In the first article of this series we learned how to read a chart. We looked at only three parts: The price action of the stock, (or index, commodity, etc.) the moving averages, and the volume. Although there are plenty of other layers complexity that we could apply, many of the best technicians don’t go far beyond this. William O’Neil, in his book, How to Make Money in Stocks: A Winning System in Good Times and Bad, doesn’t go much beyond these indicators either. Don’t get yourself bogged down in indicators like Bollinger bands, stochastics, or the many other overlays to a chart. They will do little to help.

With that in mind, let’s take a look at two chart patterns that  indicate bad times may be ahead. It’s important to note that trying to time the market is largely a fool’s game but if you see these chart patterns emerge, increasing your hedging is well advised. Hedging is simply insurance. When bearish trends emerge, you might short a stock or buy a put option as insurance. Let’s check these out.
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When you buy or sell stocks, do you use technical analysis as a way to affirm or disprove your thesis of where the stock is going in the short term? The world’s stock exchanges have seen drastic change in recent years since high frequency trading came to the market. If you’re unfamiliar with high frequency trading, simply put, computers are able to buy and sell stocks at a very rapid rate based on certain technical indicators.

Since computers can’t evaluate the quality of management, the future customer demand, or other less objective metrics, computers can only relay on the technicals of a stock. In other words, the chart. This is why learning some basic chart patterns is another tool in your stock evaluation toolbox but beware of one important fact about chart reading: Things don’t always work out the way the chart says they should.

Although we can find plenty of examples of the chart accurately predicting the future direction of a stock, there are just as many instances where a chart pattern emerged and didn’t do what the pattern predicted. With that in mind, let’s look at two patterns that may indicate a move to the upside.
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During the first six months of 2012, my wife and my sister have challenged each other to an contest. The person that sells their unused space-takers from around the house for the most, wins a free spa day from the other. As frugal as I tend to be, I’ve never had much use for EBay but I’ve sold my fair share of books online. I did it during my college years and was happy to get something back from the high price of my text books. (Especially my master’s degree books. Why are they the same size but more expensive?)

My wife is doing the same thing around the house. She has bookshelves full of books that she hasn’t touched since we were married and finally, she’s getting rid of them. But what is the best way to do it? There are plenty of web companies who would love to be involved in selling your books so who is going to help my wife win the spa day?

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The amount of collective student loan debt in America has surpassed $1 Trillion but to bring it closer to home, Finaid says that the rate of college tuition inflation is normally twice that of the regular inflation rate. That means that the cost of college will rise an average of 6% every year. Add to that the fact that wages for most Americans are stagnant, college is quickly becoming much like a home. American families cannot afford it without going in to debt.

How do you plan to pay for your child’s college education? Maybe a large portion of their tuition is covered by academic or athletic scholarships but for the average family, that isn’t the case. Needs based grants will only pay for a portion of the tuition making student loans a reality for many. A recent study by the Associated Press found that one out of every two college graduates either can’t find a job or they’re underemployed working in a field unrelated to their college major. This makes graduating with as little debt as possible a priority.

The 529 plan is the best answer to this problem. Although many plans used to allow for the purchase of years of college at today’s prices, most plans now work like a 401(k) where you invest money in to the plan and choose the mutual funds that fit your objectives. If you start contributing early, the tax advantages allow you to build up enough money to keep applying for student loans and many allow family and friends to contribute to the fund too.

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As somebody who is in the financial advising field, I’m getting a little tired of hearing that all financial advisers are duping their clients out of a lot of money but what I’m far more tired of is the fact that in way too many cases, it’s true. You may have heard about the Goldman Sachs employee who quit by writing this op ed in the New York Times. To sum it up, he was tired of advisers being more concerned about profits than they were about doing what is best for their clients. Maybe the most embarrassing part was his claim that Goldman employees refer to their clients as “Muppets.”

Then there’s this article that spoke of a study where actors were hired to pose as average customers with one of four different types of portfolios. They visited 300 Boston area advisers and the large majority of advisers changed their portfolios to more fee laden options. Seriously?
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It’s the weekend again and if you didn’t read my last post on low or no cost weekend activities, read it here. All of us work hard during the week. The majority of us reach Friday and feel like we deserve a fun, relaxing few days to unwind but we live in an economy where our paychecks are too small and the cost of having fun is too high. We simply can’t afford to take the family out to the traditional dinner and a movie any more.

Luckily, there are plenty of activities that are free, low cost or there are ways to make a high priced activity much more affordable. Today I thought I would look at some of the more traditional activities and how you might be able to cut the price down to reasonable levels.

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There’s a better than average change that you won’t spending your entire adult life working for the same company. Although the BLS wants us to know that the average worker holding seven careers in a lifetime is a myth, it’s possible and even probable that you won’t work for the same company forever and because of this, you may end up having more than one 401(k).

If you’re the hands off kind of investor, keeping these 401(k) accounts as they are, scattered with different investment institutions is allowable but probably a bad idea for a few reasons. First, they’re hard to manage. Just keeping track of a checking and a savings account is hard enough for some people who are constantly on the run. Second, since you’re limited to only a small offering of mutual funds, you can open up the amount of products available to you by consolidating these 401(k)s in to one IRA account. Here’s how.
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If you’re the mother or father of a high school student you’re probably wondering where the time has gone. It seems like only a few years ago they were getting on the bus for their first day of Kindergarten and now they’re going to prom. The time goes by fast but once the nostalgia of the event passes, reality will set in. Prom can cost a lot of money and your, at best, part time employed child probably won’t whip out their credit card for any of those expenses.

Between the cost of the dress or tux, the pictures, the dinner, the prom tickets, and the new hair and makeup, costs will add up fast but there are some ways to lower the cost of the event without sending your child to prom looking like they wearing your hand-me-downs.

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