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Nearly every man who develops an idea works it up to the point where it looks impossible, and then he gets discouraged. That's not the place to become discouraged.
Thomas Edison Categories
Monthly Archives: March 2009
Municipal Bonds—An Investment for Hard Times
It seems that most election years there is a proposal from a state or local government to approve a bond to fund a public project such as a new school, open space, or another investment in the public infrastructure. You know you can vote for some of these debt securities, but did you know they are also available for public purchase? They are municipal bonds (also known as “munis”).
Municipal bonds work like other fixed-income products, such as CDs and corporate bonds. Buyers loan the issuer, in this case a municipality, some amount of money to fund a public project. The bond buyer is paid some percentage (the coupon) of the bond’s face amount while the bond remains outstanding. At the end of the holding period, the face amount is Read More
Investing Basics: Portfolio Diversification
An important way to reduce the risk of investing is to diversify your investments. Diversification is akin to “not putting all your eggs in one basket.” For example, if your portfolio only consisted of stocks of technology companies, it would likely face a substantial loss in value if a major event adversely affected the technology industry.
There are different ways to diversify such a portfolio:
*You could invest in the stocks of companies belonging to other industry groups.
*You can allocate your portfolio among different categories of stocks, such as growth, value, or income stocks.
*You may include bonds and cash investments in your asset-allocation decisions (potential bond categories include government, agency, municipal, and corporate bonds).
*You might also diversify by investing in foreign stocks and bonds. Read More
Keystone is Health—Retirement: Part 1 of 6
Even for those who enjoy working, thinking about retirement can be seductive. But understanding how to make the dream a reality can be daunting even at the best of times. And when the airwaves are full of sobering news about the economy, sometimes retirement starts to seem like an unattainable fantasy.
Paul Hansen, senior vice president of finance and profitability at Zions Bank, offers some practical advice about turning your retirement dream into reality. Read More
Investing Basics: Bonds
Investing in bonds offers more protection than stocks. In the event a company defaults on its bonds or goes bankrupt, bond investors get repaid ahead of shareholders. This lower risk is a big reason that the investment rates of return on bonds are significantly lower than they are on stocks.
Bonds are also called fixed income securities because they pay interest that is fixed at a coupon rate. (Although there are bonds whose coupon rates are variable, most bonds have a fixed rate.) As a result, the amount of interest income is fixed over the term of the bond. For bond investors, who are generally more conservative than stock investors, these predictable cash flows allow them to sleep at night. Read More
Investing Basics: Budgets
Many of us fail to see the relationship between budgeting and saving. Budgeting is a process that starts by setting spending targets that help you to stay within your means. A personal budget is useful in controlling personal expenses.
Reasons for having a personal budget usually change over time. In our 20s, we focus on repaying debts or saving for a down payment on a home. We may want to budget in order to set aside several thousand dollars for a trip around the world. In our 30s and 40s, budgeting is important to help pay for our children’s living and college expenses. By the time we enter our 50s, saving for retirement becomes a major financial goal. Read More
Economist Survey
The latest survey of 47 national economists (including yours truly) by the National Association for Business Economics was conducted in recent weeks and formally released on Monday, February 23. As one might expect, it was not pretty.
The consensus view has deteriorated sharply when compared to prior forecasts, which are conducted three times annually. “The steady drumbeat of weak economic and financial market data have made business economists decidedly more pessimistic on the economic outlook for the next several quarters,” noted Chris Varvares, the current president of the group. “While a few reports offer some glimmer of hope, a meaningful recovery is not expected to take hold until next year.” Read More
