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Exchange-Traded Funds: What You Need to Know
From Gold to Bitcoin: What You Should Know When Considering Alternative Investments
Organizing Your Financial Records for the New Year: 12 Resources to Keep Your Financial Goals on Track
Alliance for Investor Education Elects New Officers
10 Best Resources on the Web: Diversify Your Portfolio to Manage Risk and Maximize Return
AIE Identifies 10 Top Saving and Investing Resource Materials in Spanish

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HOW TO AVOID TARNISHING YOUR PORTFOLIO
12/19/2014

The Financial Industry Regulatory Authority (FINRA) has issued a new Investor Alert entitled "Physical Precious Metals: Tips to Avoid Tarnishing Your Portfolio." The Alert warns investors of the risks involved with investing in physical precious metals such as silver, gold, palladium or platinum. Enforcement actions by the Commodity Futures Trading Commission (CFTC) and court decisions paint an ugly picture of sellers who charge high commissions and fees but ultimately fail to purchase or deliver the physical assets as promised. While precious metals can play a helpful role in building a diversified portfolio, some investments are more fraught with risk than others. FINRA's new Alert includes five tips to help the investing public avoid problems ... HIGHLIGHTED EVENT: Are you an investor looking for an opportunity to learn from the best and brightest in the investing world? Attend the AAII 2015 Investor Conference ...

PONDERING AN ANNUITY? A FEW THINGS TO CONSIDER
12/12/2014

The CFA Institute's Lars Kroijers offers his thoughts on annuities: Annuities are an important and sometimes dominant part of an investment portfolio for millions of savers. Although in certain instances there is a requirement for pension plan participants to put a part of their pension savings into an annuity, others decide to invest in them because they find great comfort in having a secured cash flow until they die (some annuities continue payments for dependents). There is great intangible value in knowing that you are going to be okay in your old age, regardless of how old you get. If you have an annuity that is adjusted for inflation, you have a very good picture of your spending power in retirement without worrying about the oscillations of the markets or dying with a lot of money that you may have no use for. However, remember that a lot can change between now and retirement ... HIGHLIGHTED EVENT: Are you a new investor with limited knowledge about options? Attend an Options Industry Council (OIC) Investor Education Seminar near you ...

4 STEPS TO BETTER SECURE YOUR RETIREMENT INCOME
12/5/2014

The CFP Board's John Hauserman offers his advice to improve your retirement income planning. What's so hard about retirement income planning? After all, you just pick an investment and put a check in the done box, right? Sadly, history tells us that those who take such an oversimplified approach to this important phase of their lives may be doomed to bounce fecklessly from one strategy to the next, never fully realizing any of the potential benefits. Worse yet, such a strategy may even jeopardize one's long-term retirement goals. More appropriate would be a more comprehensive strategy, taking these four steps into consideration. Ensuring you will have enough income in retirement requires careful planning. Get out of that "set it and forget it" mentality and put a plan in place that takes your whole financial situation – current and projected – into consideration...HIGHLIGHTED EVENT: Are you a new investor looking to boost your knowledge and network with industry experts and leaders? Attend FINRA's annual conference ...

SMARTCHECK YOUR FINANCES
11/21/2014

The U.S. Commodity Futures Trading Commission (CFTC) recently launched CFTC SmartCheck, a new national campaign to help investors identify and protect themselves against financial fraud. The comprehensive campaign includes a new website, a national advertising campaign and interactive videos that will help investors spot investment offers that are potentially fraudulent. The new website is an educational tool that helps investors conduct background checks of financial professionals. "The CFTC is committed to protecting investors from fraud, and we demonstrate that commitment today with the launch of CFTC SmartCheck," said CFTC Chairman Tim Massad. Over the coming months, the CFTC SmartCheck campaign will include online, television, and print advertising slated to run nationwide and additional outreach efforts with organizations aligned with the CFTC's mission to reduce financial and investment fraud. ...HIGHLIGHTED EVENT: Are you an investor looking for an opportunity to learn from the best and brightest in the investing world? Attend the AAII 2015 Investor Conference ...

INVESTOR ALERT: DON'T PUT YOUR NEST EGG IN A "SHELL"
11/14/2014

FINRA and the SEC's Office of Investor Education and Advocacy recently issued an alert to warn investors that some low-priced "penny" stocks that are aggressively promoted may in fact be stocks of dormant shell companies. FINRA and the SEC continue to be concerned about pump-and-dump schemes in which a fraudster deliberately buys shares of a very low-priced, thinly traded stock and then spreads false or misleading information to pump up the stock's price. The fraudster then dumps his shares, causing the price to fall, leaving investors with worthless or nearly worthless shares of stock. A shell company is often used in these types of scams. These dormant shell companies may be on the brink of insolvency or even bankrupt. Dormant shell companies often have no officers or management. As the name implies, these companies are simply shells... HIGHLIGHTED EVENT: Are you a new investor looking to boost your knowledge and network with industry experts and leaders? Attend FINRA's annual conference ...

