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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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Investing Strategy: Set it and Forget It (Except Once Annually for Rebalancing)

by Luke Landes

It’s very tempting to quickly peek at your investments to see if they’ve gone up or down in the past twenty-four hours. The same technology that makes our lives so much easier, computer software, can drive us insane. It takes almost no effort to log into my company’s 401(k) website. When I’m at home, Quicken ... Continue reading this article…

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Confirmed: TIAA-CREF Laying Off 10% of Workforce

by Luke Landes

August 8 update: This is now confirmed. This is unconfirmed but in the last few hours, two employees at TIAA-CREF have written to Consumerism Commentary to share the knowledge that workers in the the Charlotte, North Carolina office are being laid off by management at this very moment. The layoffs began on Monday and will ... 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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Advice From Robert Shiller: Don’t Be a Sheep

by Luke Landes

Robert Shiller, a professor of economics at Yale University, shares advice about investing he learned in graduate school. One needs to think antisocially to excel in investing, to resist the patterns of thinking that seem mysteriously to arrive simultaneously in the minds of millions of people around the world. People do not trust their own ... Continue reading this article…

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Advice From Bill Miller: Increase Your Money Without Working

by Luke Landes

Bill Miller, the manager of Legg Mason Value Trust, shares some advice about building wealth. [My father said...] “See this ‘plus .25′? That means that if you own one share of this company today, you have 25¢ more than you had yesterday.” I had come in from mowing the grass for three hours to earn ... Continue reading this article…

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Is it Finally Time for Market Optimism?

by Luke Landes

The Dow and the S&P 500 indexes were both up 2.5 percent and the Nasdaq index was up 3.1 percent today. Is this a sign of things to come? I wouldn’t mind if it were. My 401(k) has been decimated this year. That’s a literal decimation, a reduction of 10 percent of its value. Based on the short ... 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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Is Now a Good Time to Buy Bank Stocks?

by Luke Landes

I don’t think “market timing” is a good investment strategy — in fact, it’s not a strategy at all — but it can be a worthwhile experiment if played with money you don’t mind losing. One way to time the market is to buy low-cost exchange-traded funds (ETFs). These investments act as mutual funds — ... Continue reading this article…

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Get Through a Bear Market: Don’t Cut Your Losses

by Luke Landes

Despite contributions totaling thousands of dollars so far this year, since January 1, the value of my investment portfolio is down 10 percent. That’s enough of a decline to make anyone consider giving up on the stock market. It’s an understandable point of view. My 401(k) offers an automated interview to help you choose your asset ... 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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