The benefits of using retirement plans such as a Roth IRA or a company sponsored 401k are huge. Many companies match 401k contributions now, and some of the best company matching contributions are as much as 2 to 1. The concern I have now is that so many people hear stories about how many people have lost their entire retirement savings in the stock market, or are badly hurt because they invested in stocks or mutual funds. I certainly hope that investors around the world don’t decide to get away from contributing to retirement plans and tax free distributions from the Roth IRA.

As an informed investor you must understand that you are in control of exactly what you hold in those retirement portfolios. There is no need for you to feel like you are boxed into any kind of investment, because there are so many options out there that can help you get to where you want to be. If you need financial advice seek a top retirement planner for guidance on what to put into your retirement portfolio, but certainly don’t forget to diversify.

Remember those who have been hurt the worst are those who have had their entire 401k in company stock. Having a little in company stock is fine, but never let yourself be boxed in by putting your retirement plans on the shoulders of one company. Also remember that retirement portfolios can hold safer investments such as treasury bills, certificates of deposits, and money market savings accounts.

There have been plenty of people lose a large amount in their 401k or IRA plans, but if you take the proper steps to diversify your portfolio you can minimize your risk. Please don’t stop using these plans which are extremely helpful in the long run if they are used in the proper way.

Yes, for the near term. Dow leapt 497 points. S&P 500 soared 7.1% to 822, its biggest gain since October 2008. Geithner’s plan will benefit the financial stocks, so obviously all financial stocks went up dramatically yesterday. Wall Street is happy that somebody is going to own the toxic assets and banks don’t need to worry about those bad assets anymore.

Did we just cross the bottom? I don’t think so. For starters, fundamentals are not changed. Unemployment is still the same. Existing home sales improved a little bit. February sales increased 5.1% month to month to a seasonally adjusted rate of 4.72 million. Economists expected a 0.9% decrease to 4.45 million. This number may be misleading because of high number of foreclosures across the country. What I mean is that although the number of sales is improved, you have to look at the quality of the sales. We will get the report of new home sales on Wednesday. That may tell the true story of what is happening in housing market.

Overall the market has positive bias. Major corporations are scheduled to announce earnings in the coming weeks. Market will change the direction depends on the quality of the earnings. Walgreen missed earning estimates yesterday. Jewelry retailer Tiffany’s reported slightly better earning but its revenue fell 20% year over year. It also issued downside guidance for current fiscal year. We have to look for earnings from Citibank, Bank of America, JP Morgan Chase, Goldman Sachs and Wells Fargo to get an idea about the health of the banks and also to gauge the effectiveness of stimulus package. Earnings from GE, Caterpillar, P&G, Wal Mart, Merck, General Motors, Home Depot, Microsoft, Hewlett Packard, Cisco and Intel will also give us the better picture of the overall economy.

Volatility index VIX closed down 2.66 points to 43.23, which is still well above the 200 day moving average. The relative strength indicates that there is still some support to the bear market rally argument and there is still some fear in the market.

As always trade wisely and use stop losses.

Wall Street is celebrating. Dow was up by 497. Many financial stocks are up by more than 16%. The Treasury Department said today that a new public-private partnership could purchase $1 trillion in soured assets from banks, which would allow them to renew lending. Taxpayers will stand to reap gains — alongside investors such as hedge funds and private-equity firms — if the investments prove profitable. That “if” is the real key.

Many in Wall Street believe that Treasury Secretary Mr. Geithner’s plan work out very well and save the banks from further troubles. What is this plan exactly? Most of the major banks in U.S. have toxic assets in their balance sheet. These assets lost value and continue to lose value. That’s why it’s called “toxic”. Typical example is mortgage securities that lost 70% value in the last two years. Banks want to get rid of these assets to spice up their balance sheet. But, no one wants to buy these assets at the value quoted by the banks.

Banks want 60 cents on the dollar for the assets. Private investors believe that these assets are worth only 30 cents on the dollar. Now, the Fed walks in and loan the money to group of investors to buy the toxic assets from the banks for 60 cents on the dollar. Private investors get tax payers’ money to buy the assets. Banks get rid of the toxic assets to clean up their balance sheet. If private investors lose money on this investment, they don’t need to worry, because the Fed is guaranteeing the investments.

Why banks are quoting 60 cents on the dollar for the assets even though the market value is only 30 cents? Because if banks sell at 60 cents on the dollar, there is a good chance that these banks will go bankrupt.

