of view passive income is any income that you get without having to to materially participate in. Examples of passive......
• How To Invest In A Low-Return Environment Nobody can predict the future, of course, but it seems likely the days of consistent double-digit returns 80's and 90's style are long gone (at least until the next bubble), which leads to a perplexing problem:  how to invest in a low-return environment?  Your financial needs surely haven't decreased along......

It’s Mutual Fund Monday again, and I thought that I’d do something a little different this week. Rather than focus on a single fund or concept about funds, I’m focusing on a topic and sharing some of the interesting posts I’ve found on other blogs recently about that topic. The topic: ETFs.

ETFs, or exchange traded funds, first became available to investors in 1993 and have since evolved from being simple index trackers to being full blown portfolios or hedge funds of their own. There’s much mistaken knowledge about ETFs and much confusion. Hopefully these posts will help set you straight on ETFs. Even if you think you know all about them, there is probably a thing or two you didn’t know.

How to Choose ETFs for Your Portfolio from Oblivious Investor is a great place to start when beginning to add ETFs to your portfolio. He examines the usual suspects in regards to the important factors of an ETF, like expense ratio and which index it tracks; but he also covers some lesser known or often overlooked factors like the Bid/Ask Spread of the fund.

Not sure about ETFs, or too sure about them? Be sure to check out Ten Myths About ETF Investing from ETFdb before you make another decision about ETFs

Do you think Charles Schwab Might be the Best Choice for Passive Investors? Steadfast Finances does, and he explains why as well as why you should care. Very interesting post..

Lastly in our ETF posts this week is a post by Dividend Tree in which he reminds us of one of the single most important details about Investing in ETFs – Know What You are Investing In. Some of this is related I think to the 10 myths of ETFs from ETFdb above. Many investors think all ETFs are created the same and they invest in what the name suggests, but Dividend Tree shows that this is not always true.

• Mutual Fund Share Class Comparison Gets Easier. Investors who own shares of mutual funds are probably familiar with the 3 most common classes of shares: A, B, and C. But recent market conditions have led over 400 mutual funds to eliminate class B shares form their offerings. The reason for the elimination is cost. It simply costs......
• A Sample ETF Portfolio for Vanguard Fans. The Vanguard family of funds has many fans in the individual investor community. With their dedication to low expense fees, it's no surprise. Much has been made of the drag on performance of high fees, and there is a growing investment community that not only shuns investments with high fees,......
• Mutual Fund Monday - 5 Things To Watch When Choosing A Fund. Picking a mutual fund can be a daunting task, but here are 5 things to look for that I hope will help make the process a little easier. This is part of my weekly Mutual Fund Monday post feature. If you find this interesting or helpful, please read more. 1.......
• Mutual Fund Monday - What 2009 Trends Mean for 2010. Many investors take the change in calendar year as an opportunity to assess their portfolios and the future, and hopefully get their portfolios aligned with the future direction of the stock market. One way in which to do this is to look back on the year that's passed and see......
• 4 Reasons Cash Is King For The Individual Investor. We've all heard that Cash is King when analyzing company balance sheets. This is especially true in times of recession, since companies without a cash cushion are less likely to be able to survive trying times. But cash is king for the individual investor as well. Here's why. 1. Lower......

• Municipal Bond Funds: The Easiest Way to Find Tax Free Investments. Nothing like a terrible year in the stock market to bring back the most boring investment choice out there... bonds! As an active investor, the very thought of bonds makes me drowsy.  All they do, is sit idle in your brokerage account and collect interest at a slightly higher interest......
• Investing 101: Value Investing (As always, when it's Tuesday, that means it's time for another thrilling edition of Investing 101.  This week, we're going to look at something a little bit different, in this case, value investing.  Rather than a single investment or set of investments, as with most of our Investing 101 columns,......
• Best Canadian Stocks and ETFs From the Past Decade 1999-2009 The last day of the decade.  Markets have just closed.  We've got the top stocks from the past decade in now, as well as the ETF winners from 2009.  Here they are. These stocks remind one that buy and hold didn't die in 2009. Top Performing Canadian Stocks . These......
• Why Index Funds are Bad Investments The entire personal finance blogosphere is in love with index funds, and I'm here to tell you why they're bad for your investment portfolio. This should go over well.  Black sheep anyone? I realize this thesis will not be a popular one, but from my perspective as an active investor......
• Successful Investing Tips and Techniques The true, most basic motivation behind investing is to grow our investment. People who have invested before will take their time, looking at the differing companies and the market, trying to predict how a stock will do in a year or two. Those investors whom are without the experience to......

