Q. How much does it cost to own a mutual fund?

A. More than you think.

Most investors know about a fund’s expense ratio, and use that attribute for comparing various funds before buying. But there are a host of hidden costs that are much more difficult to uncover for many mutual funds.

That’s what this article from the Wall Street Journal is about.

These hidden costs are related to the buying and selling of the individual securities held by the mutual fund, and they can make a fund 2-3 times more costly than the expense ratio alone would imply. That can be a pretty significant amount on a fund with an expense ration in the 1-2%.

While the expense ratio is an important consideration when pricing a fund, it simple doesn’t capture all the costs. The reason is that every mutual fund and its associated expenses is different. Then there’s the complex nature of the costs not covered by the expense ratio, specifically: brokerage commissions, bid-ask spreads, opportunity costs and market-impact costs.

And since the SEC has yet to mandate any unified form of measurement, the individual is left to try and scrutinize the often inscrutable. Even most experts arrive at drastically different estimates of the true cost of mutual funds.

So how do you find the true cost of mutual funds?

While it is difficult to get at the information required to determine the exact cost of a mutual fund, it turns out that the fund’s Annual Holdings Turnover ratio is a pretty good clue. While it is an imperfect measure, it is a standard measure. So, every fund must report this data the same way.

A fund’s annual turnover ratio is the percentage of assets that were replaced over the past year. So if the fund’s manager sold half its stocks and replaced them with an equal value in new stocks would have turnover of 50%. This is an imperfect measure though because in some cases, a fund can take in a lot of new money and not have to sell any assets to buy new ones. In such a case, the fund would incur additional buying costs that would not be accounted for in the expense

• 3 Recommended Pimco Bond Funds. Bonds are an important part of any good asset allocation, and here are 3 bond funds from the Pimco firm as recommended in a recent Kiplinger magazine article. PIMCO bond total return (PTTAX). Manager Bill Gross sticks to investment grade, intermediate-term U.S. bonds for this fund. The expense ratio for......
• Mutual Fund Monday - Tips For Mutual Fund Investment. With thousands of mutual funds to choose from, picking the "right one" can be a daunting task. Most investors know not to fall for a short term hot streak - one or two years isn't a long enough track record to show superior skill of the management team over sheer......
• 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: PIMCO Launching New Global Fund. According to a recent Edgar filing , PIMCO will soon be launching a new fund: PIMCO Global Opportunities Fund . It's going to be a global value fund of common and preferred stock. The fund will target equities in one of 3 countries, one of which may be the U.S........
• Bears Make Money, Bulls Make Money, Pigs Get Slaughtered. I don't mean to get all Animal Farm on you, but have you ever noticed there are a lot of animal metaphors in investing? Most people have heard about bear markets and bull markets, but did you know there are also pigs in the market? Well, yeah, I suppose you......

• What's an Expense Ratio? After reviewing which posts were popular on my site last week, I noticed that starting an IRA was number one. I think one deterrent for people investing is the terminology associated with that. I decided to help out by putting out some quick posts demystifying financial lingo. Today's term......
• Use A Stock Screener To Find Stocks To Buy (Morningstar Demo) I still remember those times during the roaring bull market when I would trade stock picks with friends and colleagues. We’d then buy stocks after a pitch and compare notes as we watched ourselves mint money. Those were the days when even a dart-throwing monkey could make you money. These......
• The Pros and Cons of Investing in ETFs In last decade, specialty ETFs (Exchange Traded Funds) are probably the hottest thing to hit Wall Street since the rise of the discount brokers in the mid 1990s. Initially, ETFs were not very popular because they only tracked the performance of a few stock market indices. However, in today's investing......
• Top Investment Brokers For Mutual Fund Investing If you own mutual funds, it’s quite possible that you are paying more than you need to in mutual fund fees. This is according to Lipper, Inc. a large mutual fund research company. But by understanding what the various fees are that are associated with mutual fund investing, you’ll be......
• What is a Mutual Fund? Mutual fund is a corporate body, which works as an intermediary and invests in financial markets. Mutual funds collect money from the public and invest in financial instruments like equity, government securities, bonds, debentures etc.Investing through mutual funds is good for people who do not have much knowledge about......

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.

• 3 Options for College Saving Accounts. It seems counter intuitive, that choosing the wrong kind of savings account for your child's college fund could actually cost your child more, but that's the world we live in - make the wrong choice, and your child may lose thousands of dollars in financial aid come enrollment time. According......
• Dow Down as 10,000 Makes for Difficult Psychological Barrier. The recent market rally seems to have stalled. Is it because the Institute for Supply Management's index of national factory activity declined in September? Is it because U.S. Auto sales dropped again, once the artificial stimulus ended? Is it because the unemployment claims rose unexpectedly again? Is it because the......
• A Possible Change to Mutual Fund Tax Implications on Capital Gains. Investors in U.S. mutual funds might want to keep an eye on this. The Committee on Capital Market Regulation (CCMR) has recently issued a report by Harvard professor John C. Coates which recommends that mutual fund regulators eliminate the requirement for yearly capital gains distributions. The change would only affect......
• Investing for free in 2010 with ING Direct! Here's a freebie for your Friday... Open an IRA & invest for FREE in 2010! ING Direct is offering a year's worth of investing credits if you open an IRA with them before April 15, 2010. Here are the details: no-fee IRA free Automatic Investment Plan (AIP) credits to use......
• A Tale of 4 High Income Bond Funds. Bonds have gotten a lot of attention over the past year and it's easy to see why when you look at this chart. What you're looking at is a relatively smooth ride up until the world collapsed in October of 2008. The investorspeak for that smooth ride is "low volatility",......