Now, the trillion dollar question is: Can the toxic assets be cleaned by private investors to provide better return for the taxpayers? There is no easy answer. Geithner’s plan can fail miserably if the banks get greedy again after removing bad assets from its books. If private investors are not serious about cleaning up toxic assets because these investors have little to lose, the plan will fail.

This is what great economists like James Galbraith and Paul Krugman are worried about. Both economists called Geithner’s plan as “extremely dangerous”.  Mr. Galbraith urges the Fed to examine the toxic assets (bad loans) of the banks before saving them. He claims that there is a possibility of fraud or misrepresentation on the side of the banks.

At this point, Fed doesn’t have many choices left. Buying toxic assets from bank is one of the options. It’s extremely good for the banks because they can get rid of toxic assets and shine up their balance sheet. Will it be good for American people? There is no clear answer. We can only hope that Geithner’s plan works as planned. If this plan doesn’t work, we will be doomed.

Related Links: Geithner’s plan for bad bank assets | Geithner’s five big misconceptions | Geithner plan arithmetic

Today is a good day to point out the single biggest myth of a bear market; the myth that in a bear market stocks there will be not be significant rallies. Today the Dow gained about 500 points, and the S&P 500 gained more than 7% on the day. Clearly today was a day where the gains were extremely broad based and the market was full in buying mode. Does this mean that today’s signals the end of the bear market, or the beginning of a bull market? It most certainly does not.

If you look back at past bear markets, including the bear market that occurred in 2002 in the United States stock market, you will find that some of the largest point and percentage gains on a single day basis for both the Dow and the NASDAQ were during the midst of a bear market. A bear market rally is generally extremely short-lived, but it can be very powerful and leave investors feeling great about themselves for a short period of time.

The simple fact of the matter is that stocks never go in a straight line up or down, and those who try to read too much into the short-term momentum of the market are bound to be burned quite often. A bear market is prime territory for stocks to jump in a single day because those who are short sellers often cover and take their profit and the gains are exaggerated quite a bit because of this occurrence.

The next time you are tempted to think that a bear market cannot have a major rally remember that bear market rallies are extremely common, they are just different than a bull market rally, which is far more sustainable. Only time will tell if the current rally is a bear market rally or the beginning of a bear market bottom, but we’ve seen this kind of action before and I caution investors against chasing the market in either direction.

New Year’s Day has come and gone and so have the resolutions. Many of those who joined gyms at the beginning of the year with the hope of attaining their dream physique might probably be conjuring up some excuse to quit. The only thing holding them back being the hefty sum they coughed up while joining.

With health and fitness becoming the mantra, many Americans find themselves paying a considerable amount on gym memberships. Unfortunately, most gyms require membership fee to be paid for the entire year even if you cancel in between.

So, how can you save on gym expenses?

Try bargaining:

Don’t go in for the standard package which your gym offers. Try haggling for lower prices. Most gyms have a sales team which receives commission for every member who joins. So, try the bargaining technique towards the end of the month when the sales staff is hard pressed to meet targets. You never know, you might be able to get a great bargain. Then again, this only works if you are not already under contract. If you have already signed up, there is no scope for negotiation.

See if you can get short term memberships or trial offers:

If you are a beginner, you probably would like to try working out for a short time before you decide whether or not you will continue. In that case, you won’t need a long term membership. Ask your gym whether they can provide the option of a shorter contract. You can also ask for a trial membership. Once the trial period is over, you can decide whether you want to continue or go elsewhere.

Many gyms offer free one day trials as part of their marketing strategy. Make use of such offers to check out a prospective gym so that you know what you are paying for. Check out their facilities and the quality of service they render.

Try to avoid peak hours:

Many gyms offer reduced rates at off peak hours. So, if you can adjust your schedule such that you can work out during the daytime or on week days, you can get yourself a good bargain.

There are other places to work out:

A gym is not the only place where you can work out. Many local leisure centers and university gyms are open to the public for a very small price. They have almost all the basic facilities that a gym has, without the frills.

Choose smaller gyms:

If you are a beginner, try smaller and less frequented gyms. That way, you will be able to get individual attention from your trainer. Trainers in big, crowded gyms do not always have time to give individual attention to each and every member. This makes it tough for beginners.

Make use of discounts:

Many gyms offer discounts for those employed in certain organizations. Some health insurance providers also offer discounts at gyms. Check out if your gym has such offers.

