28 March 2010

Tax Minimization Strategies

It’s tax time again. Let’s see what we can do about minimizing your tax burden for 2009

While there are a limited number of strategies for individuals, it still makes sense to save every penny you can on your tax bill.

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31 January 2010

Selling Covered Calls

While options are generally the lair of the expert trader, there can be some cases where using options can behoove even the casual investor.

Covered calls represent an opportunity for investors to limit their downside at the expense of some of their upside. In certain markets and circumstances this can be a very desirable outcome.

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2 August 2009

Some Thoughts on “Dollar Cost Averaging”

“Dollar Cost Averaging” is pretty much an accepted wisdom in investing circles today, but when we refer to DCA what are we really talking about? Are we using the right terminology?

When we are talking about “Dollar Cost Averaging,” are all our preconceived benefits really as proven as we think? What are the benefits of Dollar Cost Averaging?

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23 April 2009

The Difficulty of Investing in 2009

The current economy is a very difficult environment. Competing and conflicting situations make a coherent strategy difficult. Several things make 2009 a particularly difficult nut to crack:

• Asset Class Issues
• Government Interference
• Conflicting Short and Long Term Issues

How can an investor overcome these issues?

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8 February 2009

Investing Prerequisite #3: Goals and Time Horizon

Once you have cleared out all your debt and created an emergency fund, it’s time to think about why you’re investing. It is impossible to have a strategy without knowing what the strategy is intended to accomplish. The investment strategy of a 20-something trying to buy a house, a 40-something trying to save for their children’s college, and a 50-something trying to catch up for retirement are very different.

The sooner you need the money, the less risky that segment of your portfolio should be. Riskier investments typically give better returns over the long haul, but in the short term they can be disastrous. The when of your strategy will be the single most important question in determining an investment strategy.

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6 February 2009

Investing Prerequisite #2: Expanded Emergency Fund

Many people will debate the details and priority of this, but quite simply there is no reason to begin investing until you have enough liquid cash to survive for a reasonable period. Unfortunately, this can mean different things to different people.

What does liquid mean?
What does reasonable mean?

You need to answer these questions as soon as possible.

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4 February 2009

Investing Prerequisite #1: How To Deal With Debt

Deciding when and how to pay off your debts is not a simple matter. While it can be comforting to be debt-free, that may not always be the most financially expedient approach-nor is it the whole picture. Here are a few steps, including analyzing and paying off debt, that really make your money work FOR you.

First you must establish a fund to allow for emergencies in your life. Then you need to adopt a strategy for getting rid of the rest of your debt. The freedom this will allow you is key in making investments. Paying off your debts is a must before proceeding.

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3 February 2009

Basic Investment Template

My next several posts will be attempting to define a basic investment template. Basically I’d like to develop a checklist to help anyone figure out where and how their money should be invested. Most investment advice I read is very vague. While most contain good advice it is usually in a vacuum. You’d have to read hundreds of these articles to develop a coherent strategy and you still might miss a key point. I will update this post as I create each installment and may reorder and edit them based on your input and questions. I will also be posting much more frequently until the template starts totake shape. Please feel free to start putting any questions below and I will attempt to answer them as I go.

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28 December 2008

Is It Too Late For An Investing Strategy?

Many people were caught unaware by the economic chaos of 2008. They watched as retirement plans that they had been considering secure “money in the bank” lost value at a rate they’d never seen before. To be fair, except for those who were alive during the great depression, those kind of losses were unprecedented. According to the Federal Reserve, the net worth of America decreased by over 11% from the 3rd quarter of 2007 to the 3rd quarter of 2008. This means that, on average, most people have worked hard the past year to be worse off financially than they were the year before. However, that logic applies a misconception that has driven most Americans’ investment strategy.

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