• Roth 401K, Roth IRA, 401K Retirement Plans: Which is Best? The Roth 401 (k) plan is a new form of retirement account combining the Roth IRA (k) plan and the regular 401 (k) plan. It has bits of both plans which allows the employee to have more flexibility when planning out his retirement as long as his employer agrees......
• Introduction to the IRA The IRA is an Individual Retirement Account that was originally created by the United States Congress as a means of providing retirement savings with tax advantages to workers that were not already being covered under an employer-sponsored retirement plan. Unlike the standard 401(k) plan, the purpose of an IRA is......
• Roth IRA Withdrawal Rules Did you know contributions to a Roth IRA may be withdrawn at any time, without penalty? It's one of the lesser-known Roth IRA withdrawal rules. It is also one that I do not plan to take advantage of, but knowing it is there makes maxing out Roth IRA contributions a little......
• What is Debt Leverage? Leverage is a term that is often used synonymously with debt, and for this reason, it is important that people come to understand what debt leveraging actually means, and how it works in an ordinary financial transaction, such as buying a home for example. Let us suppose that you are......
• 2010 Roth IRA Conversion Loophole Current Roth IRA rules restrict high-income savers from participating, phasing out eligibility from $105,000 to $120,000 for single filers and $166,000 to $176,000 for married couples filing jointly.  Currently, Roth IRA conversion rules follow similar guidelines.  Only taxpayers earning less than $100,000 annually (and not married filing separately) are eligible......

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.

• A Sample ETF Portfolio for Alternative Investments. If you're looking for an ETF portfolio that provides exposure to assets other than stocks and bonds, you may want to check this out. The ETFs in this portfolio (from Kiplinger's magazine) are anything but the boring, old index funds that got the ETF started. The funds cover commodities like......
• 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,......
• Beware the Ides of March? Technically speaking, the Ides of March is nothing more than a date on the Roman calendar. March 15th, to be exact. But it has sinister implications because it just so happens that the Roman emperor, Julius Caesar, was stabbed to death on March 15th 44 BC by the very senators......
• 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......
• Mutual Fund Monday: The Biggest Lies Mutual Fund Companies Tell. Chuck Jaffe at MarketWatch has a great piece that I thought I'd share for my (semi) weekly Mutual Fund Monday post this week. His article lists 7 ways that fund companies manipulate their stats to trick investors. It's all quite legal, since much of it depends on your the viewpoint......

• 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,......
• Index Funds 101 The most significant invention in the 20th century as far as investing goes is mutual funds, at least if you are a small individual investor with modest means. Thanks to mutual funds, the benefits associated with large scale international capital markets are now capable of being taken advantage by more......
• Review of Bill Schultheis' The New Coffeehouse Investor The author's marketing company kindly sent me a complimentary company of Bill Schultheis' latest reworking of his book: The New Coffeehouse Investor.  According to the "about the author" section in the book, Mr. Schultheis is an investment adviser with Soundmark Wealth Management, LLC, a fee-only registered investment adviser located in......
• Start A Roth IRA With $50 At T Rowe Price One of the most common reasons people cite for why they've yet to start a Roth IRA is high initial mutual fund minimums.  Vanguard is a great mutual fund company, but most Vanguard funds require an initial investment of at least $3,000 (except the STAR fund, of course), which is......

With thousands of mutual funds to choose from, picking the “right one” can be a daunting task. Most investors know not to fall for a short term hot streak – one or two years isn’t a long enough track record to show superior skill of the management team over sheer luck – but where should you start?

Step 1.  Figure out what you really need.

To be a successful investor, be it in mutual funds, hedge funds or whatever, you need to determine what your objectives really are and what asset allocation you’ll need to meet those objectives. And sorry to tell you this, but “to get rich” is not an objective.

Objective.

For your objective to be meaningful and achievable, it needs to be specific. If you can determine exact numbers, then you’re off to a great start. But even if the numbers are not exact or may even be unknowable, you can still use that as an objective.

For example, if your objective is to have $25,000 in 5 – 7 years for a new car, then you have a defined timeframe, and target amount. From that you can then figure out how much you can invest over that time  frame and see how much return on your money you’ll need to get there. (There are calculators for this kind of thing).

Even if your objective is a bit less knowable, say saving for retirement, you can use ballpark figures for determine the “best guess” for what you’ll need 15, 20, even 30 years out from today. The key is knowing that this is just a guess, based on current trends. In the case of retirement planning you reevaluate your goals and assumptions on a regular basis, every 5 -10 years for example.

The Takeaway. The point to take away from all of this is that your objective (amount and time frame) will be a key component in determining your risk level and asset allocation. You can (and should) invest more heavily in stocks for retirement which is decades away than for the objective that’s 5-7 years away.

