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October 11, 2006
10-11-2006: Items of interest for the Family CFO
Investing And Retirement
In an effort to shore up U.S. workers' retirement savings, the Labor Department has proposed new rules making it easier for companies to automatically enroll employees in 401(k) and other retirement plans. Retirement policy think tanks like the Center for Retirement Research and the Employee Benefit Research Institute have been advocating this for years based on studies that have found it increases participation. (MarketWatch.com)
Ben Stein talks about a fundamental principle of successful investing -- whether you are talking real estate or paper assets -- you buy, not bail when markets are going down. Conversely, rising markets are the time to sell, not blindly follow the herd. (Yahoo Finance)
Any fool can lose money on an investment. Any fool can make money in rising markets. The trick is how to make it every day -- day in and day out -- no matter what. Robert Kiyosaki makes the case for cash flow in, Learn To Invest Like a Pro.
How many opportunities have a 50% expected rate of return with no risk? Scott Burns talks about the impact of deferring Social Security benefits, even just a few years. (Dallas Morning News)
Scott Burns also talks about the increasing number of lawsuits against companies, for failing to live up to their fiduciary duties as sponsors of 401(k) plans. At issues are high fees which over time drag down performance. Suits have been filed against Bechtel Corp., Caterpillar Inc., Exelon Corp., General Dynamics Corp., International Paper Co., Lockheed Martin Corp., Northrop Grumman and United Technologies Corp. Can more be far behind? (Dallas Morning News)
Mutual funds have always reported their performance as a time-weighted return. Morningstar has announced it will begin reporting the dollar-weighted return which more accurately reflects the money investors made in that fund and are typically lower than the time-weighted return. You should read Mark Hulbert's article for a nice run-down of the difference between the two and the implications to investors. (MarketWatch.com)
The LA Times reports on "pension envy." While private-sector pensions are being slashed, leaving pre-retirees to fund a 30 year retirement on their own, public sector employees still enjoy rich pensions. The problem is, many of them, like private sector pensions, are under-funded. Guess who has to pay for the under-funding? Taxpayers. The same tax-payers who are having their retirement funds cut. Some taxpayers are getting really pissed off about it. (LA Times)
Managing Lifetime Risks
Does Tony Soprano need more life insurance than Mike Brady? If you answered yes, you are not alone and it could be costing you money. A survey, by the KRC Research firm, which asked people to choose which of five TV dads needs the greatest amount of insurance, illustrates a mistake many folks make when it comes to insurance: focusing on the chance that they will die instead of examining the financial losses their family would suffer if they do. (MarketWatch.com)
No question healthcare costs are the big X factor in retirement planning. But, it is not totally out of your control. Robert Powell, editor of Retirement Weekly, gives us a rundown of seven steps outlined by the CEO of AARP, in his new book, that America and Americans can do to mitigate health-care costs in retirement. (MarketWatch.com)
Market Sentiment and Investor Psychology
Barry Ritholtz comments on the re-appearance of Dow 36,000 author James Glassman. He was on CNBC last week. Can anyone really take CNBC seriously anymore? What a farce. If there has ever been a better contrarian indicator of sentiment, I haven't seen it. (The Big Picture)
Something I learned later in life than I should have is that our psyche plays itself out in how we handle our money. Laura Rowley gives us a nice article on the three aspects of Money Maturity. Are you mature or immature when it comes to money? Read this article to find out. (Yahoo Finance)
The Economy
Jim Mahar gives us an overview of the speech, by Fed Chair Ben Bernanke, on how the aging Baby Boomers will affect the economy. (Finance Professor.com)
Kim Snider, Kim Snider Financial Communications, Chronim Investments and/or Snider Advisors make no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. Call 866-952-0100 to request the Snider Investment Method™ Owner's Manual, which includes a description of the Snider Investment Method, investment objectives, risks, suitability and other information. Please read and consider carefully before investing. All investments are subject to risk including possible loss of principal.
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Kim Snider is an author, speaker and host of Financial Success Coaching, Saturdays at noon, on KRLD Newsradio 1080, Dallas - Fort Worth. This blog is primarily devoted to empowering individual investors with information to help them be good stewards of their money. Above all, it is about achieving true financial success. Kim's book, How To Be the Family CFO: Four Simple Steps to Put Your Financial House in Order is in bookstores now. Order yours from Amazon or other fine booksellers today.
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