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As featured in The Wall Street Journal, Money Magazine, and more!

Investing

Where Did the Federal Reserve Get $85 Billion for AIG?

by Luke Landes

When I heard the news that the Federal Reserve Bank of New York is making $85 billion available to American International Group in the form of loans, one of my first questions was about the source of the money. Does the Federal Reserve keep an emergency fund available to bail out companies during financial crises ... Continue reading this article…

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Who Do You Blame When You Lose $6 Million Overnight?

by Luke Landes

The New York Post presented an article about David Shorr, a shareholder of Lehman Brothers, who lost $6 million as the company filed for bankruptcy. David spent many years as an employee of Lehman Brothers, building up compensation in the form of stocks which are now worthless. “What the hell was he thinking?” asked Shorr, ... Continue reading this article…

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Ten Things to Do With $1,000 (Plus 21 More)

by Luke Landes

If you’ve suddenly come upon $1,000 you didn’t have the day before, you may get the urge to celebrate. $1,000 doesn’t open many new opportunities to you these days, but there are a number of options. Kiplinger has published a special with 37 ways to invest $1,000, but I have a few suggestions of my ... Continue reading this article…

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Would You Ask For More Company Stock In Lieu of a Raise?

by Luke Landes

Mellody Hobson, the president of Ariel Investments, recently shared her favorite piece of advice to Money Magazine. When I was 22, a friend who is very successful explained to me that no one ever got rich through earned income. “Look at all the great wealthy families,” he said. “From Carnegie to Rockefeller, it was never ... Continue reading this article…

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The Problems Investors Should Have With the Wisdom of Crowds

by Luke Landes

Which rule applies to investing: the wisdom of crowds or herd mentality? According to James Surowiecki, author of The Wisdom of Crowds, all you need in order to make good decisions — good investing decisions being a subset of all good decisions — is a diverse, independent, decentralized, and aggregated crowd to follow. Let the ... Continue reading this article…

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7 Ways to Lose Your Money

by Luke Landes

The idea of “getting rich slowly” may well be a fallacy. While slow and steady is a great method of accumulating wealth over long periods of time thanks to compounding interest and returns, the power of inflation — real inflation, not government-reported inflation, eats away at the value of your funds almost ensuring you will ... Continue reading this article…

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The Benefits of Target Retirement Funds

by Guest Author

About the author: The following is a guest article written by Kevin from No Debt Plan. He writes to help readers eliminate debt, learn how to budget and save, and move themselves towards financial freedom. The first investment we made in one of our Roth IRAs was in a Vanguard Target Retirement fund. Generally target ... Continue reading this article…

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Fidelity and Vanguard Creating Investments to Compete With Annuities

by Luke Landes

Fidelity and Vanguard, monsters in the world of mutual funds, are busy creating new products catering to the vast number of baby-boomers approaching retirement. These products are designed to compete with annuities, insurance products with guaranteed income, but are investments products so they offer no guarantees. Like target retirement funds, the asset allocation of these ... Continue reading this article…

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Target Retirement Funds (Also Known As Lifecycle Funds)

by Luke Landes

Target retirement funds are increasing in popularity. The funds, and they may be called “lifecycle funds” or “target date funds” or “age-based funds” or a variety of other terms are mutual funds comprising other mutual funds. The allocation percentages of the constituent mutual funds change as time progresses, theoretically becoming more conservative as you approach ... Continue reading this article…

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New $25 Bonus Promotion Code for ShareBuilder Accounts

by Luke Landes

Updated June 24, 2010. Last month, I praised ShareBuilder for its low fees in a list of the best true discount brokerages. In the past, ShareBuilder has offered free money in the form of account opening bonuses to attract new customers, but these promotions have been missing since ING Direct purchased the brokerage. ShareBuilder has ... Continue reading this article…

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Make Investment Decisions Together to Avoid These Common Mistakes

by Guest Author

About the author: This is a guest article written by Dorian Wales, a 30-year-old economist with an MBA in finance. Dorian writes frequently on his own blog, The Personal Financier. Most common investment mistakes are deeply rooted in psychology. Many of these mistakes can be avoided by allowing another person to take part in the ... Continue reading this article…

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Thinking Will Cause Your Investments to Lose

by Luke Landes

Behavioral economics, a mix of psychology and finance, is an interesting field, and has taught those who choose to listen why they’re less likely to benefit from thinking they can predict the performance of a stock price. The human brain is simply not wired to make good choices in the stock market. Traders will lose ... Continue reading this article…

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Best Online Discount Brokers, November 2011

by Luke Landes

Unlike long-term investing for the future, active stock trading has qualities in common with gambling. On top of that, it’s expensive gambling. When you step up to a quarter slot machine, you know each bet will cost a quarter. You don’t lose a nickel on each spin as a “transaction fee.” In order to play ... Continue reading this article…

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The Only 7 Investments You Need

by Luke Landes

Money Magazine is recommending that those wishing to build their net worth over a long period of time simplify matters by putting all their eggs into seven baskets in the form of mutual funds. 1. Fidelity Spartan 500 Index (FSMKX). This fund’s total expense ratio is a minuscule 0.10 percent. It tracks the S&P 500 index. ... Continue reading this article…

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Fortune Magazine’s Best Stocks for 2008: Last December’s Prediction

by Luke Landes

This should prove to be a good study of professional prognostication. Last December, Fortune Magazine predicted the best stocks to hold in 2008, directing investors to ten specific stocks the magazine thinks will perform well this year. How are these stocks holding up so far, compared to the indexes? The S&P 500 Index is down ... Continue reading this article…

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Lies Annuity Salesmen Tell: A Dateline Undercover Investigation

by Luke Landes

Last year, a reader wrote into Consumerism Commentary with a story about how her elderly father was convinced to buy a variable annuity, locking away his money until after his likely passing. He had wanted to talk to a financial adviser, but found his way to Banc of America Investment Services. Recently, Dateline took a ... Continue reading this article…

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Many Exchange-Traded Funds are Not All They’re Cracked Up to Be

by Luke Landes

I own shares in one exchange-traded fund, iShares Dow Jones U.S. Telecommunications Sector Index Fund (IYZ). I picked up the shares with free money from a Sharebuilder bonus, and since it was free money, I decided to attempt to choose an investment narrower than my typical investing philosophy would normally allow. Rather than a broad ... Continue reading this article…

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Thrasher Funds’ GendeX Mutual Fund: You Know, For Kids

by Luke Landes

Do investment companies need to market to “Generation X” and “Generation Y” differently than the general investing public? Would new, “hip” investment products encourage individuals falling within these particular demographics to care about their financial future? Thrasher Capital Management was founded on the principle that these markets, as well as minorities, are currently under served ... Continue reading this article…

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8 Benefits to a Recession or Down Market

by Luke Landes

Will politicians say the word recession? Not if they’re serious about helping their party get elected. Yet, it feels like we are in a recession — or at least, that’s what the media wants us to believe. The stock market, measured by the indexes, is certainly in a downward trend, but I suppose I agree ... Continue reading this article…

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How Do Finance Professors Invest?

by Luke Landes

A researcher at Central Michigan University surveyed 600 finance professors at major universities to determine their investment philosophies, practices, and the differerences between the two. You would think that those involved in higher education, teaching about market analysis, options and futures, and discounted cash flow analysis, would use these techniques when handling their own investments. ... Continue reading this article…

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