Asset Allocation.

Put simply, an asset allocation is which types of investments you choose to put your money in, and in what proportions.

Different types, or classes of investments carry with them different levels of risk and average return. Bonds, for instance, are typically less risky than stocks, though that is a generalization since there are subclasses of stocks and bonds that can be very similar in terms of risk and reward.

Key points of concern are correlation (how much one investment be behaves like another), volatility, and risk.

The Takeaway. Some studies have shown that asset allocation alone is responsible for up to 90% of your total return, so be sure to study up on this stage and know what you’re doing.

Step 2. Picking mutual funds.

Since this article is about mutual funds, I will focus on that aspect of an asset allocation. But remember – if your investment goals are short term, then mutual funds may not be right for you.

Searching for a mutual fund.

If you have an idea of what type of fund you’re looking for, say a small cap stock fund, and you’d like to see what mutual funds fit that category, you can use Kiplinger’s Fund Finder. This tool allows you to select broad categories (like small cap stock funds) and narrow the results by a host of criteria, including:

• 1,3 or 5 year return.
• Morningstar rating.
• Return in a down market (i.e. worst loss).
• Expense ratio.
• Turnover ratio.
• Length of time the current management team has been in place.

And much more. It’s very handy for gathering a list of mutual funds to choose from, but you still need to do some comparison work, but more on that in a minute.

Gathering information on a specific fund.

Once you have a list of funds, or maybe you’re looking for details about a specific fund in your 401(k), you can use FINRA’s Fund Analyzer to get the specifics about a fund.

These results include average return of a given investment amount over a specified period of time, and the total expenses. It also provides a breakdown of the allocation within the fund, investment style of the fund (i.e. growth, vs value, etc..) the Morningstar rating and much more.

Some thoughts on past performance not guaranteeing future results…

By now I’m sure you’ve heard that familiar phrase of investment marketing: “Past performance is not a guarantee of future return”, or something similar. It’s usually uttered as a means of protecting themselves from costly liability in court situations, but it is also a significant thing to bear in mind when picking a fund.

The thing to remember is that just because a fund had a rip-roaring 3 years does not mean it’s going to continue to rip and roar its way up the charts for the next 3 years. Maybe it was a small cap stock fund and the economy has just come out of a recession. If that’s the case, then you can expect those returns to level off a bit as the economic cycle matures and investors seek blue chip companies over small cap.

But long term performance can be a good indicator of a fund’s quality. Look for good for funds with good performance over a 5-10 year period.

Some thoughts on volatility…

Volatility is simple a measure of how much the fund’s price jumps around; it’s a measure of how much of a roller coaster ride the fund is. The lower the volatility, the smoother the ride, but not necessarily the higher return. The thing to keep in mind with volatility is that it doesn’t matter how bumpy the ride is if you don’t need the money for another 20 years. In other words, volatility is less important for long term investments.

Some thoughts on Managers…

Things you’ll want to know about the fund’s manager include:

• Does the manager admit mistakes?
• Does the manager respect the investors?
• Does the manager sound too greedy?
• Does the manager know what he’s talking about?
• Is the manager personally invested in the fund? (that’s a good thing)
• Does the manager stick to his stated strategy?

One last thought about fees…

Not all funds are created equal, and one of the biggest defining characteristics of a fund may be its fees. All other things being equally, higher fee funds will perform worse than lower fee funds. But things are rarely equally and the thing you need to find out is whether the higher fee fund significantly outperforms its peers over an extended period. In other words, is it worth the extra money? If it’s just doing the same as an index fund, it’s not worth the money.

source

• 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......
• 3 Recommended Pimco Bond Funds. Bonds are an important part of any good asset allocation, and here are 3 bond funds from the Pimco firm as recommended in a recent Kiplinger magazine article. PIMCO bond total return (PTTAX). Manager Bill Gross sticks to investment grade, intermediate-term U.S. bonds for this fund. The expense ratio for......
• 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......
• 3 Options for College Saving Accounts. It seems counter intuitive, that choosing the wrong kind of savings account for your child's college fund could actually cost your child more, but that's the world we live in - make the wrong choice, and your child may lose thousands of dollars in financial aid come enrollment time. According......
• 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.......

• Index Funds 101 The most significant invention in the 20th century as far as investing goes is mutual funds, at least if you are a small individual investor with modest means. Thanks to mutual funds, the benefits associated with large scale international capital markets are now capable of being taken advantage by more......
• The Power of Systematic Investment Plan (SIP) As explained in my article 'Planning financial goals', a goal can be any target that needs to be achieved in a stipulated period. I have also explained different types of financial goals like, buying a flat, children's education, marriage or retirement living expenses. All of these are critical long......
• 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......
• Mutual Funds With Money-Back Guarantees: Wave Of The Future? Mutual funds that offer money-back guarantees for poor performance may gain traction as more and more investors become educated about the benefits of index funds and difficulties of identifying superior active management. Since typically fewer than 30% of mutual funds manage to be the S&P 500 over any extended period......
• How Do Bond Mutual Funds Work? For the most part, you should probably understand how a stock mutual fund works by now.  The manager of the fund is in charge of making the buying and selling decisions.  Depending on the investment philosophy, this could mean buying new stocks in the fund, or selling to reduce one’s......

