Thursday, April 23, 2009

Searching for Market Direction

These days everybody is searching for clues about where the stock market is headed. I wrote a post a while back about predicting stock market direction. The stock market sure is volatile these days; one week the market is up, the next week it is down. Even on a day-to-day basis, the stock market sentiment can turn around 180 degrees. Although my original post is more than a year old, it remains as applicable today as it did when I wrote it.

I think that we would all like to have some insight into where the stock market is going, and I am not a psychic in this regard. But, there are ways to predict the direction of the stock market. These predictive insights come from the stock futures markets.

The CME Group (formerly called the Chicago Mercantile Exchange) trades stock market futures contracts. Specifically these futures contracts are for the S&P 500 and Nasdaq 100 and are known as equity index futures. By observing the behavior of these equity indices, you can often predict how the stock market will do in early trading. This prediction gets more and more accurate as it gets closer to the stock market opening.

The CME Group has a page that displays the most popular equity index futures in one place. Pay special attention to what is known as the "Globex Flash Quotes". Each week, the Globex trades nearly continuously from Sunday evening through Friday afternoon. This is by design so that US stock market futures can be traded by people around the world.

In the example, green numbers for the S&P and Nasdaq futures predict an up day in the stock market. Red numbers would predict a down day. However, I will warn you that these "predictions" are only reliable for early trading. I am sure that you've seen it happen many times where the stock market opens up in the beginning and ends significantly lower. Or the stock market drops in the early minutes of trading, only to recover significantly before the end of the day.

Another places to look for a predictions of stock market direction are in the International Market indices. These indices tell you how the overseas markets are doing. If the markets in Asia and in Europe have had a down day, it is likely that the US markets will follow suit.


Monday, April 20, 2009


There are many pitfalls to writing a finance blog. Among them are deflecting comments from irate readers who (like most of us) have lost money in the financial markets recently, and are looking for somebody else to blame for their misfortune. But nothing irks me more than the wholesale plagiarizing of my blog. This is the one issue that makes me want to throw in the towel, and quit blogging for good.

Let me be clear on what plagiarism is not. If you copy a portion of a blog post (1-2 paragraphs), but attribute that the author (usually with a link to the original post), that is not plagiarism. In fact, this is generally encouraged among bloggers who appreciate incoming links. However, I have recently discovered a website that reproduced my last 6 posts on PFStock, verbatim. This website is a stock market blog written by somebody named "Allen". And, he has stolen credit not only from me but also from a several people that I recognize as stock market bloggers.

The way that I discovered this fraudulent website is mostly by chance. I recently wrote a post that I linked to a post on Smarty's blog, Growing Money. When I reread his post, I noticed that someone else had linked to his blog post with a topic that was very similar to mine. I wanted to see what the other poster said, and I clicked on the backlink to discover my own post reproduced on the plagiarizer's website. This blogger was even too lazy to edit the links.

Anyway, to deal with the issue, I found out the Email of the website owner by using the WHOIS Lookup for domain name servers at Network Solutions. I also also found an Email address for his web hosting company. Armed with this information, I drafted an Email that looked something like this:

Dear Sirs:

It has come to my attention that a website run by you has been deliberately plagiarizing material from my blog PFStock ( ) without my permission.

I demand that you immediately cease and desist this activity, and that you remove from your website all of the stolen material. If you fail to do so, I will seek further action against you and your company.

PF Stock

After sending this Email to the plagiarizer and his web hosting company, another exchange of Emails ensued. Finally, I got the plagiarizer to remove the stolen posts from his site. I also noted that if I ever catch him plagiarizing again, I would take legal action against him.

Like I said, plagiarism is probably the one issue that really makes me want to quit blogging. Hopefully, this will be the last time I have to take such measures against people copying my blog. But somehow, I doubt it.


Thursday, April 16, 2009

How Much Do You Make?

That is the question that everybody would like to know the answer to, but nobody wants to ask. I mentioned before how readers are innately curious other people's net worth. I think this is because of people's natural curiosity -- wanting to assess how one is doing compared to others. When you read new blog or meet somebody new, do you ever wonder how much they make?

So, how much do you make? Madame X, who writes My Open Wallet (one of the blogs on my blog list), has asked the question not once but twice. Do you think she got any responses? In fact, she received hundreds of comments on her posts. Here are a few that I picked out.

I'm 35, I have an AS in Culinary Arts and I am a restaurant manager in Tallahassee, Fl. My base is 32,500 plus up to 12,000 in bonus.

24, Female, Process Engineer in a Healthcare Environment. Work remotely (from home) in ATL. 66K - all benefits 10K in bonuses for 76K total.