Would you sell your life insurance to a stranger? Millions would, and Wall Street wants a piece of the action.

A life settlement is the process by which an individual, usually of senior status or declining health, sells his life insurance policy to a settlement company in exchange for a lump sum. The settlement company then sells the policy or shares of the policy to investors, who then become the beneficiary when the insured senior passes away.

It’s marketed as a win-win because the senior receives an immediate settlement for a life insurance policy he would otherwise never benefit from, and the investor receives the potential for very high returns on his money.

Regardless of what your moral view may be on such a transaction, it is big money and that means Wall Street wants a piece of the action.

Investment banks plan to purchase these life insurance policies, and package them up for resale as bonds to institutional investors – pension plans, hedge funds, etc..

This is very similar to the securitization of sub-prime mortgages in the last decade. The thinking is that the risk of loss (i.e. the original elderly policy holder outlives his policy, and the investors lose money) is spread out among many investors.

As I said, the potential market for this is apparently pretty big. Industry predictions are that the market for these bonds could be a large as $500 billion, and firms like Credit Suisse Group (CS) have been entering the life settlement arena.

Also, Goldman Sachs Group Inc. (GS) has been developing an index of life settlements for trade, effectively allowing investors to bet on whether the insured senior will out live his policy or die sooner than expected.

While the potential for systemic collapse, like that caused by defaults in the sub-prime mortgage business, seems limited there are risks and repercussions involved with life settlement bonds.

For example, the trend of average life span is moving upward suggesting that the odds of the insured outliving the policy rises year after year. Additionally, the fact that the policies are now held by institutions and trusts that have no limit of mortality means that insurance companies will likely being paying out more claims than they would if the policy holder remained the insured. This will likely cause a rise in life insurance rates.

source

• Reliability of Income, the New ROI. The 2008-2009 market crash and resulting bear market have been absolutely brutal to new retirees and soon to be retirees alike. For those in my age set (about 30 years out from retirement) it serves as a poignant lesson of what can go wrong. To Mary Beth Franklin, editor of......
• How to buy low and sell high - for real! The number one reason people don't buy low and sell high is emotion. Emotions cloud our thinking, and make us do things we wouldn't think of doing otherwise. Think of the fall of 2008 into spring 2009 when the market was shedding hundred of points on a daily basis. I......
• Best Funds To Invest In Now. These are peculiar times we find ourselves in. Here's a list of funds from Kiplinger that not only cover just about every bogeyman bandied about in the financial press these days, but hit upon some classic needs in a mutual fund as well. Inflation protection Sooner or later, the reckless......
• A Sample ETF Portfolio for 100% Foreign Exposure. Exchange Traded Funds (ETFs) offer broad diversity in a single package, and if the ETF is an index fund then they carry added tax benefits when compared to actively manage mutual funds. When ETFs first hit the investment scene, they were simple index tracking funds. They mainly targeted passive investors.......
• Diversification Is A Scam, Really? I came across a quote by Jim Rogers in SmartMoney magazine yesterday that almost made me blow my chocolate milk out my nose when I read it. In this interview, Mr Rogers says: "Diversification is something that stock brokers came up with to protect themselves, so they wouldn't get sued.......

