Guest Post: Stock Investment Tips for Beginners

If you are planning to invest your cash then you need to have a stable financial base. Your priority task would be to pay off your existing debts, added to it save a decent amount of money from your income and control your expenses. In order to avoid any loopholes in the plan a guidance of a financial advisor is mandatory.

You need to have an excellent understanding about your financial condition. If you are still not aware then try to acquire more knowledge in the field of financial investment.

In case you are planning to invest your hard earned money in stock market then you need to study the stock market structure carefully. This article would share few tips for the beginners in the investment field so that you can glide in this journey.

Some Useful Tips:

• Right financial education: The newbie in the field of investment should acquire enough domain knowledge about the stock market. Do an extensive research on annual report and market history in order to get better perception on stocks. You need to expand a wide range of knowledge in case of personal finance. So consult the experts in order to get right information on the investment theories. Keep yourself updated with latest news on finance so that you can analyze the market well.
• Definite time for investment: If you are nascent in this field of investment then take some time out to trace the definite period for investment. If this is your first investment then take advisors guidance to make correct decisions. Once you start buying and selling stocks you would get a better knowledge on this field.
  
• Logical approach: Always have a logical approach when you are dealing with stocks. As you are investing your money so you would always expect a successful deal. While investing get a fair idea about the investment plan where you are putting the money in order to get a positive result. Look for companies that are booming and has a good reputation in the investment market.
  
• Look for a stock broker: If you are looking for a reliable broker only online searching won’t fetch you better result. Ask your friends and relatives who are veterans in this field to find you a trustworthy broker. Even if you have found one then verify his reliability from your friends and relatives as well as his market reputation. If you make a wrong choice in this case then you might land up in a soup.
  
• Look for a reputable company: If you look for investment in a reputable company then you are bound to get reward for it. The success rates of the investment plans are quite high. If you are investing your hard earned money then you need to go for loyal and trustworthy companies.
  
• Investigation is crucial: You need to collect information regarding the investment plan as it would help you to take correct decision. Try to get information from multiple sources and do a comparative study of the different plans as this would help you get a better result. In case you are evaluating the investment plan it would help you to trace the flaws in it.
  
• Go for low risk investment: One of the low risk investments would be to invest in bonds. If you compare the returns of savings account with bonds then opting for later would be a better option. In this case your money is quite secured and would also boost quickly. As you would invest in low risk securities so you would reap a low income from it.
  

About the Author
This is a guest post by Kevin Craig who is a financial writer. He has helped lots of debt burdened people with free counseling and advices on many finance related topics.

Money Market Rates 8/10

Here are the latest money market interest rates of the banks that I've been tracking on my blog. Note that these rates are sorted by APY, and represent institutions that I have accounts at, or have otherwise mentioned in my blog:

1.35% Discover Bank Online Savings
1.29% Ally Bank Online Savings
1.10% HSBCAdvance Online Savings
1.10% ING Direct Orange Savings
1.03% Shorebank Direct Online Savings**
0.70% Citibank Ultimate Savings
0.65% Western FCU Money Market
0.40% Chase Plus Savings
0.30% E*TRADE Complete Savings
0.16% PayPal Money Market*

NOTES: *The PayPal Money Market fund is NOT FDIC insured.
**On Friday, August 20, 2010, ShoreBank, Chicago, IL was closed by the The Illinois Department of Financial & Professional Regulation, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. The FDIC has issued a press release regarding this matter.

Rates are believed to be accurate as of 8/20/10. I did not include banks that had special, or introductory rates in the list because they are not ongoing interest rates. I am also not including non-liquid accounts such as CD's in the list.

This month, Discover Bank Online Savings has the highest interest rate of the banks that I'm tracking. So, there is the latest list. Please let me know if you know of any higher interest rates.

DC

Problems With Blogger Polls

For a while now, there have been technical problems with some of the polls that I use in the sidebar of my blog. I have one poll about annual income and one about net worth in the right sidebar. In short, these polls have not been properly recording votes. In my post about annual income and net worth, I stated that there were already 93 respondents to the annual income poll. However, since I wrote that post, new votes have not been recorded and the total number of votes has actually dropped below the 93 that were already recorded.

I first noticed this problem when Blogger upgraded their "Template Designer" a couple of months back. The polls in Blogger are supported by Google. Some bloggers have complained about this problem in the Blogger help forum. But, judging by how Google is responding in posts like this one, it is clear that the polls are not working. Google doesn't really have a solution to the problem, and they are denying that any problem even exists.