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 for that matter) don’t have any chance of acquiring Buffet’s DNA, we’ll focus on this list – in the spirit of accepting what cannot be change, and having the courage to change the things that can be changed.

6 investing mistakes to avoid:

• Overconfidence
• Following the Herd
• Timing the Market
• Assuming More Control Than You Have
• Paying Too Much in Fees
• Trusting Stockbrokers

By way of proof of Buffet’s unique investment acumen and, more importantly, his ability to focus and remain true to his core investment philosophy, Malkiel and Ellis cite two prime cases when Buffet was tested by the markets and prevailing “common knowledge”.

Case number One was when Buffett avoided the dot com bust of 2000, simply because tech stocks fit neither his investment style, or his philosophy. But he held firm to his approach, even when it was called outdated by the rest of the investment world. As a result, his portfolio avoided much of the carnage that befell those more “enlightened” investors.

Case number two was when Buffett avoided mortgage-backed securities and derivatives in 2005-2006, because he found them too complex and “opaque”. As a result, he avoided the worst of the damage caused by the economic collapse that ensued.

In regards to the list above, you can see how Buffett’s sense of humility, and discipline have kept him from making many of the mistakes out lined in more detail in Malkiel and Ellis’ original article.

Burton G. Malkiel, Princeton economics professor and author of ‘A Random Walk Down Wall Street,’ and Charles D. Ellis, author of ‘Winning the Loser’s Game,’ have teamed up to write ‘The Elements of Investing.’

• 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......
• A Sample ETF Portfolio for Alternative Investments. If you're looking for an ETF portfolio that provides exposure to assets other than stocks and bonds, you may want to check this out. The ETFs in this portfolio (from Kiplinger's magazine) are anything but the boring, old index funds that got the ETF started. The funds cover commodities like......
• Top 5 Best Investors. Here are the top 5 Investors of all time, as picked by  Investopedia. But first, the criteria... The list is based on 4 factors: The investor is a long term performer - that is one with a long history of beating their bench mark index(es). The investor or manager must......
• Top Morningstar Bond Funds for July 2009. Morningstar has released their top 3 Bond Funds for June-July. Here's the list: High-yield bonds. T. Rowe Price Spectrum Income (RPSIX) This is a fund of funds. The management team invests in up to 9 T. Rowe Price funds in order to get exposure to all of the sectors of......
• How to spot an investment scam. In a single day, investment fraud can take away everything you've spent your life building. Couple that with the knowledge that scam artists are most active when times are very good, and when times a tough. You don't need me to tell you that times are tough these days, and......

• Silver Bullion Coins Coins & Paper Money -> Bullion -> Silver People buy silver bullion coins for a few different reasons. Some buy them because of the precious metal content as an investment and buffer against inflation. Some people buy them because they fear that one day our popular currency will become worthless,......
• How to Avoid Hiring Mistakes in Your Restaurant FOREVER! Jonathan Munsell Interviews Hiring and Performance Expert Jay Henderson In our conversation Jay reveals the 7 biggest hiring mistakes restaurant make and how to avoid them.  Plus Jay and Jonathan dive into the 9 Secrets to Great Hiring for Your Restaurant .  This is a don't miss audio.  Have a......
• How to Spot an Investment Bubble Did your investments get slammed because you bought at the top of the market only to curse them all the way down? Were you feeling anxiety because you listened to friends talk about flipping condos for a quick profit and felt like you were going to be left out?  Did......
• linklings, an end to freedom on the horizon edition "Freedom is something that dies unless it's used” -Hunter S. Thompson You always have to wonder about the way the world works when it has one of those random burps of synchronicity. My problogging days are numbered now. A Fortune-single-digits company hurled out a six month consulting contract; a......
• Investment Tips For 2009 : Determining Your Risk Tolerance Investment: Risk Tolerance I have a financial planner who, amongst other strange attributes, has a perky sense of humor. This may of course get him firmly slapped across the head if he continues to practice his comedic aspirations on me. At our last meeting, greeting me with a chuckle, he......

The Mutual Fund Monday post this week is a highlight of a recent post from Kyle over at Amateur Asset Allocator .

Millions of Americans own mutual funds in their 401(k) plans, and many others own them in their IRA’s or even in a taxable, non-retirement account. But many people don’t have any idea of how to really compare the funds that are available to them. Here’s a hint – it goes beyond simply finding the highest return for a given time period (Ex: 1, 3,5 or ten years).

Kyle’s post is a great explanation of how to compare mutual funds, and their associated indexes. He explains how to compare apples to apples, and not apple to oranges (all mutual funds are not created equal!). He also explains the basics of knowing which index to compare a fund’s performance to, and why. And lastly, he explains how to compare two mutual funds – and more important, how not to.

So what are you waiting for? Head on over and give him a read.

