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Archive for December, 2009

How to Find Great Shopping Deals?

Tuesday, December 22nd, 2009

Forget clipping coupons and checking comparison shopping sites to find best shopping deals. If you have iPhone or Droid smart phones, you can find best deals using ShopSavvy application available for iPhone and Droid. Just scan the bar codes of the products you want to buy, the application will tell you where you can get better deal.

TheFind.com also has application for shopping deals. The website has good information too. Just like ShopSavvy, Redlaser also has application that scans products’ barcodes and find the best deals available. These applications don’t work in iPod Touch. If you have iPhone or Droid, give it a try. Most of these applications are free.

Related Link: Keep your personal spending in check

Keep Personal Spending In Check During Holiday Season

Monday, December 21st, 2009

This is definitely not what all of the major retailers want to hear or what the government wants the citizens being told right now, but the truth is it would be wise for all consumers to keep spending in check during this holiday season. The economy does appear to be recovering, but as of right now the labor market is still in trouble and personal wages haven’t been growing at the pace they need to for the normal person to feel comfortable about their situation.

I’m certainly not saying you shouldn’t be buying any gifts this season or spending any money, rather I am simply saying that even though things look better than they did at this time last year I think it would be wise to act with a lot of restrain before spending too much of your hard earned money. Personal savings tips you learned during the recession and the ability to make your dollar go as far as possible shouldn’t be dropped just because things look a little brighter right now.

The retailers and the government obviously and understandably want people to go out and spend money in large amounts to kick start the economy, but as a consumer you must look out for yourself first and remember not to try to do more than is wise for your budget planning. 

Use things such as special promotional sales, coupons, buying in bulk to try to make your money get farther all throughout the year. The holiday season is a time where extra expenses are inevitable, but limiting those expenses and not stretching yourself and your family too thin during that time is absolutely vital to your overall well-being. Have a great holiday season and enjoy all of the festivities, but don’t forget about your personal savings and the status of your budget or you’ll end up with a holiday “hangover” of sorts.

Stock market shows vulnerability, but keep it in perspective!

Thursday, December 17th, 2009

The stock market recovery in 2009 has been a very impressive one. All in all things certainly look much better now than they did at this time a year ago. The possibility of a second Great Depression has been avoided and an economic recovery, although slow, seems to be starting. As an individual investor it is important to keep perspective about where we are and where we have been. The broad based S&P 500 is up more than 60% from its low set in March of 2009, and all the major indices are up in a huge way.

A day like today shows the vulnerability of a stock market that has gone so far and so fast. The overall market is very weak today after several pieces of fairly bad news. FedEx issued a very disappointing third quarter forecast, jobless claims were higherthan expected for a second week in a row, and Citigroup plunged after the government backed outof a deal to sell more shares of Citi stock at a very depressed price. All of these together caused investors to stand back and take a breather from this market. The simple fact of the matter is that when the market has performed as well as it has in the past few months any kind of negative news will likely cause more of a pause.

In an economic recovery things won’t go in a straight line upward. Continue to watch the overall long-term trends and hopefully we will keep seeing good news. The truth is we should be very glad that we are in a market environment now where negative news comes as a surprise. Remember last year when negative news was the norm and any inkling of positive news was hard to find? Keep things in perspective and keep watching the long-term trends and invest wisely!

Ben Bernanke- Time’s Person of the Year in 2009

Wednesday, December 16th, 2009

ben bernankeIn recent weeks Ben Bernanke has been taking a lot of heat in the Senate as they debate whether to confirm Bernanke to a second term or not. His first term expires on January 31st of 2010. At least for the moment Bernanke will get his day in the sun as Time Magazine announced him as their Person of the Year for 2009. Since Time Magazine started naming their Person of the Year in 1927, the honor has gone to the person with the most influential and newsworthy person from that year.

Time Magazine described Bernanke as “the most powerful nerd on the planet.” While at Princeton Bernanke was a leading scholar of the Great Depression. Bernanke concluded that the passive Fed of the 1930’s contributed to the depression, which is precisely why he decided that the Federal Reserve could not afford to be passive during this financial crisis. Most definitely this severe economic recession that dominated the news in 2009 could have been another depression, but Time Magazine, as well as many others, believe Bernanke helped stop that depression. He led the charge in reshaping monetary policy and injected millions of dollars into an economy that was screaming for help from somewhere.