In any case, this is a word of caution that my polls might not be up to date. Are there any suggestions for more reliable polling sites that I could use for my blog?

DC

Guest Post: Simple ways to pay off your credit card debt

The total consumer credit card debt in the U.S. today exceeds a whopping $800 billion! Credit card debt can be crippling and lead to a lot of stress. This menace is almost like an epidemic today gripping a large number of people across the globe. Are you also one of the victims? If yes, then read on to know how you can avoid being in credit card debt.

1. Assess your financial situation: First of all, you should stop panicking. Try to get a complete picture of your financial situation. Figure out how much debt you need to deal with. Prepare a list of your debts and prioritize them as paying the wrong debts could be costly. Tackle the balance with the highest interest rate first, when that one is paid off move on to the next highest interest rate.
   
2. Prepare a budget: If you think that budgeting means financial handcuff, then you are wrong. On the contrary, it helps to inculcate a sense of financial discipline in you. When you are fully aware of your financial situation, you are less likely to overspend. Thus you keep yourself away from debt. Create a budget that will help you to stop relying on credit cards.
   
3. Reduce your expenditures: You are in the process of repaying your debts; therefore cutting out on expenses would be a great idea. Look for ways to lower your phone bill, electricity bill, auto insurance and the like. Challenge yourself to restrict your expenditures for bare necessities. You will be surprised at the savings that you make after this. Now apply your savings to pay off your debts.
4. Opt for low interest cards: Transfer your balances from high interest rate cards to the low interest one. Now you can make a single monthly payment towards this card. You are basically consolidating your credit card debts into one affordable payment. This way you are eliminating the need to manage too many payments at one time. While transferring your balance, do not close all your cards at once as this can affect your credit score.
   
5. Increase the monthly payments towards your balances: Now that you have started paying down your new consolidated balances, double the minimum payment you were paying on the old balances. Avail yourself of the low monthly interest and pay more in order to reduce your total debt.

Keep these points in mind to ensure that you stay away from debts forever. Clearing off your debts completely takes time and you should be patient. Determine to take a pro-active approach and then even you can proudly live a debt free life!

About the Author
This guest post was written by "Jack Reed". He writes on various financial topics with a special focus on bankruptcy. If you are interested in writing a guest post, please contact PF Stock at the Email address listed in the sidebar.

S&P 500 Video

I have recently figured out how to embed videos into my blog thanks to the folks at INO.com (pronounced "I know"). This video is about the Standard & Poor's 500. More specifically, it is about the battle between the Bulls and the Bears, and analyzes whether the S&P 500 and the general stock market will move up or down. INO.com uses Trade Triangle technology for technical price analysis of the stock market. You can view this video without leaving PFStock.

This short video talks about the price movements of the S&P 500 over the past couple months. The presenter, Adam Hewison, shares his views on the stock market. I think you'll find this video technically interesting as well as educational.

For more trading ideas, visit the Trader's Blog

When I viewed the video, I noticed that it appears a bit grainy unless you view it in full-screen mode. The embedded video also seems to slow down the loading of blog pages slightly. So, I'll try not to publish more than one video at a time. Please Email me, or leave a comment if you have any difficulty viewing the video. At the end of the video, you can click on the video for a Free Email Trading Course offer. I encourage you to sign up for this since it is free.

Disclaimer: I am an affiliate and member of INO.com. Although I have been able to make money using their MarketClub product, no guarantees can be made. All investments involve risks, so please consider your objectives wisely before investing.

DC

Pay The Early Withdrawal Penalty?

When you hear the term "Penalty" as in Early Withdrawal Penalty, do you automatically recoil thinking that if you have to pay a penalty that you have done something wrong, something bad? I am here to tell you that one alternative to keeping your cash in a low-yielding money market account or short-term CD is to get a long-term, 5-year CD now. Then "pay the penalty" if you need to withdraw the money, or find a better interest rate later.

I recently opened a 5-year Ally Bank High Yield CD that yields 2.94% APY. Some people may think that it is not a good idea to lock in such a mediocre interest rate for 5 years since only a couple years ago, these interest rates were in the range of 4-5% or higher. However, the rate currently being offered by Ally is much better than any short-term CD or money market available.

The second part of the equation is that Ally Bank charges an early withdrawal penalty of 60-days simple interest if you close your account prematurely. I did some research and found that this is one of the lowest early withdrawal penalties available.

If CD or money market rates go back up to the 4-5% range, I intend to close my CD account, pay the penalty, and establish a new account at the higher rate. I already did some back-of-the-envelope calculations that show I would be much better off doing that even after having to pay an early withdrawal penalty.

