Automatic Saving

Is Buy and Hold Finished? Read What Hulbert Says About Market Timing

By in Advanced Investing, Asset Allocation, Automatic Saving, Bond, Investing, Mutual Funds | 15 comments

Market Timing versus Buy and Hold Investing; The Gloves are Off Is it wrong to delight in “proof” that my investing practice and writings are correct? Mark Hulbert, long time author of the Hulbert Financial Digest and Wall Street Journal (WSJ) columnist asked, “Can Market Timers Beat the Index?” in the July 20, 2013 week end edition of the Journal. He answered this frequently attempted practice with raw data! Who is Mark Hulbert? First, some background on Mark Hulbert. He empiricallly evaluates the trades recommended by 200 prominent newsletter authors. You know who they are, the investment scions who purport to know what holdings to buy and sell and when, in order to beat the market. These investment gurus sell investors their recommendations in published newsletters. Hulbert evaluates their recommendations with back testing and reports who offers the best advice during each period. In the above referenced WSJ article, Hulbert calls out Bob Brinker’s Market Timer. Brinker successfully counseled his readers when to sell their stock holdings in January, 2000. Those who followed his advice about when to exit and next when to get back in (October, 2002) missed the bear market at the beginning of the century. So you think, this must be the man to watch. Unfortunately, Brinker completely missed predicting the 2007-2009 bear market. You already see where this is going. It’s not easy to consistently time the market. Click here for Free micro book-How to Invest and Outperform + Wealth Tips Newsletter If you are still interested in market timing and want to know which newsletter will bring you riches, ask Mark Hulbert, or better yet, subscribe to the Hulbert Financial Digest. What is Investment Market Timing? Market timing is an investment strategy which advocates buying and selling securities based on external signals in an attempt to attain market beating returns. The factors to observe could include technical signals such as the 30 or 90 day moving average of a stock. Fundamental metrics, such as the price earnings ratio (PE) could also be used in market timing. For example, when the PE ratio or Shiller PE surpasses its historical average a market timer might believe that his stock investments are becoming overvalued and decide to...

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What Not to Do With an 401(k) Rollover

What Not to Do With an 401(k) Rollover

By in Advanced Investing, Asset Allocation, Automatic Saving, Investing, Money Management, Mutual Funds, Retirement | 0 comments

The 401(k) Saga-Don’t do This! Financial professionals frequently suggest rolling over your 401(k) into an IRA when you leave a job. The down side of leaving your retirement account with the old employer means you’re subject to their fee structure and investment options. If you rollover your 401(k) into an IRA-you gain control! Advantages of a 401(k) Rollover into an IRA You choose; where to house your money. Already have an account with Schwab, Fidelity, Vanguard, ETrade or another discount broker? You can transfer the funds into the same company. You may make money rolling over your account. We got a $600 bonus from the discount broker when I transferred my husband’s old 401(k) into a new discount broker. Make sure to ask, these types of benefits may not be widely advertised. What investments to choose? If you like ETFs, you can buy them for the account. Prefer low cost index mutual funds? Choose whichever variety you prefer.  Click now to get a low cost plan to cut investment fees to the bone and manage your own investments. You can control costs buy purchasing a low cost product. Disadvantages of a 401(k) Rollover Into an IRA There may be fees when you leave the former company 401(k). Some holdings may need to be liquidated before you can transfer them out. There’s some paperwork and oversight, and you must make sure to do a ‘custodian to custodian’ rollover to avoid taxes and early withdrawal penalties.  401(k) Rollover-Don’t Do This We (okay, I) make a mistake in rolling over my husband’s 401(k) into a Roth IRA when he left his last job.  In 2011 my husband switched jobs. We moved across country, from Pennsylvania to California. If the stress of a cross country move wasn’t enough, we sold our house too fast and so had 3 months with nowhere to go before our new house in California was slated to be available. So, those 3 months in Mom and Dad’s basement were the beginning of a big new adventure. But, I digress. We had a lot to do and I didn’t worry about the Pennsylvania employer 401(k). It was invested well and there was no urgency to do anything. Eventually, we...