• The One-Minute Portfolio. Here's the ultimate in super-simple investment portfolios, for those who don't have the time or inclination to pick and monitor individual stocks. The One-Minute Portfolio. The One-Minute Portfolio is comprised of just 3 asset allocations: Domestic Stocks, Foreign Stocks and Bonds. Here's a recommendation for each category: 1. Buy America......
• Mutual Fund Monday - Blogosphere Feb 2010 Edition. 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......
• 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......
• 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......
• 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 Funds 101 One way that investors can pool their money is mutual funds, which allows them to invest together in a variety of different stocks. Each of the participating investors is charged a percentage fee based on what they invest so that the professional fund manager can receive payment for his work......
• Mutual Funds Introduction It is really not much of an exaggeration for you to say that mutual funds are one of the best things that the middle class can take advantage of financially since the invention of sliced bread. What mutual funds do, is they allow for investors that have small amounts of......
• Vanguard Has 20 Actively Managed Mutual Funds that Beat S&P 500 Index Fund Vanguard, for those who did not know, has a few actively managed mutual funds, tax advantaged funds, and even a few sector specific funds.  All have varying fees/expense ratios, a few of them have very high investment minimums ($250,000 plus), and yes, even a few are closed off to new......
• 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......
• Pros And Cons Of Investing In Target-Date Retirement Funds. Photo by Mike LichtI'm sure that if you do any kind of investing at all you have heard about target-date retirement funds, where the stock and bond allocation inside the fund changes as you near your retirement date. All you have to do is pick a year (for me, it......

Morningstar has a terrific article (available to free members) titled Three Tips to Make Your 401(k) Work for You and I love it! Here’s a brief sample of why:

It’s surprising there aren’t many calls in the press to ditch the automobile. After all, think of all the dumb things people do with them. They drive much too quickly and sometimes after drinking lots of alcohol. They even drive while sending text messages, putting on makeup, and reading the newspaper. The consequences can be dire: More than 40,000 Americans die in auto-related deaths each year, with nearly 3 million suffering injuries of some kind.

Few things in the financial media annoy me more than the recent calls to 86 the 401(k) plan. And the above paragraph illustrates the absurdity of the move to end 401(k) plans quite nicely.

The article goes into greater detail about the push to eliminate the plan, but it also offers some real actions that investors can take to help get their 401(k) balances back on track, or to keep them on track so that they will function as intended – as a means to save for retirement, not get rich in the stock market (as too many seem to think).

Tip #1. Save More.

Yeah, I know, this sounds trite but it’s important not to simply gloss over it. My 401(k) balance dropped by about 30-35% from its 2008 high by the time the market bottomed in March of 2009 – and this was also at a time when my company canceled 401(k) matches! Things looked not so good, to say the least. But I didn’t get discouraged and start blaming the system. Partly because I have over 20 years left until I need that money, and partly because I know the stock market ebbs and flows. True, the market doesn’t usually drop by as much as it did by early 2009, but that also meant that there was near unprecedented opportunity for big returns in the coming months.

So, I looked at what I could do to change my situation and decided to increase my contributions. I knew that this would maximize my ability to buy more stock at those low levels, and also help offset my employers decision to break their promised benefit to me (i.e. contribution match).

I saved more. And the result was that my balance was over its pre-crash value in September, 2009.

Tip #2. Invest Wisely.

Most 401(k) plans are quite limited in the options open to investors, but that doesn’t keep them from screwing it up! For example, some employees “play it safe” and put all of their money in the money market equivalent. That’s stupid, unless you’re looking at retiring in the next 2 year, but even then you shouldn’t have all of your money in cash equivalents because you’re not going to suddenly withdraw all of your saving upon retirement. You need to keep some of it in stocks for long term growth so you don’t run pout of money in retirement.

So, basically, examine the options open to you in your plan, and diversify properly according your time away from retirement and other factors such as other assets available upon retirement – ex: home equity, pension plan, etc..

Tip #3. Be Flexible.

The best laid plans can often fall short due to factors beyond your control, so while it’s important to have a plan and stick to it, it’s also important to remain flexible and be ready to adapt to new realities as the economy (both U.S. and global) enter uncharted territory. This may mean working longer than you originally thought, or working part time jobs in retirement. Regardless, don’t get caught up in the way you think things ought to be and lose sight of the way things are.

• How to spot an investment scam. In a single day, investment fraud can take away everything you've spent your life building. Couple that with the knowledge that scam artists are most active when times are very good, and when times a tough. You don't need me to tell you that times are tough these days, and......
• How Often Do You Rebalance Your Investments? I had always heard that investors should rebalance their portfolios at least once a year, maybe twice a year and at the same time every year. But I never heard that everyone should rebalance at the same time of year, yet that's exactly the basis of a recent Wall Street......
• Investing Term Tuesday - January Effect. 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......
• 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......
• Bears Make Money, Bulls Make Money, Pigs Get Slaughtered. I don't mean to get all Animal Farm on you, but have you ever noticed there are a lot of animal metaphors in investing? Most people have heard about bear markets and bull markets, but did you know there are also pigs in the market? Well, yeah, I suppose you......