Let's take a quick example of a $10,000 CD and for simplicity, round off the interest rate to 3% instead of the 2.94% offered. Assume that you deposit the $10,000 in a 5-year CD, but have to withdraw your money after a year to handle an emergency. At 3% simple interest, you will earn $300 before the penalty. Sixty days of interest equals about $50. So your actual return for the year would be $250, or 2.5%. Even with the penalty, the 5-year CD beats out the typical rate on a 1-year CD (which currently yields about 1.5%) by a wide margin. Another point is that the $50 penalty is tax-deductible as an above the line deduction. (This is line item #30 "Penalty on early withdrawal of savings" on form 1040).

The main risk of a long-term CDs is the chance that interest rates will rise and you’re committed to the lower rate until the CD matures. But with a small early withdrawal penalty, if rates rise significantly, you can still consider withdrawing the money, paying the penalty, and putting the money back into another account with a higher interest rate.

Disclaimer: The example provided here is for illustrative purposes only. I am not providing tax or investment advice. I encourages readers to consult with a tax adviser if they have specific questions about how to deduct early withdrawal penalties on their taxes.

DC

Guest Post: 7 Keys to Smart Stock Investment

Have you been contemplating lately to make money by trading in the stock market? Are you aware of the fact that thousands of people have filed for bankruptcy after suffering huge losses in the stock market? Are you sure your knowledge of how the market functions is good enough to give you a great return on your investment? If you really want to maximize your trading opportunities for maximum gains, then read on to know how you can go about achieving it.

1. Plan: Many investors do the mistake of jumping into the investment market without even having a clue as to what they want to accomplish from it. This is the worst mistake you can make. Sit down and plan. Prepare a strategy and ask yourself what you want to achieve with your investment plan. Do you want to buy a car by the end of this year or a house after 5 years? Planning out this way and being clear about your goals helps you to plan effectively.
   
2. Do extensive research: You should identify the industries which are losers today but are posed to return handsome investments in the long run. Be aware that the companies which are doing well today may altogether be left behind in the investment race tomorrow. The market is volatile and the losers of today might provide you with great returns once the economy turns around.
   
3. Begin with small investments: It is advisable to start of your investment career by investing small. If you start off with big investments and lose it immediately, it might put you off stock investing for life. Learning the basics and gathering experience is vital to increase your confidence in the investment market.
   
4. Diversify: An effective strategy in building a long term investment plan is to opt for a combination of investment options. Just going for an arbitrary collection of stocks will not be very beneficial. The idea is to find a combination of investments which will help you to achieve your financial goals. Spread your investments to lower the risks involved. This will help you create an unsinkable portfolio!
   
5. Wait for the right time: Timing is everything in the stock market. To maximize your returns, you should know how long you should hold on to your investment before selling them. It can make the difference between earning and losing money.
   
6. Seek advice from a stockbroker: Stockbrokers are experienced and can help you out with valuable advice with your investment plans. However, they charge fees and it’s up to you whether you want to seek their advice.
   
7. Never risk more than what you can afford to lose: The most important advice is never to risk more money than what you can afford to lose. People are tempted to invest beyond their means if the potential investment seems safe. This is a mistake, there is always a risk involved and it’s better to always be prepared for it.
   

Making money in the stock market requires learning. Do not get carried off by stories of people making millions of dollars in the stock market overnight. The shifts and turns in the stock market are consistently fluctuating. With patience, practice and education you can also pave the path to a successful and rewarding investment career!

About the Author
This guest post was written by "Jack Reed". He writes on various financial topics with a special focus on bankruptcy. If you are interested in writing a guest post, please contact PF Stock at the Email address listed in the sidebar.

Money Market Rates 7/10

Here are the latest money market interest rates of the banks that I've been tracking on my blog. Note that these rates are sorted by APY, and represent institutions that I have accounts at, or have otherwise mentioned in my blog:

1.35% Discover Bank Online Savings
1.29% Ally Bank Online Savings
1.10% HSBCAdvance Online Savings
1.10% ING Direct Orange Savings
1.04% Shorebank Direct Online Savings
0.80% Citibank Ultimate Savings
0.65% Western FCU Money Market
0.50% Chase Premier Savings
0.30% E*TRADE Complete Savings
0.15% PayPal Money Market*

NOTES: *The PayPal Money Market fund is NOT FDIC insured.
Rates are believed to be accurate as of 7/15/10. I did not include banks that had special, or introductory rates in the list because they are not ongoing interest rates. I am also not including non-liquid accounts such as CD's in the list.