PHISHING SCAM WARNING FROM SIPC
11/7/2014

The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund mandated by Congress to protect the customers of insolvent brokerage firms, issued a warning to consumers not to share personal information with websites for fictitious organizations that claim to restore funds to investors involved with a brokerage firm in liquidation. Some of the Web sites may pose as SIPC and others posed as organizations with SIPC-like powers. SIPC is currently aware of two such websites, which are falsely claiming to be customer protection entities. These ongoing financial scams involve con artists falsely claiming to be a SIPC-like customer protection entity to trick victims, including non-U.S. investors, into giving the fraudsters access to brokerage accounts and sharing personally identifiable information... HIGHLIGHTED EVENT: Are you a new investor with limited knowledge about options? Attend an Options Industry Council (OIC) Investor Education Seminar near you ...

40 WAYS TO LEAD YOUR BROKER: BUY OR SELL?
10/31/2014

Placing an order to trade a security is as simple as telling your broker to buy or sell. But the type of order you place impacts transaction costs and the odds of having the order completed or filled. Depending on your broker, your order can be routed to more than 40 different execution venues where trades occur, and prices between those venues can change very quickly. Therefore, it is important to understand the exact instructions you are giving to your broker. This article from the American Association of Individual Investors (AAII) reviews the various types of order instructions. Though AAII uses stocks as an example, the information also applies to exchange-traded funds (ETFs) and closed-end funds (CEFs)... HIGHLIGHTED EVENT: Are you a new investor looking to boost your knowledge and network with industry experts and leaders? Attend FINRA's annual conference ...

IS AN IRA ROLLOVER RIGHT FOR YOU?
10/24/2014

The largest source of IRA contributions comes from individuals who move their money from their employer-sponsored retirement plans such as 401(k) and 403(b) plans when they leave a job, according to the Employee Benefit Research Institute. If you are considering rolling over money from an employer plan into an IRA-or if you have been in contact with a financial professional to do so-the Financial Industry Regulatory Authority (FINRA) has some tips to help you decide whether an IRA rollover is right for you ... HIGHLIGHTED EVENT: Are you a new investor with limited knowledge about options? Attend an Options Industry Council (OIC) Investor Education Seminar near you ...

STARTING A NEST EGG FROM SCRATCH
10/17/2014

CFP Board expert John Hauserman has some advice for those starting a retirement plan from scratch: Whether you are young and getting an early start or a bit older and trying to play catch-up, starting a retirement plan from scratch can present some unique challenges. While the ultimate prescription for success may change depending on age, the process itself does not change. Step one is to take an inventory of your finances. While this would certainly include any assets that you might have already accumulated - like savings, investments or a work-sponsored retirement plan - it should also include several other key components. However, simply taking an inventory is not enough to create a viable retirement plan, since success or failure will depend largely on your future cash flow and what you choose to do with it. One of the most important aspects of budgeting is honesty - honestly with yourself and honestly with your adviser, if you are using one... HIGHLIGHTED EVENT: Are you a new investor with limited knowledge about options? Attend an Options Industry Council (OIC) Investor Education Seminar near you...

10 RIGHTS EVERY INVESTOR SHOULD KNOW
10/10/2014

The "Statement of Investor Rights" was developed by CFA Institute to advise buyers of financial service products of the conduct they are entitled to expect from financial service providers. These rights reflect the fundamental ethical principles that are critical to achieving confidence and trust in any professional relationship. The list applies to financial products and services such as investment management, research and advice, personal banking, insurance and real estate. Whether you are establishing an investment plan, working with a broker, opening a bank account or buying a home, the Statement of Investor Rights is a tool to help you get the information you need and the service you expect and deserve. Demanding that financial professionals abide by these rights helps you build trust in the person and/or firm you engage with, and thereby collectively restore trust, respect, and integrity in finance... HIGHLIGHTED EVENT: Are you a new investor looking to boost your knowledge and network with industry experts and leaders? Attend FINRA's annual conference...

WHAT YOU NEED TO KNOW ABOUT IPOs
10/03/2014

The SEC's Office of Investor Education and Advocacy recently issued an investor bulletin informing investors about the basics of IPOs. Many investors were eager to strike on the recent high-profile IPOs like Facebook and Twitter but the SEC is offering this investor tool to help educate novice investors about what they may not know about IPOs. An IPO is a significant milestone for a company, and high-profile IPOs frequently include companies that have exhibited recent tremendous growth and development. However, companies at different stages of development engage in IPOs for various reasons. Often, a company is seeking to access the capital markets in order to fund future growth and expansion. In other instances, a large and mature business may be returning to the public market after a successful reorganization under bankruptcy. It is important to keep in mind that an IPO does not always represent an opportunity to invest at an early stage with a fast-growing company... HIGHLIGHTED EVENT: Are you a new investor with limited knowledge about options? Attend an Options Industry Council (OIC) Investor Education Seminar near you ...