• On Being Your Own Financial Planner I have decided to put my limited skills as a fantasy interviewer into hibernation which will no doubt please many readers.  So I will move on to another subject that interests me and perhaps you:  Being Your Own Financial Planner My Own Financial Planner - In the Beginning With the......
• linklings, the snow has got to stop edition photo credit: Hamed Saber It's snowing. Again. I'm cold. Again. I really wonder on days like today why I don't move to Florida. Must be because I'd have a tough time being a Marlins fan. Does anyone really enjoy cold weather? Not just in a "oh looky at the......
• Successful Investing-Not Magic This is a guest article by Ray, the owner and primary author of Financial Highway, where he discusses investing, saving and practical money management concepts. You can check subscribe to his RSS feed or follow him on Twitter. The past year and a half has been rough for investors, although......
• Comparing Life Insurance Policies pt 3 Speaking of Universal Life Insurance… What are the disadvantages of this type of insurance? Universal life insurance is generally much more expensive in comparison to term life insurance options. While some of these added costs are going to be going into your account in the form of a cash value......
• Life Insurance Basics from ezinsurance.com.au: Although you purchase life insurance for yourself, your dependents are the ones who typically benefit from it. The primary purpose of life insurance is to enable your dependents to protect the family home should you die. The proceeds from life insurance policies, referred to as the death benefit,......

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Those unfamiliar with TD AMERITRADE can take comfort in the fact that they are a member of FINRA/SIPC, so deposits and equities are as safe as they can be (meaning that value/return on investments is NOT guaranteed, but you would not lose those investments in the event that the broker went out of business.)

Accounts must be opened either online using this link, or by phone at (866)834-2539 using offer code 154.

Thanks for stopping by, and happy investing!

• The 6 Biggest Investing Mistakes Warren Buffett Avoids - and You Should Too! According to Burton G. Malkiel, a Princeton economics professor, and Charles D. Ellis, author of 'Winning the Loser's Game,' the only difference between them and Warren Buffet is that Warren Buffet hasn't made these mistakes. Of course, it's more than that but since you and I (or Malkiel and Ellis......
• Investing Term Tuesday: Gold Fix. The Gold Fix is the act whereby the price of gold is set, twice daily, by the 5 members of the London gold pool. This price is used as a benchmark for most of the global gold products and derivatives pricing. This "fixing" of the gold price by the......
• 5 Things to Do When You Have a Bad 401(k) Plan. 401(k) plans can be a great way to save for retirement and let your savings grow tax-free. But the plans are chosen by employers and managed by 3rd parties and don't always have the best options. IRAs give you the entire universe of investments to choose from, but most employers......
• Investing Term Tuesday - Tax Selling. This week's investing term is all about investment decisions motivated by tax implications. It's called tax selling and as the name suggests, it's when an investor sells an asset at a loss, in order to pay less taxes when he sells an asset at a profit. The way this works......
• ShareBuilder: 20% OFF Real-time Trades - Today Only! Here's a Cyber Monday shopping deal for all you customers of ING ShareBuilder - 20% commission rebate on all Real-time Trades that execute on Monday, November 30. You can make as many real-time trades as you want and get 20% off on each $9.95 commission. Just add the promotion code......

• Automated Forex Transactions – The Profitable Investment Choice Automated currency trading is emerging as a viable investment tool for a great number dealers who are intently seeking to expand their investment diversificaton away from the traditional fields of investment ,such as the stock market, bonds & mutual funds. Conducting the trading manually comes with many limitations and as......
• Where to Begin with Investing If you are just starting out on your own as an adult, or if you are approaching the age of retirement, you are probably thinking about where you stand financially and what your financial future will be like. It is time to stop thinking and start actually planning and taking......
• 20 Questions to Ask Yourself Before Choosing an Online Discount Broker This weekend, I had a long conversation with someone who had -- like many -- never opened a brokerage account with an online discount broker. Her trading needs were quite simple, and in the end, we decided the best thing for her to do is open an account with......
• Investment Strategies With $10,000 or less #2: Index Mutual Funds Last Tuesday, we looked at how to create a bond ladder with less than $10,000. While certificates of deposit are good to balance out your portfolio and provide peace of mind with security like a comfy blanket while sitting in front of a warm glowing fireplace, they will definitely......
• Zecco for My Retirement Funds? Often times, I'm Lazy, but never so much with 401k plans from past jobs I have held. I know I should transfer the money to a Rollover IRA. This would save me money in administrative fees. It would also give me more choice in investments. If I wanted to buy......

