Investing 
9
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Review: Super Boom by Jeffrey Hirsch

Super BoomI don’t normally review too many investment related books, unless I have a personal interest or I feel they have value to everyone, but I couldn’t pass up a book called “Super Boom: Why the Dow Jones Will Hit 38,820 and How You Can Profit From It.

Last October, Jeffrey Hirsch predicted, in the Stock Trader’s Almanac, that the Dow would increase to 38,820 by the year 2025. The 38,820 number sounds absurd, doesn’t it? Based on the 2010 close of 11,577.51, reaching 38,820 is “only” an 8.4% annual growth rate over 15 years. Most would call it a rosy prediction… so it’s not nearly as outlandish as it probably first appeared.

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 Investing 
45
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Robin Hood Tax

Robin Hood TaxThe Robin Hood Tax is a collection of financial transaction taxes similar to the Tobin tax, proposed in the United States. The Tobin tax, suggested by Nobel economist James Tobin, was a tax on all spot currency conversions and designed to penalize short term forex trades. The Robin Hood Tax is broader and would add a tax to a variety of financial transactions from currency exchange to stock trades to bond sales. It would also include a levy on banks and other financial activities (called a FAT tax).

Why Robin Hood? He stole from the rich and gave to the poor. This tax would steal from the rich (bankers) and give to the poor (social programs) too and the idea has the support of over a thousand economists.

How much would the tax be? On transactions like stock trades and the like, it’d be 0.05%. On a purchase of $1,000 in stock, you’d expect to pay 50 cents. If you’re a savvy buy and hold type, you won’t even notice it. The real money makers are those mega-traders who use arrays of computers and transact in the tens and hundreds of millions of dollars each day.

What do you think of this idea? I love it.

(Photo: Oxfam)


 Investing 
14
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The 2011 S&P Dividend Aristocrats

The S&P Dividend Aristocrats is a list of companies in the S&P500 that have increased their dividends each year for at least 25 consecutive years. It’s a starting point for a lot of dividend investors because 25 years is a long time and seen as a sign of reliability. Any one on the list has weathered not only the most recent recession but also the one in the late 1980′s as well as the dot com bust. It’s been a turbulent time but one thing must be clear – past performance is not indicative of future results. The list is a start but should not be the end of your research.

The list is updated annually to add and remove companies. There were several additions and several removals this year.

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 Investing 
12
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Don’t Check Stock Prices Every Minute

Don't Worry About The Stock MarketWhen I was in elementary school, we played a stock market game in which each team was given $10,000 to invest over the course of a month. It was about the time of the first Gulf War, when Iraq invaded Kuwait, and someone on our team suggested we purchase shares of Caterpillar. Then, as the days would pass, we’d review our copies of the New York Times business pages for the closing price of the stock the previous day.

That’s right… we checked the newspaper and saw only the closing price from the night before. No after market trading, no level 2 market data – none of that stuff. We were only eleven and it would be many years before you could even get real time data (everything was 20 minutes delayed, unless you paid).

The deluge of stock information only serves one purpose – increased activity. That’s why I thought it was funny that this story about a Google glitch on Apple’s ticker was even a story. The sad part is that as you watch it tick down, you don’t know if it’s a glitch or a flash crash.

If it’s a glitch, you won’t freak out when you see it. If it’s a flash crash, you won’t freak out when you see it. If it’s a real crash, chances are you wouldn’t have beaten the computer traders, institutional experts, and all the other folks who are in line ahead of you… and you won’t freak out about it either. :)

The lesson? Don’t check stock prices every minute.

(Photo: bransorem)


 Investing 
7
comments

What is a Reverse Convertible?

As a personal finance aficionado for many years, I was surprised to know little about reverse convertibles, an investment vehicle that sounds too good to be true. After reading this warning in Smart Money (and this one from FINRA) about reverse convertibles, and how they did very poorly these last few years because of the economic downturn, I thought I should know more about them, despite having no desire to ever invest in one.

I think it’s always good to be educated, even on things you probably will never use because it helps you understand the environment as a whole.

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 Investing 
9
comments

Rebalance Your Portfolio

Welcome to Spring Cleaning Week! This is the first post of the week and something I think too many people overlook – rebalancing your investment portfolio.

Rebalancing your portfolio is important because the key to investing is establishing a plan and following it. You can’t predict the bubbles before they happen in the hopes you can buy on the upswing. You can’t predict the sharp drops in the hopes you can sell before they hit. What you can do is establish a reasonable plan, adjust it as needed, and follow it to prosperity. With that in mind, the goal of rebalancing is to get your investment reality back in line with your plan.

This post is part of the 2011 Spring Cleaning Week!



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 Reviews 
5
comments

Be a Dividend Millionaire by Paul Rubillo

Be a Dividend Millionaire by Paul RubilloBe a Dividend Millionaire by Paul Rubillo is not just a book about dividend investing – there are a million of those. Be a Dividend Millionaire is a personal finance book that shows you how to integrate dividend investing as a way of building wealth on top of a solid foundation that everyone needs to have.

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 Investing 
15
comments

2011 Kiplinger’s Best Online Brokers

Every year Kiplinger’s magazine puts out a survey of the best online brokers. Every year, I take a look at the list because I’m curious how the different brokers stack up. I’d like to know if anyone has made any big changes or improvements to their service, it might change my mind about who I do business with.

Usually the lists don’t change all that much. As you scan this year’s list, you’ll see the same ones near the top, the same ones near the middle, and the same ones near the end. The meat is in the article detailing the different categories (like commissions and fees, investment choices, etc.) because it adds a little color to an otherwise robotic list.

One important thing to remember as you peruse this list: the best online broker is the broker that satisfies all of your requirements. All the bells and whistles in the world don’t matter if they don’t offer exactly what you need. With so many brokers, many of which are inexpensive, you should be able to find your best broker, online or offline, if you’re diligent.

Let’s get to the list…

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