• 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......
• Our Early Retirement Plan: My Personal Income (Part 2) If you are just starting this, I suggest you start at The Introduction - Part 0. Alternatively, you can jump to Our Early Retirement Plan: Where We Are Now (Part 1). My income and my wife's income are dramatically different from most people. I don't have a 9-5 job. Yesterday......
• Top Retirement Planning Blunders Planning for your retirement doesn't have to be a game of chance. There is simply no way you can predict exactly how long you will work, how much money you will be able to accumulate or what expenses you may face in retirement. One thing we can each count on......
• Personal Retirement Plan Investment Options Good financial management consists of two different distinct facets, the first of which is learning how to make the best use out of your limited earned income in order to best meet your current expenses, and the second of which has to do with learning how to implement strategies that......
• Choosing the Right Types of Investments pt 2 If company stock is the only option that is available to you through your company's offered 401 k savings plan, then you should be looking at other types of investment vehicles to handle some of your savings for retirement. Annuities When you decide to buy an annuity, what you have......

Here’s a freebie for your Friday…

Open an IRA & invest for FREE in 2010!

ING Direct is offering a year’s worth of investing credits if you open an IRA with them before April 15, 2010.

Here are the details:

• no-fee IRA
• free Automatic Investment Plan (AIP) credits to use all year long, if you open your account before April 15, 2010.
• ING IRA accounts offer more than 7,000 stocks and ETF’s
• Automatic investment plans can be scheduled on a weekly or monthly basis
• Online AIP investments only occur on Tuesdays
• Real-time trade fees apply to all sales. (i.e. automatic buying is free with the credit all year long, but all sales with cost you)

An IRA is a great way to grow you retirement savings tax-deferred, and this promotional mean that even more of your contribution goes toward your investment, instead fees.

To take advantage of this ING Direct IRA promo, visit: www.sharebuilder.com/2010ira

• 5 Overlooked Stocks Poised for Growth? These stocks are covered by fewer than 5 analysts, but they have increased both their earnings and sales by 10% or more over the past 12 months. Company Ticker Industry SharePrice PriceChangeYTD(%) SalesGrowthPast Year(%) ForwardP/E Citi Trends CTRN Clothing stores 60 $23.62 13 17.5 AZZ AZZ Industrial equipment 32.24 28......
• 2010: The year of the ROTH. This is a friendly reminder for anyone with retirement savings who is concerned about paying higher taxes in retirement: new tax rules remove earnings limits on Roth IRAs. Prior to the start of 2010, you could not open a Roth IRA if: Your individual adjusted gross income was $120,000 or......
• 6 Tips For the Beginning Investor. Here's a list of some investing insight I've learned over the years that I hope will help accelerate the beginning investor's road to wealth. 1. Don't go all in at once. If you have a lump sum of money to invest and you are doing so when the market is......
• Mutual Fund Monday - Tips For Mutual Fund Investment. With thousands of mutual funds to choose from, picking the "right one" can be a daunting task. Most investors know not to fall for a short term hot streak - one or two years isn't a long enough track record to show superior skill of the management team over sheer......
• Dow Down as 10,000 Makes for Difficult Psychological Barrier. The recent market rally seems to have stalled. Is it because the Institute for Supply Management's index of national factory activity declined in September? Is it because U.S. Auto sales dropped again, once the artificial stimulus ended? Is it because the unemployment claims rose unexpectedly again? Is it because the......

• Monster TurboTax Online Tax Software 2009 Review Back when I started working and had to file taxes I would go to the library to pick up the necessary forms.  I'd set aside an afternoon to go through the 1040's and see what I needed.  Then I'd spend the rest of the time getting my head around the......
• With Markets a Bottomless Pit, Concentrate on Cash Flow As I write this, the U.S. stock markets are not yet open but Asian markets are continuing their free-fall.   The European and U.S. markets are sure to follow, after the European Union announced its refusal to help either its car companies or the hapless Eastern European economies. The European......
• Money Saving Tips: 122 Ways To Trim Your Budget A while back All You Magazine offered to give away a few subscriptions to Frugal Dad readers.  The rules for entering the contest were simple--leave a money saving tip in the comments.  What happened next was one of those magical moments you can only get from blogs, and the sense......
• About Credit Where can I find out what my credit score is? Most lenders are going to get their credit information from one or several of the three major credit reporting agencies, which are Experian, Trans Union and Equifax. You can receive your information from these credit agencies by contacting each agency......
• April 2008: Progress Update Photo Credit: It’s Greg A lot has happened in March! We moved out of state last month and I started a new job. I like the new city, but I miss our friends. Since it's the beginning of a new month, I wanted to give an update of the......

Here’s a list of some investing insight I’ve learned over the years that I hope will help accelerate the beginning investor’s road to wealth.

1. Don’t go all in at once.

If you have a lump sum of money to invest and you are doing so when the market is going down, don’t just use it all at once to buy shares. Instead, split that lump sum into 3rds and buy at periodic intervals as the market goes down. The idea is that you simply cannot time the market effectively, so don’t bother.

Instead, you’re dollar cost averaging on the way down and spreading your money out like scatter shot instead of a single bullet. By doing so, you will improve the chances of hitting near the lows with at least some of your purchases.

2. Don’t be paralyzed by taxes.

Often times, individual investors hold on to a winning stock because they don’t want to pay the taxes on it, only to have waited too long and find they rode the stock back down to loser territory.