In honor of just closing the books on January, I thought it might be nice to examine the January Effect.

The January Effect is an investing term that refers to a general increase in the stock market during the month of January. This effect is typically attributed to an increase in buying caused by the addition of employees yearly bonuses being contributed to their 401(k) plans, and also due to investors getting back into the market after having sold in the previous December for tax purposes.

It is said that the January Effect affects small caps more than mid or large cap stocks, though this has been less pronounced in recent years as investors learn about and anticipate the January Effect.

It is also considered less important as there is less cause to sell laggard stocks for tax purposes, but that may change as taxes increase on investments and investment income.

Let’s hope it’s not a hard fast rule when we look at the S&P’s performance for this past January:

… and there IS hope: Check out this MarketWatch article on why January’s loss doesn’t automatically doom the rest of the year.

• SELL ALERT: 3 Stocks to Ditch While You Can? Here's a head's up for anyone holding these stocks - Fair Isaac, Boyd Gaming and Great Atlantic & Pacific Tea Company (A&P). A recent SmartMoney article has hilighted these 3 stocks as having garnered more "sell" recommendations than "buys" in recent weeks. Fair Isaac (FICO) Fair Isaac’s performance is dependent......
• NLY, a Dividend Paying Trust Worth A Look. With chatter about a bubble in bonds building, it may be a good time to look for alternative sources of investment income. One such source has long been dividend paying stocks, trusts and partnerships. Here are two such dividend plays - one is a Real Estate Investment Trust, and the......
• Are Target Date Funds good, bad or just plain ugly? Target date funds have been in the news quite a lot over the past few years, though the nature of the news seems to have gone from great to bad over that time. Consider that when target date funds were first introduced they were heralded as the pinnacle in the......
• Mutual Fund Monday - 5 Things To Watch When Choosing A Fund. Picking a mutual fund can be a daunting task, but here are 5 things to look for that I hope will help make the process a little easier. This is part of my weekly Mutual Fund Monday post feature. If you find this interesting or helpful, please read more. 1.......
• Investing Term Tuesday: Riskless Society. A riskless society is a fictional society where the markets of the world are sophisticated enough to anticipate and mitigate any and all risks. While the idea is credited to Dr. Kenneth Arrow and Gerard Debreu, it is similar to one of Einstein's famous thought experiments, where the thinker hypothesizes......

• Email Marketing Strategies And Spam Words Today I am going to share with you one of my email marketing strategies. In just about every circle online you will hear people talk about how important building your list is, however just building a list isn't enough to make money online.  Most people join something and are given......
• Picked Up Harvest Energy Trust I bought some Harvest Energy Trust (HTE) today. Not a lot only 50 shares worth. The market is pretty volatile and historically the month of August is bearish for stocks 72% of the time (or something like that), but the recent 226 point drop in the market created a really......
• Want to Be an Active Investor? Try a Fantasy Stock Market Game First! So you want to be an active investor? Maybe you think you have what it takes to cash in like the daytraders from the late 1990s trading those high flying tech stocks.  Or perhaps you think you can ride the coattails of those evil oil speculators that pushed light sweet......
• Are ETFs a Good Way to Create Secondary Streams of Income? ETFs, or Exchange Traded Funds, are all the rage in the investment world, but so far, they really don’t have much of a track record. This is a fairly new method for investing and the long term data just isn’t there to determine how effective these investments can be over......
• Rational Investing In Irrational Markets You can’t beat the market. You’ve heard that one, right? Why do they say that? What is the reason why you can’t beat the market? The market is rational. That’s the idea. To beat something, you must find a weakness in it. If the market sets prices rationally, there’s......