This month, Discover Bank Online Savings has the highest interest rate of the banks that I'm tracking. So, there is the latest list. Please let me know if you know of any higher interest rates.

DC

Tesla Motors: A Broken IPO

Shares of electric car maker Tesla Motors (Nasdaq: TSLA) began trading last Tuesday, June 29 after the stock's initial public offering (IPO) at $17 per share. Tesla's shares rose 40 percent on their first day of trading, and peaked as high as $30.42 on Wednesday. The hype surrounding a new IPO is usually the main driving force behind a rapid run up such as this one.

However five trading days after its IPO, things seem to be turning around for Tesla Motors. Yesterday, July 6th, Tesla dropped over $3 to close at $16 and change ($16.11 to be specific). This closing price is below its initial $17 offering price. Traders call an IPO that has dropped below its initial offering price a "broken IPO". So, Tesla is now a broken IPO.

On this blog, I have written about buying IPOs before. While getting into an IPO can be a way to make money quickly, I have warned that not all IPOs go up in price. A point that I will again underscore is that buying an IPO can involve significant risk! This is certainly appears to be the case with Telsa.

Disclosure: I do not own any interest in Tesla Motors.

DC

Annual Income and Net Worth

The single most popular post that I've ever written for PFStock is my Net Worth Update post. This post has several tables listing median networth versus age and annual income. I found that most people are searching for hard data that compares how they are doing compared to others, especially those who are the same age with a similar income.

For a while now, I've had an annual income poll in the sidebar of PFStock that asks readers to respond to the question: "How much do you make?" So far there have been 93 responses. In constructing this poll, I deliberately set the income ranges to correspond with the income ranges for the CNN Money website. This table tells you the median net worth for people that fall into each income category. Here are the latest data from the sidebar poll:

CNN Money: Net worth by income and percentage of PFStock readers within each income range.

Annual Income	Median Net Worth	% of PFStock Readers
less than $25k	$1,250	4%
$25k-$49k	$34,375	13%
$50k-$74k	$168,500	9%
$75k-$124k	$301,475	34%
$125k-$149k	$644,100	3%
$150k and higher	$1,122,900	34%

Note that the percentages do not add up to 100% due to rounding. From these statistics, I found it interesting that a large percentage of my readers fall into the higher income categories. Approximately 70% of PFStock readers have an income greater than $75,000 per year. Does anybody want to share their insights on this statement?

Given that I have the median net worth for each income category and the percentage of readers that fall within each category, it would be tempting for me to calculate the "average median net worth for PFStock readers" based on the CNN data. But, what value could such a data point possibly provide? Nevertheless I will throw caution to the wind and and let you know that using an Excel spreadsheet of these data I have calculated that the average median networth for PFStock readers is $532,050.27.

This result corresponds well with the other poll that I have on PFStock: What is your net worth? Again, I was surprised that a large percentage of readers fall within the higher net worth categories, with more than one-half of all readers reporting a networth of more than $500,000. If you haven't already, please participate in the polls in the PFStock sidebar, and I will update the information periodically.

Here are some interesting related posts:

Annual Income Survey (2/10)
How much do you make? (4/09)
Net Worth Update (8/09)
Net Worth Comparison (6/08)
Are You Wealthy? (3/08)
Calculating Net Worth (9/06)

DC

$628.65 Check From E*TRADE Class Action Settlement

The other day, I opened up my mail and was surprised to discover a $628.65 check from a class action settlement. This arose out of allegations that E*TRADE recorded telephone calls without notifying the other party that they are being recorded.

For some background, in September of last year, I received an Email asking if received any telephone calls from E*TRADE during the period from September 3, 2003, to May 22, 2009. If I did then E*TRADE illegally recorded my conversation, and I could be eligible for a settlement of up to $5,000 if I filed a claim with the attorneys for the case of Greenberg v. E*TRADE.

I explicitly remember that I did receive at least one call from E*TRADE in 2007 after I asked for information about certain bonds (Principal Protected Notes) that they were offering to sell. These bonds were described in a post I wrote 3 years ago about New E*TRADE Offerings. For the record, I never did buy the bonds, but a broker called me to explain how the offering works.

Getting back to the class action, I was a little bit skeptical, but I completed the online claim form anyway. It only took a few minutes to fill in. I also remember reading some forum posts where several people expressed their skepticism that this was even a legitimate class action. In this forum, one poster even quipped that consumers might receive only $7.46 after waiting 4 years. Several people on the forum believed that this may be a scam that probably wasn't worth the trouble.