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The Saving Secret Worth $366,000

The Saving Secret Worth $366,000

By in Automatic Saving, Money Management, Saving | 0 comments

The I Hate to Save-Kick in the Butt Latest news just in from Sun Trust Bank Survey: “Many higher income households are living paycheck-to-paycheck” We are notoriously bad at imagining our future. In fact I remember playing with my Great Aunt as an 8 year old and thinking, “I’m never going to be this old, ever”. Then I remember thinking about how old I’d be when the new millennium came, and the same thought reoccurred, “I’ll never be that old”. This inability to image the future is a problem. Whether you can imagine it or not, the future will come for most of us, and along with the future will come kids, bills, vacations, homes, expenses, and ultimately retirement. During those decades there’ll be plenty of upsets, smaller problems like a blown tire to life changing medical scares, and retirement. Here’s the deal, if you ignore the future, or avoid it, you’re going to have problems. The Sun Trust Survey (conducted online by Harris Poll) found: You’re not saving enough. These findings apply to those households that earn $75,000 or more per year.  Almost a third of those households which earn $75k or more live paycheck to paycheck, at least part of the time. Forty four percent admitted that the worst causes of under-saving were over-spending on eating out and entertainment. Seventy one percent of millennials confessed that eating out and entertainment kept them from saving enough. Only 37 percent of those ages 45 to 54 believe they are saving enough to live comfortably in retirement. Thirty three percent owned up to the fact that a “lack of financial discipline”, at least some of the time, keeps them from reaching their goals”. Simple Saving Secret Solution {Part 1} If this research is correct, then here’s half of a simple fix. Go to the grocery. Buy some food. Cook it and eat it at home. I dislike cooking as much as the next person, but most nights, I cook. Why? Because I like having the freedom that money provides. By practicing simple cost cutting lifestyle hacks, you can turn small amounts of money into big bucks. This simple saving secret is no more than a habit.  Quit Making Excuses: “I’m...

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The Magic of Compounding-Get Rich While You Sleep

The Magic of Compounding-Get Rich While You Sleep

By in Automatic Saving, Investing, Mutual Funds, Saving, Stocks, Wealth | 11 comments

What is the Magic of Compounding? “Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.” Peter Lynch    One of the greatest investors of our time attests to the simplicity of investing in the stock market. Read this post and find out why. Following is the “Cliff Notes” version of why you need to put part of your long term investment dollars in the stock market.  Click here for FREE wealth TIPS and access to the 14 Rules of Investing Stocks + The Magic of Compounding = $$$   The historical long term growth of American business is amazing. American business is frequently represented by the Standard and Poor’s 500 Stock Index (S & P 500). This index of 500 stocks is considered a barometer for the complete US Stock Market.  Forget about the previous recession and downfall of the stock markets for a minute and take a peak at some historical returns of the S & P 500. Although historical returns do not guarantee future returns. When looking at these returns, think about the stock market as a collection of U.S. businesses, not mutual fund or brokerage account statements. Then ask yourself if you think U.S. businesses and the economy will grow over the next 20, 30, or 40 years? The first time I really studied this type of data was in 1993.  Although I had been investing for a while prior to that time, my husband was still skeptical. I wanted to convince my husband of the importance of putting money into the stock market so I prepared some data for him. Fortunately, for us he was convinced by the historical information, so we boosted our investing at that time and have watched our investments grow over time while continuing to contribute regularly to our investment accounts.  Click here for Free micro book-How to Invest and Outperform + Wealth Tips Newsletter  But what does this return mean in real dollars?  Growth of $1,000.00 – At various interest rates Put $1,000.00 in at the beginning of each period. Do not add any more money.  TIME PERIOD  RATE OF RETURN  VALUE OF $1,000.00 AT END OF PERIOD  40 Years                        9.19%  $33,675.55 ...