Personally I find Bernanke to be a solid choice as Person of the Year for 2009. Bernanke gets little credit for his understanding of Main Street, but he really isn’t a Wall Street man by heart. In Time Magazine’s interview of him Bernanke says “I understand why people are frustrated, I’m frustrated too.” He goes on to say, “This is all very real to me,” and lets the world know he understands this isn’t a video game or anything to be messing around with. Probably the best quote of them all from the interview is “I’m not happy with where we are, but it’s a lot better than where we could be.” I couldn’t agree more with the Fed Chairman on that quote. While our economy isn’t in a good place, things looked as if they could get much worse. There will definitely be different challenges going forward, but in 2009 Bernanke did a solid job at the helm.

Apple’s Volatility

Tuesday, December 15th, 2009

I wrote about “Sweet Apple” few months ago. It’s not that sweet anymore, at least in the near term. Apple’s shares were going thru insane volatility for last 3 weeks. I couldn’t figure out what was going on.

It seems that Apple is impacted by problems in new iMac computer monitors and the competition from Google’s Android phones. I still believe in Apple’s growth story. I feel that things will change very quickly as soon as Apple’s new tablet PC is announced sometime early next year. I own Apple shares and options and will keep buying Apple when it goes even lower.

Consumer Confidence and Retail Sales Bring Great Economic News

Friday, December 11th, 2009

Maybe, just maybe, the consumer is starting to feel like dipping their toe into the water. It seems as if the consumer is finally starting to feel confident enough about the current path of the American economy to start to spend some money and get the ball rolling. Today both the retail sales number from November and the University of Michigan consumer sentiment number from early December showed a whole lot of promise.

Retail sales rose by 1.3% in the month of November, more than double the estimate that economists were looking for from the month. A strong Black Friday and Cyber Monday certainly contributed to the report, which showed that consumers are no longer feeling as if they shouldn’t spend at all. Clearly discounting at retailers helped bring consumers in, but in the past even deep discounts hadn’t been enough to make consumers make the purchase.

Consumer sentiment jumped to 73.4 in early December from a reading of just 67.4 in November. This is the highest level of consumer confidence in 3 months. Most analysts believe that the slight improve in the labor market as well as promotions and discounting for holiday sales has gotten consumers into a better mood in the last month.

Consumer confidence and retail sales don’t always move in the same direction, but when they are both moving upward it is certainly a strong positive for the overall economy. Consumers account for 70% of the American economy and without strong consumer spending the American economy simply cannot thrive. The current upswing isn’t yet a confirmed trend, rather it has the potential to be the start of something big. The real key going forward will be whether the labor market can continue to improve, which would in turn allow consumers to continue to feel more comfortable making purchases and stimulate the entire economy.

Controversial TARP Program to be Extended

Wednesday, December 9th, 2009

The controversial TARP Program, which had been set to expire at the end of 2009, will be extended through October of 2010, Tim Geithner announced today. The treasury secretary said that the extension will be met with shifted priorities for expenditures through the program. The program was initially set up to deal with the economic disaster of last fall by allowing the United States government to purchase assets and equity from financial institutions. The program basically gave the government the authority to go in and buy out troubled portions of any troubled financial institution.

The real controversy over the time that the TARP Program has been in place has surrounded two things: exactly what the TARP is supposed to be doing, and exactly when the TARP money should be used. One of the biggest cases was when PNC Financial received $7.7 billion in TARP funds, only to use that money to buy up National City and create a massive merger. In addition firms that have been getting this bailout money have continued to pay huge compensations to executives, which has definitely drawn the ire of the average tax payer.

What exactly is the TARP program going to go toward in the next year? According to the treasury secretary the majority of the TARP money in the next year will be spent on giving aid to homeowners and providing capital to small and community banks so that more small businesses are able to get access to credit once again. Geithner said that the government injections into large banks have been “effectively closed,” but that the smaller banks will continue to receive some capital from the government.

