2008-04-03

Ignore Daily Financial Noise
(2008-03-31) by David John Marotta
Investors are fickle. Investing should not be.
Even with a brilliant investment plan, it takes diligence to overcome emotional biases and avoid making investing mistakes. Naturally you love it when your portfolio values go up. But when they go down, even slightly, you may be tempted to make poor [...]

2008-03-25

Last week gold broke $1,000 an ounce. Gold advertisers and gold investment newsletters are touting their wares as though gold only goes up in value. Nothing could be further from the truth. Gold may glitter, but it is still better to own the mine.
Keep in mind that investing in hard asset stocks is not the [...]

2008-03-17

Life Insurance: Determining Your Need (2008-03-17)
by David John Marotta and Bob Arms
You may have heard that “Life insurance is a gift of love.” But if you bought a $100,000 whole-life policy because you wanted to build some cash value when you should have bought a million dollars of low-cost term insurance to meet the survival [...]

2008-03-10

Remember to Fund Your Roth IRA (2008-03-10)
by David John Marotta
If you are eligible, make sure you fund your Roth IRA or your Roth 401(k) this year with the maximum contribution possible. It may be your last chance to pay a reasonable tax rate before the prevailing winds of class envy swamp your retirement sailboat.
Although a [...]

2008-03-04

Loss Aversion (2008-03-03)
by David John Marotta
Even with a brilliant investment plan, it takes diligence to overcome our emotional biases and avoid making investing mistakes. Here is the wisdom that both advisors and investors need to bear in mind to avoid succumbing to the fallacies of behavioral economics.
It doesn’t take extensive research to determine that we [...]

2008-02-29

I’ve decided to run a mock campaign for president again as a forum to talk about public policy. Every four years I look for a candidate who understands economics, only to find politicians instead. My political bias, like many economists, leans toward freedom. The unintended consequences of much of our legislation result in great harm [...]

2008-02-19

Last week we discussed the many ways you can save money as you learn to live on your own. Our suggestions included sharing housing costs, buying a previously owned car with cash, preparing meals instead of eating out, and eliminating the frills from services that are deducted automatically each month from your checking account. Here [...]

2008-02-11

If you’re like most of today’s college graduates, you may find yourself ill prepared for the real world of financial responsibility. You never saw how your parents lived when they were first married and struggling. Consequently, you may be basing your after-school expectations on an upper-middle-class lifestyle. Here is my financial advice for those of [...]

2008-02-04

For Now, Avoid Real Estate Investment Trusts (2008-02-04)
by David John Marotta
I received my county real estate tax bill recently, and for the first time in several years, my property tax assessment went down by about 2.8%. The drop is very small, but the trend is significant. Commercial real estate investments fell sharply during 2007 and [...]

2008-01-22

Ever since communism collapsed in the early 1990s, stock markets around the world have been booming. This phenomenon is especially true in the former communist states of Russia and China. We also see it in countries that had been following the socialist model, such as India, and in former high-tariff countries like Brazil.
As students of [...]

A valuable exercise this time of year is to review your investment returns to analyze what occurred in the broader asset classes. First, check to see if your specific investments are capturing a majority of the potential market return of their asset class. Second, evaluate whether your asset allocation is optimized to balance risk and [...]

2008-01-08

by David John Marotta
The first U.S. money market fund was created by Bruce Bent in 1970. The Reserve Fund, as it was called, offered investors a way to preserve their cash liquidity and still earn a small rate of return. Today 22% of all mutual fund assets are invested in nearly 900 money market funds.
Money [...]

2008-01-02

We all want to be slim, eat healthy and get our financial house in order, but few of us are disciplined enough to accomplish all that without help. After the indulgences of the holidays, both gustatory and financial, inevitably you’ll probably resolve once again to make some changes in all these areas. You owe it [...]

2007-12-28

Scrooge’s Former Boss Fezziwig Is a Nester (2007-12-24)
by David John Marotta
One of my favorite Christmas movies is the version of Dickens’s “A Christmas Carol” starring George C. Scott as Ebenezer Scrooge. I must confess that I understand Scrooge’s character.
Scrooge — a denizen of early Victorian London — is a solitary and miserly businessman. He spends [...]

2007-12-17

Scrooge’s Nephew Fred Is a Traveler (2007-12-17)
by David John Marotta
Every December I reread “A Christmas Carol” by Charles Dickens. Ebenezer Scrooge’s nephew Fred is the character young people most easily relate to. He is young himself, carefree, in love and enjoying life with his friends. He has a “traveler” personality.
In his description of financial personalities [...]

2007-12-10

When you’re building wealth, saving a penny on your taxes is just as important as earning a penny in the markets. You can use both investment losses and investment gains to good tax advantage.
For example, in November some U.S. stocks experienced a significant drop. Disciplined investors use these declines to save on their taxes and [...]

2007-12-03

If you think hiding money under your mattress is a risk-free way of building wealth, think again. Cash, it turns out, has been the riskiest investment since 2002. Many investors try to avoid risk by putting their money in a bank account or investing in CDs. But like any other investment, cash is subject to [...]

2007-11-26

Medicare Medical Savings Account (MSA) Plans are one of the newest Medicare Advantage Plan options. Private companies began offering these accounts in 2007. Like Health Savings Accounts, a Medical Savings Account puts you in control of your own health care dollars.
If you are in good health and want to limit the maximum you would need [...]

2007-11-19

by David John Marotta and Beth Anderson Nedelisky
Many seniors look forward to saving on medical insurance costs by enrolling in Medicare at age sixty-five. However, navigating the Medicare system is not for the faint of heart. Medicare is an alphabet soup of plan choices. Currently Medicare is organized as parts A through D.
Medicare Part A [...]

2007-11-12

by David John Marotta
Health Savings Accounts (HSAs) can provide inexpensive medical coverage if you maintain a healthy lifestyle. With your healthy lifestyle you may not spend anywhere near your high deductible insurance and consequently save on your medical costs. Even if you do not need to, we recommend funding your account with the maximum allowed. [...]