It’s an understandable course of action, after all when an activity is taxed, people do that activity less than when it is not taxed. But you have to get past that and realize that even at a 42% tax rate, you still have a 58% profit.

But let’s be clear – I’m not saying you could ignore taxes, only that you shouldn’t allow their implication to paralyze you into inaction.

Taxes should be an important part of your investment planning. For example, you want to be aware of the kinds of assets you hold so you don’t keep tax free, municipal bonds in a tax deferred account.

3. Broken stocks are OK, broken companies are not.

A stock’s price is a function of the quality and value of the underlying company, over the long term. This means that if you are looking to hold onto a stock for the long term, say 5-7 years, you should avoid stocks of broken companies and instead look for stocks of good quality companies that have suffered a temporary decline in stock price. Eventually the market will recognize the superior quality of the company and reward the stock price. Conversely, stocks of broken companies become broken stocks over time. An example of this might be Johnson & Johnson in the fall of 2008. The stock price suffered because the market as a whole crashed, not because the company was in poor shape. GM stock on the other hand suffered because the company was bankrupt and has no upside potential.

4. No one ever got rich panicking.

The key to success is simple to understand, difficult to practice – have a plan. You will never be a successful investor if you “just wing it”, “play by ear” or perform in a host of similar colloquial cliches.

Instead, you need to have a plan for when to buy and when to sell each and every stock you hold. Once you have your plan, use Stop Order and Limit Order to take the emotion out of your buying and selling.

5. Diversification is essential.

There have been a lot of pundits pointing out that diversification didn’t help in the 2008-2009 crash, but that while that is true, it’s not as important as it may at first seem .

Firstly, the 2008-2009 crash is not the norm and you’re far more likely to encounter situations where diversification would protect you than you are to experience another such crash.

Secondly, the only things safe in the 2008-2009 crash were cash and (maybe) commodities. If you want to prepare for a 2008-2009 style crash you should diversify some of your holdings into these asset types. But if you held most of your portfolio in them most of the time, you would lose in the long term.

6. Buy and hold is not “set it and forget it”.

Buy and hold investing is great for retirement savings, but even then you need to pay attention. Too many people mistake “Buy and Hold” for some similar sounding marketing gimmick from Ron Popiel.

“Set it and forget it” in the investing world is simply neglect, and it will catch up with you sooner or later.

Instead, you should periodically create a list of your holdings and rank them , that way you will have a course of action and always know where your holdings stand regarding buy, sell or hold.

• 3 Tips to Make Your 401(k) Work for You. Morningstar has a terrific article (available to free members) titled Three Tips to Make Your 401(k) Work for You and I love it! Here's a brief sample of why: It's surprising there aren't many calls in the press to ditch the automobile. After all, think of all the dumb things......
• Investing Term Tuesday: Champagne Stock. Champagne Stock is slang for a stock that has appreciated dramatically. Champagne stocks make shareholders a great deal of money, usually relatively quickly. Champagne stocks are also commonly part of an industry or sector that is experiencing a bubble. This term derives its meaning from the habit of individuals who......
• The simple 7 investment portfolio. Looking for an easy, diversified portfolio of stock funds that will grow your money over time, but won't take over your life with demands on your time? ladies, gentlemen and undeclared's, I present the simple 7 portfolio.. Each recommendation is either an ETF, or a no-load mutual fund. Some people......
• 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......
• 3 High Growth Small Caps for 2009-2010. Here are 3 small cap stocks that you probably haven't heard of, but they each have at least a 25% increase in sales over last year - a time in which most companies have seen sales take a big hit. K12. Market Cap: $548 million Estimated sales growth for current......

• The Market Falls While Congress Stalls: My Plan Revisited When the U.S and international markets experienced their first drop following the failure of U.S. investment banks, Mr. ToughMoneyLove described his tactical money moves in response.  I then described why doing nothing aboout our investment allocations was an appropriate strategy. Yesterday's market crash was yet a new event to consider because of......
• DOW JONES - Stock Market Crash 2010 The Dow Jones Stock Market Crash of 2010 looks like it's begun, with the third week of trade for 2010 showing a 5% decline from top (see Chart below). A stock market crash is defined as a sudden dramatic decline, of 10% or more, in the stock market index. So,......
• UF Home Coming against Arkansas The University of Florida Gators are set to go head to head with Arkansas, and the game is going to be aired at 3:30pm on CBS. The Gators football team is going to be going up against Arkansas on Saturday, October the 17. The game is going to be televised......
• Silver Bullion Coins Coins & Paper Money -> Bullion -> Silver People buy silver bullion coins for a few different reasons. Some buy them because of the precious metal content as an investment and buffer against inflation. Some people buy them because they fear that one day our popular currency will become worthless,......
• Weakon 207:  Diversification Yesterday we learned about asset allocation, where you decide which asset classes are right for you.  Today, I'll help you decide what investments are right for you inside a specific asset class.  Again the name of the game is managing risk, this time by diversifying within an asset class. It......

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. Fees.

Over the entire time you own a mutual fund, fees can sap returns without you even knowing it. Fees are also the single easiest thing for an investor to control. You can’t always choose the hottest performing fund, but you can choose the one with the lowest fees. Also, many fund companies don’t tie fees to performance, so your fund manager gets the same financial incentive whether he beats his benchmark or falls short.