Live in Nashville, TN. I am 31 and work in sales. Made 87k last year, worked an average of 41 hours per week, have 1 month paid vacation, and have a full time personal assistant. This year due to the economy I am on pace for 64k.

35 yo single female in Denver with BS and MD degrees, making $350K/yr with $200K savings, work 60 hour weeks with weekends free to ski.

28 male living in north jersey. No college education - manager in retail (Never work Sundays) salary 78k + bonus and perks exceeding 10k. Don't let anyone fool you, there's is money to be made for hard workers with a lack of formal education.

Single male, mid 30s, in-house attorney for midsized corporation in Miami. Total income this year between 300K and 400K, depending on bonus.

So, now I'm asking: how much do you make?

Note: Anonymous comments are welcome. See also the annual income poll in the sidebar of my blog.


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Tuesday, April 7, 2009

Latest Money Market Rates

Overall, savings account interest rates are continuing to drop. It has been difficult to keep track of the rates that I've been getting in my various money market accounts. So, I've decided to periodically post a list of the annual percentage yields (APYs) for institutions that I have accounts at, or have otherwise mentioned in the blog. These rates are sorted by APY.

2.05% Umbrellabank Pot O' Gold Money Market
1.75% Citibank Ultimate Savings
1.65% HSBCDirect Online Savings
1.65% Countrywide SavingsLink
1.50% ING Direct Orange Savings
1.45% E*TRADE Complete Savings
1.20% Guaranty Bank Gold Rewards Money Market
0.85% Washington Mutual (WaMu) Online Savings
0.75% Western FCU Money Market
0.32% PayPal Money Market*
0.05% TD Ameritrade Money Market*

Rates are believed to be accurate as of 4/6/09. I did not include banks that had special, or introductory rates in the list because these are not ongoing interest rates. I am also not including non-liquid accounts such as CD's in the list.

*Note that the PayPal Money Market and the TD Ameritrade Money Market funds are NOT FDIC insured.

After my last post on the topic, I did open an Umbrellabank Pot O' Gold Money Market account, which gives the highest interest rate in my list. The 0.85% rate that I'm getting at Washington Mutual (WaMu) is particularly disappointing, and I have been moving money out of WaMu (soon to be Chase) over the last few months.

My fellow blogger, Smarty has published a interesting post with a few institutions that are still offering good interest rates. Please see his post 10 High-Yield Savings Accounts. Note that his post is more than a month old, and the interest rates may have changed.

Historically, money market funds (offered through brokerages) have paid a higher interest rate than their counterparts at commercial banks. However, this situation has reversed itself, and the money market funds are now at the bottom of the list. Money market funds are NOT insured by the FDIC. However, money market accounts offered through banks are.

Due to the ridiculously low interest rates paid by TD Ameritrade and other ongoing issues that I've had with TD Ameritrade, I'm seriously considering moving my assets to another brokerage. Does anybody have some suggestions?

In these times of uncertainty, I will repeat two pieces of advice that I think few people would disagree with:
1) Never exceed the FDIC insurance limits.
2) Don't keep all of your money in one place.


Thursday, April 2, 2009

Determined Californians!

I have mentioned the Retire Early Home Page Discussion Board as being a resource for those interested in early retirement. Topics on this board range from starting to save for retirement to leisure activities after retirement. Some posts seek investment or retirement advice from other readers. One post in particular has stuck in my mind over the years. This post titled "Early Retirement Plan needs investment advice" was written on August 12, 2005:

We have a very serious plan to retire in 3 years (2008) and need advice on investing the lump sum Capital Gains from our properties.

Our plan is to have a total of 10 rentals by the end of this year. So far we have 5 and buying homes very aggressively to achieve this goal by the end of this year. We are breaking even after renting each home. I figure that by the end of 3 years, assuming they all appreciate at the current rate of 30% we will have $2.7M in equity.

After 2008 the Capital Gains tax reverts back to 28%. We want to sell all our properties in 2008 pay the taxes at the 15% capital gains rate and start our retirement. Our thought is that we live off the interest for a long period of time.

I will be 45 and my husband will be 38. This will be a huge accomplishment if this happens and we’re working very hard at it.

I have read many books, articles and logged on to many websites. I still have a long ways to go on educating myself in the investment arena.

What suggestions do you have for rookies like us in putting our money is a safe but of course high interest account to allow us to live off the interest?

We have a combined total of $35,000 in our 401K, both currently work making a combined income of $170,000/yr and have no other investments besides our rental properties. After our planned retirement, our expenses would be $70,000/year to live comfortably, after paying off our main residence.

Determined Californians

This post was written by shelnbud, and is the only post that this author ever posted on the Retire Early forum. Replies to this post from other members of the message board were critical of the lack of diversification in the author's "retirement plan". I don't think I need to add my own commentary since the post itself speaks volumes...