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3 Behavioral Finance Tips – Stop Stealing From Yourself

3 Behavioral Finance Tips – Stop Stealing From Yourself

By in Automatic Saving, Guest Post |

Use Behavioral Finance to Build Wealth Guest Contributor, Alexandra of Real Simple Finances.com             When you spend money on things that you don’t need, you are stealing from yourself.             This may seem like obvious advice to some, but if we take a quick look at the consumer-driven society we live in, it is clear that this is exactly what all the stores want us to do: we have opportunities to open credit cards at every major clothing store (which doesn’t help you make the most of your credit cards!); we are pressured to buy the newest electronics whenever a slight upgrade is made; we even go to restaurants where employees are in competition with each other to push specific menu products.             Upgrading to onion rings for .99 cents probably won’t break your budget, since it is possible to live well and spend little, but when you consistently make it a point to purchase things you don’t truly need, you end up taking more important things away from yourself.             You steal your finances.   Use Behavioral Finance to Stop Stealing                         This is the most obvious way you are stealing from yourself when you make unnecessary purchases. Unless you have free reign to spend as you please (hint: if you have debt, you probably do not have this freedom! I sure don’t), you are taking away money that could be put toward financial freedom. The secret to getting rich {without winning the lottery}-click here.             Even if you don’t have any debt, it is important to analyze the purchase you are making and compare it to your ultimate financial goals. In this case, you want to be particularly careful with larger purchases, such as TVs, new vehicles, a gaming system update right after it has been released, and so on. These purchases, which can cost anywhere from one week’s pay to a year’s salary, can seriously injure your financial stability.             Small purchases – a pair of designer jeans, a coffee, or the same style boot in two different colors – do add up, but since you are reading this blog I imagine that you are already conscious of your daily spending....

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Get Rid of Money Stress with Free Text

Get Rid of Money Stress with Free Text

By in Asset Allocation, Automatic Saving, Bond, Budget, Debt, Inflation, Insurance, Investing, Mind and Money, Money Management, Mutual Funds, Personal Finance, Retirement, Saving, Stocks, Tips | 0 comments

You Can Live Without Money Stress Click here to get FREE investing book. It will reduce money stress + build wealth A recent Amercian Psychological Association Survey found that Money is the leading stressor for Americans. In spite of the finding that overall stress in the U.S. is at a seven year low and average stress levels are falling, money stress continues to distress us. Click here to get this FREE investing guide to build a 6-7 figure retirement fund (even if you’re over 40) You’d think financial worries were worst during bad economic times. Yet, since this survey began, in 2007, regardless of the economic climate, money stress is the top worry. This year’s survey, sponsored by the American Psychological Association (APA) and conducted by Harris Poll surveyed 3,068 adults in August 2001. Of these 3,000 plus Americans, 72 percent felt stressed about money at least some of the time during the last month. Twenty two percent of the group were extremely stressed during the past month. Most of us, or 64 percent found money to be either somewhat or a very significant stressor. While over 75 percent of parents and those aged 18 to 49 years old had significant money worries.  These worries come at a physical cost as well. Some of the respondents shared that their money stress even caused them to skip doctor visits when ill, to save money. Click here to get FREE investing book. It will reduce money stress + build wealth Are there any positive outcomes of this stress survey? Those with strong friends and family ties report lower stress levels than those without. Additionally, overall stress levels is trending downward, from an average high of 6.2 (out of 10) in 2007 to 4.9 last year. How to Combat Money Stress with Information and Education The more action you take to improve your situation, the better you feel, in general. Many of you don’t really know how to tackle many money issues. Nor do you understand how to build wealth for the long term, in order to reduce your money fears. I want to help solve these money problems with you. This week, I’m offering a free copy of Invest and Beat...

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