RETIREMENT: HOW MUCH SHOULD YOU BE SAVING?
9/12/2014

According to AAII, the amount you should be saving for retirement depends on a variety of factors. Saving 15% of income for retirement is a common rule of a thumb. The actual number depends on the amount of replacement income needed, when the worker starts saving for retirement and when he or she plans to retire. The Center for Retirement Research says low-income households should save 11%, while high-income households should save 16%. The rates include an employer match to retirement savings. Built into these savings rates is a 4% real (inflation-adjusted) return and the assumption of an inflation-indexed annuity being purchased at retirement. Age and retirement dates also play big roles. Workers who start saving in their mid-30s can get away with setting aside about 6% of their income if they plan to work until age 70. The targeted savings rate jumps to 24% if retirement at age 62 is desired instead. In contrast, a 45-year old person would need to save 10% to retire at age 70 and 44% to retire at age 62... HIGHLIGHTED EVENT: Interested in looking at the key public policy issues facing investors? Attend the North American Securities Administrators Association's (NASAA) 97th Annual Conference ...

NEVER TOO LATE TO START A NEST EGG
9/5/2014

The CFP Board's John Hauserman offers his advice on how to jumpstart your retirement fund. Whether behind on savings due to divorce, a business setback, or just getting a late start, an investor can usually take certain steps to get back on track. While each situation is different and may require a customized approach, the following steps provide big-picture guidance. Always begin with a comprehensive financial/retirement plan. The process of building the plan will force you to do important homework, including the gathering of investment account details, setting goals and defining the assumptions that will be used in making any type of projection. Whenever possible, investors seeking to get a jump on retirement savings should consider using either company sponsored or individual retirement plans. The obvious advantage of a retirement plan is that, in most cases, the investment is made using pre-tax money. In other words, Uncle Sam is helping you save... HIGHLIGHTED EVENT: Are you an investor looking to uncover opportunities and manage portfolio risks in a changing investment landscape? Attend the CFA Institute's 2014 Financial Analysts Seminar ...

TWEETS FROM CHEATS: PHONY STOCK TIP WARNING
8/29/2014

The SEC's Office of Investor Education and Advocacy recently issued an investor bulletin to warn investors of the risks associated with using social media for stock tips. Social media and the Internet in general have become important tools for investors. Investors may use social media to research particular stocks, look up background information on a broker-dealer or investment adviser, find guidance on investing strategies, receive up-to-date news, and discuss the markets with others. While social media can provide many benefits for investors, it also presents opportunities for fraudsters. Through social media, fraudsters can spread false or misleading information about a stock to large numbers of people with minimum effort and at a relatively low cost. They can also conceal their true identities by acting anonymously or even impersonating credible sources of market information... HIGHLIGHTED EVENT: Interested in looking at the key public policy issues facing investors? Attend the North American Securities Administrators Association's (NASAA) 97th Annual Conference ...

WORRIED ABOUT RETIREMENT? 401(k) PLANS WORK
8/22/2014

According to ICI, 401(k) plans work in a balanced approach to retirement security. Though the future is never entirely predictable, there's ample data to show how our country's retirement system is working today, and how it's building resources for the decades ahead. In particular, researchers are studying how the increasing use of 401(k) and other defined contribution plans has affected Americans' preparedness for retirement. The answer, according to a growing body of research: taken as part of a broader retirement system, 401(k)s work for working Americans. Retirees do face legitimate risks—but the decline of private-sector defined benefit (DB) plans and the rise of defined contribution (DC) plans, such as 401(k) plans, isn't one of them. This shift isn't unlikely to reduce retirement preparedness... HIGHLIGHTED EVENT: Are you a financial stakeholder interested in financial literacy and education? Attend the SFE&PD's Seventh Annual Financial Literacy Leadership Conference ...

QUARANTINE YOUR PORTFOLIO: VIRAL DISEASE SCAMS
8/15/2014

FINRA recently issued an investor alert warning investors about viral disease stock scams. If history is a guide, dramatic news coverage of viral outbreaks, including Ebola and Middle East Respiratory Syndrome (MERS), will likely catch the interest of stock scammers looking to capitalize on fears of a potential pandemic. Don't fall for the hype. FINRA is issuing this Alert to warn investors to be wary of promotions touting stocks that claim to protect against the spread of viruses or other harmful diseases. Aggressive stock promotional tactics may signal a potentially fraudulent scheme. FINRA is aware of several potential investment scams involving companies that claim to be involved in the development of products that will prevent the spread of viral diseases. The fraudsters appear to employ a typical "pump and dump" scheme... HIGHLIGHTED EVENT: Are you an investor looking to uncover opportunities and manage portfolio risks in a changing investment landscape? Attend the CFA Institute's 2014 Financial Analysts Seminar ...