To make a long story short, E*TRADE did settle this case, and paid out $7.5 million. Of that, the lawyers took nearly $2 million, and the rest of the money was divided among the claimants. Based on the payment amount, I speculate there were probably around 10,000 completed claims. Anyway, this is an unexpected windfall for me.

I have also read that only people in California were entitled to the full $628.65. People in other states are supposed to receive one-fifth of that amount or $125.73. So, did anybody else receive a check from this settlement?

DC

Free Flash Drives Received

In the past, I've written about receiving free USB flash drives at various conferences that I've attended. I have been searching the Internet to see if I could also find websites that offer USB flash drives freebies. For reference, a USB (Universal Serial Bus) flash drive is a portable computer memory that plugs into a computer USB port and can be used like a miniature hard disk. Also known as thumb drives, they were once considered a novelty among computer enthusiasts. But nowadays, USB flash drives can often be purchased in many locations, including drug and discount stores.

In my post about fake USB flash drives, I mentioned finding a few websites that claim to offer USB flash drive freebies. But in most cases, the websites were outdated, or that particular offer has expired. I didn't want to send my readers on a wild goose chase, so I haven't published any of those unconfirmed offers.

Now, I am happy to report that I have received a couple of free USB flash drive from legitimate offers. And, I want to share this information with my readers. The first flash drive I received is from MicroCenter. You can get one for signing up for their CENTERewards program. A link to their offer is here:

http://www.microcenter.com/images/at_the_stores/rewards.program/rewards.052709.pdf

This offer is for a 4GB Micro Center Flash Drive or a 4GB SD (SDHC) memory card. Although the form is available online, you have to actually go to a Micro Center store to claim the flash drive. So, that might not work out for everybody. I have received the actual drive, and can confirm that it is of good quality.


When I went to Micro Center to pick up my flash drive, they happened to be out of their own brand of 4Gb flash drives. They substituted this Kingston DataTraveler 4 GB USB Flash Drive instead.

I received my second flash drive by requesting program information from Columbia College. This college offers online course and have several campuses throughout the United States. I requested the flash drive through this link:

http://www.ccis.edu/offices/marketing/landing_pages/more/

It took a long while to receive my flash drive; I requested this drive in March 2010, and received it in June. When I first heard about the offer, I noticed that the page above didn't have any mention of the free flash drive. However, I did receive this Email in early March that confirmed a flash drive would be on its way:

Congratulations on taking the first step toward getting more out of your life! Soon you will receive a USB flash drive that is preloaded with a viewbook detailing what Columbia College offers, including testimonials from current students and alumni. So keep an eye on your mailbox for a package from us.

Then in late May, I got another Email saying:

We just wanted to let you know to keep an eye on your mailbox for the information you requested a few weeks ago from Columbia College. As promised, you’ll be receiving a free USB flash drive that is preloaded with the Columbia College viewbook. We apologize for the delay, but there was an overwhelming response — apparently, you are not alone in your desire to get more out of life.

After about three months, I finally received my drive in early June. In my post, about promotional USB flash drives, I mentioned a type of drive that shows up as two different drives when you plug it into a computer. One of the partitions on the Columbia College flash drive is identified by the computer as a CD ROM drive, and it contains an Autorun script that loads the Columbia college viewbook, which is a PDF file that gives an overview of their programs. The second partition looks and behaves like a regular USB flash drive. The total capacity of the the drive is 2GB.

So, these are two legitimate free USB drive offers. Does anybody else know of any other free USB offers? Can anybody report on the successes (or failures) that they've had?

DC

PFBlogs.org is Down for Maintenance?

I use a website called PFBlogs.org both for reading other personal finance (PF) blogs, and for publishing the PFStock site RSS feed, so that more readers can find my posts. Over the past several days, I've noticed the following message when I have tried to go to that site:

pfblogs.org is down for maintenance.

Has anybody else taken note of the outage? Usually when this happens, the site comes back online within an hour or so. I suspect that it is not really down for maintenance, and that some larger problem exists with the site. I have noticed a less traffic to PFStock these days.

Another larger question that I would like to ask is what other personal finance aggregation sites do people use? I am starting to go into PF Blog withdrawal these days.