Avail of guest passes:

If your friends work out, they may be able to buy guest passes for you. That way, you will not have to pay for a long term membership. Some gyms even offer free guest passes for their members. So if you know anyone who works out at a good gym, don’t hesitate to ask.

Pound the pavements:

If you do not need to use facilities like basket ball court or pool, try working out in the park instead. You can run, jog or cycle to burn the calories. Take along your pet or a friend or spouse for company. You get to breathe fresh air and you can also use the park benches for push ups. To top it all, it is absolutely free.

Work out at home:

You can get DVDs with instructions on how to do light weights, yoga and aerobics. Get your friends to join you and rest assured you will have a great time working out.

So you see, with so many options available, signing up for gym does not need to leave a hole in your wallet.

Troubles in emerging markets would have been an appropriate topic for this post. Emerging markets were sexy not too long ago. I invested heavily in emerging markets long before the troubles popped up there. I reduced my holdings in emerging market mutual funds over time, but still I have substantial amount of capital locked up in emerging market mutual funds.

It appears that it is going to take many months, if not years, before emerging markets finally get back their groove. Among all emerging markets, Russia and Latin America look really bad compared to India and China. Historically Latin America is more vulnerable to external financial conditions. Ecuador was already defaulted. Argentina and Venezuela face their own internal challenges. Brazil is doing relatively well. But, key problem for all emerging markets is the heavy outflow of foreign investments.

Many emerging markets borrowed heavily when the capital was freely available and the banks were doling out the money. Now, the situation is changed dramatically. As we all know, the banks all over the world are begging for money from their respective governments just to survive. Foreign investors are pulling the money from emerging markets either to meet their obligations in their home country or because of the fear of unknown. Local investors in emerging markets stopped or reduced their investments because of local unemployment and housing collapse.

Low oil prices also hurt countries like Russia. Lower commodity prices hurt markets like Latin America and China. Although the commodity prices are turning higher recently because of $300 million infusion by Fed, that trend may not sustain. Many economists in emerging markets believed that their economy is decoupled from problems in U.S. Current global recession proved their theory wrong. Decoupling theory gave false hopes to emerging markets. When the reality hit, emerging markets went down fast and furious.

The World Bank estimates that in 2009, 104 of 129 developing countries will have current account surpluses inadequate to cover private debt coming due. For these countries, total financing needs are expected to amount to more than US$1.4 trillion during the year. If the situation in Latin America, Russia or China worsens, this number may be revised upwards.

When the emerging markets recover, it may not come back with vengeance, but the profits are going to be decent mainly because of the prices have gone down so low. If you are already invested in emerging markets, this is not the time to bail out. However, if you plan to invest in emerging markets, wait for some more time to see if the foreign investors’ cash is going back to the emerging markets. Foreign Direct Investment (FDI) is the major catalyst for these markets. If FDI cash inflow improves, that would signal the turning point in emerging markets.

Those who are familiar with the Wall Street saw today’s move coming as soon as the Federal Reserve made its announcement yesterday that it would be buying a lot of treasuries securities. What was the big move? No it wasn’t in the stock market, which moved down some to give back some of its recent gains, but it was in the commodity and the currency markets. A weak dollar and strong commodities ruled the day, and will likely continue to be the norm for the near future.

The United States plunged against other currencies as news of the major treasury buy weakened the value of the greenback, and this plunge in the dollar gave the green light to all things commodity related to take off in today’s trading. Gold ended futures trading today at $958.30 an ounce, up just less than $70 in one trading session alone. Oil crossed back over $50 a barrel for the first time since the end of November, and gasoline futures surged as well. The Reuters Jefferies Commodity Index, also known as the CRB index, which tracks all commodities, gained over 5% on the day today.

Why are the commodity bulls so happy? As the Federal Reserve pumps more and more money into the financial system and the dollar falls it makes commodities cheaper for holders of other currencies and tends to give more confidence about the demand for those commodities as well.

In the near term this means that consumers are likely to see some pretty substantial increases in prices at the pump. Gasoline prices, which now average about $1.94 for a gallon of unleaded, are likely to go back above $2, and probably $2.10 in the near future.

This is all part of a broader realization that in this economy the Federal Reserve cannot give without taking away. The Federal Reserve will likely succeed in driving down mortgage rates, but they will also drive up costs of raw materials and energy. Will the treasury buy be a good move in the long run? Only time will tell, but for the time being I think they should be given the benefit of the doubt because of the severity of  the crisis.