The TARP program has certainly helped the economy in some areas, but some worry about endless spending to try to get the economy out of debt. I agree with getting some aid to consumers and small community banks to open up the availability of credit again, but the government must make sure the banks are using this money properly or the system will be very flawed.

When are government bonds a good investment option?

Tuesday, December 8th, 2009

A bond is a debt security. When you purchase a government bond you are lending money to the government. In return for that money, the issuer, which would be the government in this case, provides you with a bond in which it promises to pay a specific rate of interest during the life span of the bond and then repay the face value of the bond (the principal) when it matures. There are many different types of bonds, but government related bonds are much safer than corporate bonds or junk bonds, so we will focus on government bonds in this particular post.

What are the benefits of bonds? The biggest benefits of investing in bonds are you will receive a predictable amount of income from them and they will certainly protect your capital. Government bonds don’t come with the same risks that many other investment assets come with, which is definitely a positive for many people.

What is the downside to government bonds? The single biggest downside is that over time they generally can’t keep up with other asset classes from a performance standpoint. The fact that they carry so little risk also brings no chance for great returns.

Bonds should be used in conjunction with other investment assets such as stocks, mutual funds, and commodities to make up a fully diversified investment portfolio. Bonds create a very nice safety net that is very good to have when the economy goes into a tailspin and other asset classes plunge.

As one gets close to and then enters retirement bonds become a much better investment option. Bonds are a terrific way to preserve your capital while also earning a decent amount on top of that initial investment amount. Those who are looking to have a safe place for their money should look toward bonds and top bond mutual funds as solid investment choices.

Take advantage of short term savings account offers

Monday, December 7th, 2009

Because of the major downturn in the economy and the fact that interest rates now sit at about zero it is certainly hard to find a high yield savings account now, but there are still some better offers out there that wise investors should take advantage of. In order to appropriately use these short term savings account offers you will need to stay on top of the terms and be ready to move your money when the time has expired, but in the end it is worth the small amount of hassle that this will require.

Some online banks offer short term savings accounts at an introductory rate that is much better than the average savings account you will find at your local bank. While most local banks savings accounts are earning something like 0.10% you can find money market deals and savings account offers that give you in the range of 1.25-2.5% on your savings account. It may not sound like a whole lot, but in the long run it adds up in a big way. Even some bigger banks regional banks like Huntington are offering things like premier money market accounts where you can receive 1.5% for at least 90 days.

Take a look at the money you have in your savings account or money market account. What are you earning? If you continue to just let your money earn virtually nothing then you are getting behind the game. You need to get proactive and give the banks in your area a call and see who has the best money market specials or best savings account rates. If none of them are satisfactory try using an online bank that has great rates.

Short-term savings and money market account offers are not nearly as abundant as they used to be, but they are still out there and it is up to you to go out and find them!

This Is No Time to Worry About Higher Interest Rates

Friday, December 4th, 2009

Earlier today the positive economic surprise that Bharathi wrote about was the drop in the unemployment rate and the minuscule amount of jobs lost last month. Since the news from the labor market hasn’t been positive in quite some time today’s news is most definitely welcome and very important to the economy and the market.

As only the stock market can do it instantly turned from a positive reaction to the jobs number to slightly negative on the day due to worries about the Federal Reserve possibly moving to raise interest rates sooner rather than later because of this positive announcement on the economy. I think this is definitely the wrong reaction to news of this sort. First of all, please remember that the jobs market still lost 11,000 jobs last month, which is much better than it has been, but we still have a long ways to go. In addition Ben Bernanke has been adamant that the FOMC will keep rates at historical lows as long as is necessary to stimulate the economy and pull out of the downturn. When the economy is still in clear danger and jobs haven’t even been created it is a little strange to be terribly worried about inflation or the need to raise interest rates in the near term.

Sure interest rates will eventually go higher in the long run. They can’t go any lower! The truth is though, worrying about a small uptick in interest rates that may come in the distant future shouldn’t be on the minds of investors or consumers right now. Right now any kind of good news in the labor markets that might signal more people will get a chance to go back to work is extremely good news, no matter what some market analysts may tell you! Interest rate worries are far overblown right now, and the continuing goal should be to move the economy forward!

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