DC

Money Market Rates 6/10

Here are the latest money market interest rates of the banks that I've been tracking on my blog. Note that these rates are sorted by APY, and represent institutions that I have accounts at, or have otherwise mentioned in my blog:

1.35% Discover Bank Online Savings
1.29% Ally Bank Online Savings
1.10% HSBCAdvance Online Savings
1.10% ING Direct Orange Savings
1.06% Shorebank Direct Online Savings
0.80% Citibank Ultimate Savings
0.65% Western FCU Money Market
0.50% Chase Plus Savings
0.40% E*TRADE Complete Savings
0.12% PayPal Money Market*

NOTES: *The PayPal Money Market fund is NOT FDIC insured.
Rates are believed to be accurate as of 6/2/10. I did not include banks that had special, or introductory rates in the list because they are not ongoing interest rates. I am also not including non-liquid accounts such as CD's in the list.

Discover Bank Online Savings currently has the highest interest rate of the banks that I'm tracking. Umbrellabank, which was a division of New South Federal Savings Bank was closed by the FDIC in December. The assets were transferred to Beal Bank and I have closed my accounts with them.

So, there is the latest list. Please let me know if you know of any higher interest rates.

DC

Blogroll Update

I have recently cleaned out and updated my Blogroll (Blog List) in the sidebar. Blogs are sorted with the most recently updated blog at the top. I regularly read posts in my blog list, and I like that I can quickly tell which blogs have been recently updated.

I am removing Retiring Early and Finance Puzzle from the Blog list because they appear to be dead blogs. I have also added a "Links" page which is directly below the PFStock header. This page contains blogs that don't have a traditional blogroll. These blogs have been moved to the Links page: Moneymonk, Growing Money, and Saving to Invest. Realm of Prosperity has inexplicably removed its link to PFStock, so I am deleting this blog from my list.

Being listed in the PFStock blog list can be a benefit, especially to new PF bloggers. Once listed on the blog list, your blog will be linked from every page PFStock has published since 2006. That will translate to hundreds of links to your blog.

You can have your blog listed for FREE at PFStock, if you have a bona fide personal finance blog. Please Email me (my contact information is listed in the sidebar) about exchanging links. Since I regularly read posts from blogs in my blog list, this would automatically increase your readership. Note that I do not currently link to commercial, real estate, or multi-level marketing blogs.

Only personal finance blogs that are written by individual bloggers on a not-for-profit basis qualify for a free listing in the blog list. Blogs and websites that do not qualify for a free listing may inquire about the advertising rates offered for PFStock sponsors.

DC

Good Riddance Beal Bank

Several years ago, I opened a checking account at Umbrellabank.com. This online bank offered a checking account with a decent interest, and the bank would reimburse ATM charges if you made a withdrawal from a "foreign" ATM. I later opened a Pot O' Gold Money Market account with them, and eventually had tens of thousands of dollars at Umbrellabank.

Fast forward to December 2009, when Umbrella Bank (a division of New South Federal Savings Bank) was taken over by Beal Bank after being closed by the FDIC. At first, Beal Bank tried to reassure customers that everything was business as usual at the newly acquired bank, stating in a letter to account holders that "Your ATM/debit card will continue to work, and bill paying will work as it has in the past."

Just last month, I received a packet of material from Beal Bank essentially saying that they were eliminating all Umbrella Bank Checking accounts, and that ATM cards, bill payments and checks would no longer be honored as of May 10, 2010. This was the first time I had heard about this change.

So with less than three weeks notice, they sent me scrambling to find other places to put my money. I was especially annoyed because I used Umbrella Bank's online bill payment services. I had to setup another bank account to handle those payments. To make matters worse, it seemed that when Beal Bank eliminated online bill payments, they also eliminated online transfers, making it much harder to get your money out of Beal Bank once the conversion was completed.

Well, to make long story short, I finally got the last of my money out of Beal Bank, and I can now confidently say "Good Riddance!" to Beal Bank.

DC

Book Review: Personal Capital

I was asked to write a review of the book "Personal Capital: Foundational Concepts of Capitalism" by J.L. Eaton. The book is approximately 200 pages, and was self-published by the author through Lulu.com. The text serves as a good introduction to personal finance. In the introduction, Mr. Eaton spells this out, saying "This book is written for those who have recently joined the professional workforce after finishing college and who are just starting out in the respective careers."

The book contains five main sections covering these topics: Basic Economics, Debt, Taxes, Real Estate, and Investments. Drawing upon such works as The Millionaire Next Door by Thomas Stanley and William Danko, the author builds a case for accumulating investment assets and reducing debts. The author covers some of the most basic of economic ideas, such as The Rule of 72.