Just minutes ago the Federal Reserve announced that it will be buying $300 billion in longer-term Treasury Bonds over the next six months in a major effort to help the economy recover. Economists and investment strategists were quite surprised by this move by the Federal Reserve Open Market Committee. In response to this move treasuries, especially intermediate-term treasuries have been bought up quickly as investors scramble to invest in the things that our government is investing in. If you would like to read the full text of the FOMC statement you can here.

Previously many experts believed that the FOMC would hold off on buying treasuries due to the risks of inflation in the future. Clearly the Federal Reserve has decided that it is willing to take the risk of causing inflation over the long run so that it can try to jump start the economy and provide stabilization to the overall markets.

What are the benefits of this major treasury buy on the market? The Fed clearly wants to drive mortgage rates lower and lower credit spreads on loans on balance sheets. This move also shows that the Federal Reserve has another major weapon to use to combat the crisis, when some were worried that they were left with very little to do.

Are there possible negatives to this move? The long-term risk of inflation is there, but it is one that the FOMC is likely not a bit worried about right now, and I can’t blame them. The bigger risk is that this does signal that the Federal Reserve believes that the economic crisis we are currently in is getting worse and worse and they needed to make a drastic move such as this one.

The bottom line is I believe this move overall is a wise one and one that should help in the long run, but the fact that this move had to be made in the first place has to give investors some pause about the state of the economy in the coming quarters.

While any kind of economic rebound appears to be at least several months away there is never any harm at looking into the future. In fact, if you can predict what areas will do the best when the economy does rebound, you can do yourself a lot of good both from an investing standpoint as well a career standpoint.  During an economic recovery there are always sectors that lead the move, and it is a great idea to try to do your due diligence and decide which you believe may fit that criteria, even though it may take time to come to fruition.

The typical businesses that thrive as the economy rebounds are manufacturing and construction companies that begin to bounce back nicely because economic activity is picking up once again. In addition to those, retail names generally do well when the economy recovers because of the increase in consumer confidence and spending. Cyclical names that are out of favor generally come back into favor quite quickly during an economic rebound.

Will the economic rebound that comes after this major recession look like a normal rebound? That really is the million dollar question. There are some factors which may delay the recovery in some groups that typically recover quickly. For example, the banking industry is generally one of the first to move higher, but it may be hard pressed to bounce back right away after the debacle of the credit crisis. On the other side of this there may be areas that are bigger winners than normal. One possible area that could do very well in the recover is alternative energy companies. Even manufacturing and industrial companies that are in front of their peers in “going green” are liable to bounce quicker. I truly believe that the move toward a greener world is not a short-term blip this time, but rather a real and serious effort that can be profitable for companies.

Investing in mutual funds is a very popular thing to do for many investors. Mutual funds make a lot of sense for a large section of the population since they allow you to quickly pool your money with other people’s money and receive professional management and great diversification of your investments. Before you invest in a mutual fund, you should always do your own research as to which fund is worthy of your investment. I have compiled a list of five sites that are great to use for mutual fund research purposes.

Top Five Mutual Fund Research Sites On the Net

1. Morningstar.com – For quite some time now Morningstar has been considered the gold standard in mutual fund research, and for good reason. Morningstar has dozens of analysts in all of the mutual fund fields that are specifically trained to follow every move that the mutual fund managers make and take note of every correct and incorrect step they take. Compare mutual funds in the click of a mouse at this site with no problems. Morningstar mutual fund ratings are also available for free to the public. The broadest offering of mutual fund research is here.
2. Yahoo Finance – The Finance site at Yahoo has always been one of their stalwarts and the mutual fund page is definitely very useful. The mutual fund screener is dynamic, and completely free to use. Yahoo also has an easy way to track the top 10 holdings of each mutual fund in daily trading.
3. WSJ.com – Wall Street Journal Online is often overlooked for mutual fund research, but I find the site to be very useful. The site is great at ranking which funds perform well vs. their peers over the short and long run, and the mutual fund charts here are above average.
4. Kiplinger.com – Kiplinger Magazine is much more focused toward investments such as mutual funds versus individual stocks, and the website also has some great information. Kiplinger has a list of its favorite mutual funds, which it calls the Kiplinger 25, which have outperformed the market nicely in the long run.
5. Fool.com – Motley Fool is a good website to use to understand the basics of mutual funds as well as the catches of some mutual funds. The Fool does a great job of showing investors what to avoid when looking for great mutual funds.