Look for low cost index funds, or fund families like Vanguard, Dodge & Cox and American funds. Also, look for families that tie compensation to performance like Vanguard, Fidelity, Bridgeway and Janus.

2. Size.

Fees matter, and so does size when it comes to mutual funds. When a fund gets too large, the manager cannot buy and sell many assets without affecting the price of those assets by his actions. This makes it very difficult to perform well. Think of it as the difference between steering an 18-wheeler and a motorcycle. You want a fund that’s small enough to be nimble and not have to fight against its own momentum.

Look for fund families that don’t let their funds grow too big. Funds that aren’t afraid to close the doors to new investors when the fund reaches a certain asset size. Families like Dodge & Cox, Longleaf Partners fit into this category. Also watch out for funds that announce they will be closing well in advance as this often signifies that the management is looking to make a last minute asset grab, and does not have the best interest of the shareholders in mind.

3. Age.

Pay attention not only to how old the fund is, but also how old other funds form the same family are. For example, avoid companies that seem to launch funds targeting “what’s hot” at a given time – think tech stocks in 1999, or emerging markets in 2006.

Look for fund companies with a long history of concentrating on fundamentals and not simply trying to capitalize on fads. Companies like Longleaf, FPA, and Dodge & Cox fit this metric.

4. Taxes.

Some managers simply don’t care about your tax bill, and that’s fine if you hold those funds in a tax sheltered account like a 401(k) or IRA. But if it’s in a taxable account, it’s an unnecessary drag on your return.

Look for funds with low turn over rate, and a small difference between before and after tax returns.

5. Benchmark.

Lastly, you should pay attention to the benchmark of a fund. You’ll want to know what the fund is using as its benchmark as well as how it performs in relation to that benchmark. But most importantly, you should look at the absolute return on the money invested. For example, if the fund lost only 35% when its benchmark lost 38%, it’s really not getting you much, is it?

Look for how the fund performs is good markets and bad markets. Be sure you can handle that worst case scenario because you can rest assured that it will happen to you at some point in your investing life. Try and find funds that capture most of the upside of the market, while limiting the downside as much as possible. For example, a large cap stock fund that returns 75% of the S&P 500 during a bull market, and loses as much as 50% compared to the S&P 500 during a bear market would get you a smoother ride and potentially larger return, provided you are holding the fund through both periods.

• The One-Minute Portfolio. Here's the ultimate in super-simple investment portfolios, for those who don't have the time or inclination to pick and monitor individual stocks. The One-Minute Portfolio. The One-Minute Portfolio is comprised of just 3 asset allocations: Domestic Stocks, Foreign Stocks and Bonds. Here's a recommendation for each category: 1. Buy America......
• Investing Term Tuesday - Gift Of Equity. Since this is the gift-giving season, I thought it appropriate to share the Gift Of Equity in this investing term Tuesday. The Gift Of Equity refers to the sale of a home to a family member at a price below the current market value. Sometimes it can be a sale......
• How to spot an investment scam. In a single day, investment fraud can take away everything you've spent your life building. Couple that with the knowledge that scam artists are most active when times are very good, and when times a tough. You don't need me to tell you that times are tough these days, and......
• Mutual Fund Monday: The Biggest Lies Mutual Fund Companies Tell. Chuck Jaffe at MarketWatch has a great piece that I thought I'd share for my (semi) weekly Mutual Fund Monday post this week. His article lists 7 ways that fund companies manipulate their stats to trick investors. It's all quite legal, since much of it depends on your the viewpoint......
• A Tale of 4 High Income Bond Funds. Bonds have gotten a lot of attention over the past year and it's easy to see why when you look at this chart. What you're looking at is a relatively smooth ride up until the world collapsed in October of 2008. The investorspeak for that smooth ride is "low volatility",......

• Swapping Mutual Funds For ETFs I've always respected Vanguard founder Jack Bogle, he is considered to be the "Father of the Index fund" and has saved investors many billions of dollars in fees by creating low cost index funds, starting a new industry within the financial services market. The natural follow on to index mutual......
• How to Avoid Mutual Fund Fees Mutual funds are great simple long term investments which allow you to diversify your holdings and gain solid returns. They are certainly not without their critics though. Some people claim that they charge excessive fees and some question whether or not the rates of return are what they claim to......
• Good Debt, Bad Debt and Flawed Investment Return Data I can't tell you how often I hear or read someone argue that they have "good debt."   This "good debt"  argument is made to rationalize having a car loan, a HELOC or second mortgage balance, and even credit card debt.  The argument goes something like this:  "The money I have borrowed......
• Preparing for the Unexpected Financially While many people do not like to talk about the idea of unemployment, being unemployed is a very real concept that can also become very damaging very quickly for anyone who is not adequately prepared. Due to poor planning and the natural process of denial, many people who were unemployed......
• What Is A Sovereign Wealth Fund? The short answer is: something the United States will never have. The long answer is quite fascinating. But in order to understand a sovereign wealth fund we must first look at government budgets. In the United States for the last few years and the next few years we are......