The author defines the term "Personal Capital" to represent the value of your investment assets minus all debts owed. This roughly corresponds to what most of us would refer to as Net Worth. However, he specifically excludes non-financial assets such as televisions, DVD players, laptops, desktop computers, and the like. Also excluded from Personal Capital is one’s primary residence. In addition to an extensive discussion of real estate, the author devotes a major section to the treatment of taxes. There is a lot of good information here, but one caveat that I can give is that some of the information is dated. The book was recently published (at the end of 2009), but the author often references tax rates and rules for 2008. As we all know, tax regulations are moving targets that change almost every year, so his numbers may not be current.

There is a section about securities that mostly cover bonds, and leaves only a short discussion of stocks. As the writer of a stock investing blog, I had hoped that the author would give a more detailed treatment of stocks. However, I understand that he has a broad topic to cover, and cannot get into every detail. The book is written in the style of a research paper where the author highlights the main points of each topic by drawing upon other writings. He makes generous use of footnotes throughout the book that refer to such texts as The Automatic Millionaire by David Bach, and Warren Buffet’s Letters to Berkshire Hathaway shareholders.

The general financial advice given is solid and straightforward. It should not surprise anybody with a basic understanding of personal finance. Thankfully, there are no get rich quick scams presented in this book. The author does a good job of covering a lot of material within 200 pages. Unlike popular finance authors like Robert Kiyosaki, and David Bach, Mr. Eaton hasn’t trademarked any buzzwords like "The Cashflow Quadrant". So, I don’t get the feeling that he is trying to sell me something else (like another book or audio program) when I’m reading this book.

Overall, I think that the author’s target audience may benefit from this well-written book. You are not likely to find Personal Capital at your local bookstore, but it is available through Amazon.com for $14.99. It can also be purchased as a PDF file download (ebook) from Lulu.com for only $6.

J.L. Eaton lives in Northern Virginia (near Washington DC) with his wife Marci. He maintains the Capitalism Curriculum website.

Money Market Rates 4/10

Here are the latest money market interest rates of the banks that I've been tracking on my blog. Note that these rates are sorted by APY, and represent institutions that I have accounts at, or have otherwise mentioned in my blog:

1.35% Discover Bank Online Savings
1.29% Ally Bank Online Savings
1.10% HSBCAdvance Online Savings
1.10% ING Direct Orange Savings
1.07% Shorebank Direct Online Savings
0.90% Citibank Ultimate Savings
0.65% Western FCU Money Market
0.50% Chase Premier Savings
0.40% E*TRADE Complete Savings
0.06% PayPal Money Market*

NOTES: *The PayPal Money Market fund is NOT FDIC insured.
Rates are believed to be accurate as of 4/8/10. I did not include banks that had special, or introductory rates in the list because they are not ongoing interest rates. I am also not including non-liquid accounts such as CD's in the list.

This month, I have added Discover Bank Online Savings to the list, which currently has the highest interest rate of the banks that I'm tracking. The latest bank casualty in my list of banks is Umbrellabank, which was a division of New South Federal Savings Bank. New South was closed by the FDIC in December, and the assets were transferred to Beal Bank. I will stop tracking the Pot O' Gold Money Market here.

So, there is the latest list. Please let me know if you know of any higher interest rates.

DC

Two Week Free Trial of MarketClub

I hesitate to recommend a product on PFStock unless I feel that it is really worthwhile. MarketClub from INO.com, which I've mentioned before in my post MarketClub Pays for Itself, is one of those exceptional products. Now for a limited time, MarketClub is offering a 2-week free trial. This is a risk-free way to try out the powerful technical analysis tools at MarketClub -- which have earned my personal recommendation.

I don't know how long they will have this free trial offer available, but MarketClub is regularly priced at $449.00 per year. INO.com (pronounced "I know") normally offers a 30-day risk-free period, but they would ordinarily ask for your credit card number upfront. But, if you Click Here you can sign up for the free trial without giving them your credit card information. Even at full price, I feel that MarketClub is worthwhile because I've made much more than the cost of a subscription using their tools.

Anyway, there are 4 powerful trading tools available to MarketClub members that you, as a free trial member, will have access to: Smart Scan, Trade School, Chart Analysis, and Data Central. You also will have access to numerous videos from Adam Hewison, the creator of MarketClub. One other major bonus about this trial is that their, customer support team will be providing unlimited support! You can call or email MarketClub for an instant response to any question, comment or concern.

DC

Should You Invest in Gold?

On this blog, I haven't talked much about investing in gold or in precious metals. With the upward trend of gold prices in the last few years, I have started to consider gold as an investment. But, I've been afraid that I might be a little bit late to the party. To give me more to think about, the folks at INO.com (pronounced "I know") recently sent me an Email with a link to their video about the future of gold prices. I thought that it would be useful to re-post their message here.

