We are led to believe that the best place to invest our money is in the stock market. Low barriers to entry, low barriers to exist, plenty of information, high probability of success in the long run and a lot of success stories. We also hear some of the horror stories of people who day traded tech stocks in the early 2000s, gamblers who lost it all on penny stocks, and all the chop shop, pump and dumpers like in the movie Boiler Room. However, through it all, we’ve been taught, over and over again, that if you buy for the long term, you will always win.

For today’s Devil’s Advocate post, we’re going to break down the stock market and show why we really are just little guppies hoping not to get eaten by the sharks.

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Wisdom on Value Investing by Gabriel Wisdom is based on Wisdom’s professional experience and his Fallen Angels investment strategy, a way to identify good companies that have been punished by the stock market.

Value investing is an investment strategy made popular by Benjamin Graham and brought to the forefront with the successes of Warren Buffett. The idea is that you want to buy a great company at a great price, when it’s been discounted by an emotional stock market.

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Two days ago I wrote a post about how to set a New Year’s Resolution you can keep and today I want to know what your resolution for 2010 is going to be!

Mine? I plan on taking half of our emergency fund and committing it to the stock market in individual company holdings. I’ve long been an advocate of index funds, all of our retirement savings are in index funds, and only recently have I been dabbling in buying stock in companies that offer dividends. Our emergency fund has twelve months of expenses, a conservative amount because I am self-employed and my wife is a lightly compensated graduate student.

We will invest half of the fund over the next six months in individual stocks and then replenish the emergency fund with income as the months pass. Part of the process will be learning more about the investing and the stock market in general, so this won’t be a random selection of stocks “we think will do great,” but a more analytical approach. The idea is to learn more about investing in the stock market, perhaps learning it’s just not for me, and the means to measure success will be in committing to investments and feeling good about it.

It follows the whole SMART mantra and I am confident this is a resolution we’ll be able to keep.

What’s your New Year’s Resolution? If you need some ideas, Bankrate has a list of New Year’s resolutions that will save you money (and years on your life!).

And Happy New Year!

In the December special issue of Kiplinger’s magazine, Mary Beth Franklin put together a list of tax moves that can save you big money. Normally, these tax moves are the same from year the year. Her list has a few old standbys that are also on Kay Bell’s list of year end tax moves like giving to charity and checking your tax withholding. However, there are also some 2009 specific ones such as the home energy tax credit and the first time homebuyer’s credit.

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This post is part of the one day blog event “The Spectrum of Personal Finance.” In this event, comic book nerd Brian of My Next Buck, will discuss 8 different emotions (taken from the Green Lantern comic series) and relate them to personal finance. Here at Bargaineering we will be looking at Fear. To view the rest of the event look at the bottom of the page to see the other blogs hosting articles.

When I started looking through the personal finance blogosphere a year ago I was frightened of all the information I was gathering. There was so much out there and I didn’t necessarily understand what I was reading. I didn’t want to make a misstep with my hard earned cash, so I didn’t do anything at first.

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If you’re graduated in May (congrats!), I recommend reading David Griner’s post about five things he’d do if he were graduating in May. They contain five solid tips that can help you in your career.

If you haven’t yet joined the workforce but are planning to in the next few months, I wanted to give you five things you should do before you start working.

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Do you play a sport? My favorite sport to play is basketball. There’s something about hearing the ball swish through the net that brings a smile to my face. There’s something about threading that perfect pass that makes me just a little bit giddy. Oh and setting a good solid pick to get my guy free? Love that too. While I love all the other aspects of the game, I love winning the game above all else. I don’t care how many points I score or how many assists I get, the point of the game is to win and if you don’t win, none of that other stuff matters.

It’s not like that in life. In life, you don’t always have to be the best. In this Devil’s Advocate post, I talk about how in personal finance, you don’t have to always get the best offer, sometimes good enough is good enough.

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The Complete Idiot’s Guide to Value Investing is exactly what it sounds like, a book that will teach you how to be a value investor, how to analyze industries and companies, how to dig deep into financial statements, and how to filter analysts (among other things). It’s written in the same easygoing style of the series and has little graphical clues to help anyone understand value investing. Value investing is one of the most popular investing “styles” out there and works off the notion that you can find good, solid companies that have had their share prices battered by the market. Their fundamentals are still strong but they’ve fallen out of favor in the marketplace so their share prices offer a good value, hence value investing.

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Thank you everyone who left a comment on my first Bargaineering VideoCast about Filtering Personal Finance experts, I took your advice to heart and made some changes. I still have to work on a LOT of things, like being videotaped, but at least you won’t get sick watching it!

This video talks about how there seems to be an aversion to “sitting on the sidelines.” You have money burning a hole in your pocket and you want to invest it so it can grow right? Well, when the rules of the game are changing, sitting on the sidelines may be the smartest thing you can do. Remember Rule #1 – don’t lose money!

The next video will be a product review, something where video adds value over an audio-only podcast.

I’d love to hear what you all thought, please give me more tips! (and my next video won’t have quite so much crap in the background, my wife made sure of that!)

On a recent trip home, my Dad told me about how he sent a co-worker to my website a few months ago. It turns out that that his co-worker had taken one of those 0% financing offers from a major electronics retailer for twelve months. What they didn’t know was that if they didn’t pay off the entire bill in full, they would be subject to all the interest due from the 0% period. I warn against this common fine print “gotcha” in my warning on 0% financing offers.

Anyway, the period was about to expire, his co-worker was about to get socked with a big interest payment and a higher rate, and they didn’t know what to do. My dad told them about 0% balance transfers and they were able to secure a twelve month reprieve, now paying it off regularly as they should’ve done in the first place. My dad told me that he had no idea how my site was popular until that point because he saw it help someone and how happy they were to find a five-minute solution to a problem they’ve had for weeks.

I had the same experience in watching a video about peer to peer lending service, LendingClub:

The video really opened my eyes to peer to peer lending the same way my dad’s experience with his co-worker opened his eyes to my website. This is a site that is helping people when they have no where else to turn to. The two minute video profiles an Army medic who found himself owing his employer four years in pension payments in one lump sum payment (not sure how that works but that’s how they described it, awfully nice of his employer!), and he needed to find $16,000! Through LendingClub, he was able to get a loan.

The amazing part about the entire story was the graph charting online lending’s progress. In 2005, online lending was a $118 million market. In 2008, it’s 1.55 billion. Yes, BILLION. They believe it will go to six BILLION by 2010. Regardless of what it gets to in 2010, it’s clear that this isn’t some fad that will fizzle away in a few years.

I want to start lending but it turns out Maryland isn’t on the list of places eligible to invest in notes. Shucks!