Note: The views expressed are those of the original author, and do not necessarily reflect those of PFStock.


Why gold will not make new highs or lows this year
by Adam Hewison, INO.com President

Gold has had some dramatic moves in the last eighteen months and we expect it will have some equally dramatic moves in the future, but not right now.

Click Here to see Adam's 4-minute video about gold.

While I recognize that gold is one of the few commodity markets that people are really passionate about; the purpose of this article is not to take sides either with the gold bugs or those who reject the argument that gold is forever. Rather, I want to discuss my interpretation of the markets cycle.

After spot gold made an all-time high against the dollar on December 2 at $1,226.37, gold has been in retreat mode. For the for the past several months gold has been in a broad trading range, seemingly unable to move one way or another. This process has created frustration from bulls and bears alike.

Here is the dirty little secret about the gold market. It can be a horrible investment and here's why:

Gold first started trading in the 80s while I was on the floor of the Chicago Mercantile Exchange in Chicago as a member of the International Monetary Market, (IMM) which was at that time a division of the CME now the CME Group. When gold opened up the public clamored to buy into the gold futures market and guess who sold it to them? That's right it was the pros- the guys who made their living trading. As a result, gold hit an all-time high of around $850 an ounce back then and it took almost 25 years for gold to move over that level, at least in dollar terms. I don't know what your timeline is, but 25 to 30 years is an awful long time to get even again.

So what is really happening in this market?

Everyone is aware of the problems in Europe with Greece, Portugal and a host of yet to be named countries. We all know that the huge amount of money being printed, coupled with the bank failures abroad contribute to the dollars declining value. These events, in conjunction with the American governments actions, also contribute to the devaluation of the dollar. The government claims that this is beneficial to exports, but the bottom line is that the purchasing power of the American dollar continues to erode in world markets.

Based on the declining value of world currency against gold you might ask- why isn't gold trading at $2,000 or even $3,000 an ounce? What is wrong with this market? This is because a great deal of what goes into the gold market is psychological and reacts to cyclic trends driven by both psychological and economic factors.

So what does all this have to do with the price of gold now? It has everything to do with gold and nothing to do with gold.

Here is what I've been able to observe in the last several years in gold and seems to be holding true. It is something that you should pay attention to if you're interested in the next big move in the gold market.

Before gold can move higher it needs to create what I call an "energy field". The most recent energy fields in gold were between May 12, 2006 and September 20, 2007. This 17 month energy field saw gold prices oscillate between a broad trading range bound by $730.08 (upside) and $541.80 (downside). That energy field produced enough power to propel gold to the new high of $1,012.40 on March 17, 2008. This marked the first time gold exceeded, in dollar terms, the highs set in the early 80s mentioned earlier.

The energy fields I have observed for gold are taking somewhere between 17 and 18 months to complete. If the energy field holds, then the December 3rd 2009 high of $1,226.37 should remain in place for quite some time. If the same cycle remains true then the recent lows that we witnessed, at $1,050, should also remain intact as they represent the 15 to 16 month cycle low.

With the lows in place the next question becomes when is the next cyclical high in gold? Based on the existing cycle, we can expect the next major gold high in 2011.

To summarize: I expect gold to be locked in a broad trading range for the next 12 months bounded by the December 09 highs of 1,226.37 and the lows of $1,050.00. If the gold cycle holds true, we expect that gold tops the $1,226.37 marker by April or May of 2011.

On the upside we will also be looking for gold to make a nature cyclic high in October or November of 2011. It's impossible to predict the future with any degree of accuracy; however when we look at the cycles in gold this reads as a pretty good bet.

No matter what happens we expect gold will offer some great trading opportunities that investors and traders should be able to take advantage of.

Listen to Adam's technical analysis of the gold chart.

As I always discuss- in trading one should approach gold or any other market with a game plan and proper money management stops. The key to success in this decade will be an investors willingness to move in and out of asset classes such as gold and be well diversified into more than one asset class. That way you wont be left holding the bag for the next 25 years. Our World Commodity Portfolio is a good example of this approach and one I believe will serve investors well in the coming years.

--
Adam Hewison is the Co-creator of MarketClub. For a limited time, MarketClub is offering a 2-week free trial. This is a risk-free way to try out the powerful technical analysis tools at MarketClub -- which have earned my personal recommendation. For more information, see my post MarketClub Pays for Itself.

DC