UNREGISTERED SECURITY? LOOK BEFORE LEAPING
8/8/2014

The SEC's Office of Investor Education and Advocacy is issuing this Investor Alert to help investors identify potentially fraudulent unregistered offerings. Under the federal securities laws, a company may not offer or sell securities unless the offering has been registered with the SEC or an exemption to registration is available. If the offering is not registered, it is often called a private placement or unregistered offering. Generally speaking, unregistered offerings are not subject to some of the laws and regulations that are designed to protect investors, such as disclosure requirements that apply to registered offerings. If you are presented with an opportunity to invest in an unregistered offering, in addition to thoroughly researching an investment-and the investment professional selling it-you should be on the lookout for these common signs of potential fraud when you are thinking about investing in an unregistered offering... HIGHLIGHTED EVENT: Interested in looking at the key public policy issues facing investors? Attend the North American Securities Administrators Association's (NASAA) 97th Annual Conference ...

PROTECTING OLDER INVESTORS FROM FINANCIAL FRAUD
8/1/2014

Nine out of 10 practicing attorneys surveyed by the Investor Protection Trust (IPT), the Investor Protection Institute (IPI), and the American Bar Association (ABA) are willing to take part in a new campaign to address the estimated 20 percent of older Americans who have been the victims of investment fraud and financial exploitation. In releasing the survey findings, the three groups announced that they are launching the Elder Investment Fraud and Financial Exploitation (EIFFE) Prevention Program Legal. The EIFFE Prevention Program Legal will develop, test, and implement a model national continuing legal education (CLE) program to teach lawyers to: (1) recognize clients' possible vulnerability to EIFFE due to mild cognitive impairment (MCI); (2) identify EIFFE in their clients; and (3) report suspected instances of EIFFE to appropriate authorities... HIGHLIGHTED EVENT: Are you a financial stakeholder interested in financial literacy and education? Attend the SFE&PD's Seventh Annual Financial Literacy Leadership Conference ...

NEW INVESTOR? TOOLS TO REACH YOUR FINANCIAL GOALS
7/25/2014

FINRA offers an amazing tool for potential new investors. Most people invest to achieve specific financial goals. Some of these goals are widely shared. For example, many people want to own their own home and send their children or grandchildren to college. And there's an almost universal desire to retire comfortably, with the reasonable expectation that you will have adequate income for as long as you need it. Before undertaking any investment program, though, it is critical that you assess your current situation and form goals. You'll need to take an accurate measurement of your finances to determine how much you can invest reasonably. Then you'll need to ask yourself a few key questions: What are your goals and what will they cost? When do you want to achieve each goal? ... HIGHLIGHTED EVENT: Are you an investor looking to uncover opportunities and manage portfolio risks in a changing investment landscape? Attend the CFA Institute's 2014 Financial Analysts Seminar ...

MICROCAP STOCKS: ALL THAT GLITTERS IS NOT GOLD
7/18/2014

The SEC's Office of Investor Education and Advocacy recently issued an investor bulletin to help educate investors about the risks associated with microcap stocks. Information is the investor's best tool when it comes to investing wisely. It may be difficult to find accurate information about microcap stocks (i.e., low-priced stocks issued by the smallest of companies), including penny stocks (i.e., the very lowest priced stocks). Many microcap companies do not file financial reports with the SEC, so it can be hard for investors to get the facts about the company's management, products, services, and finances. When publicly-available information is scarce, fraudsters can easily spread false information about microcap companies, making profits for themselves while creating losses for unsuspecting investors... HIGHLIGHTED EVENT: Interested in looking at the key public policy issues facing investors? Attend the North American Securities Administrators Association's (NASAA) 97th Annual Conference ...

4 PILLARS OF FINANCIAL STABILITY
7/11/2014

According to the CFP Board's Elaine King, there are four elements to achieving "healthy" finances. Financial security is relevant to all families. Knowing that you have the resources to cover all your needs alleviates stress and allows you to make significant decisions about what you want for your future and that of your family. The concept that we commonly associate with financial security is saving: saving is important to achieve greater benefits, but in itself does not guarantee stability. To make your money grow and have what you need, not only now but in the future (when you want to retire, or when it's time for children in your family to go to college), it is important to balance four factors: planning, saving, investment and protection. These four elements are basic to the growth of your resources, so you can get the most benefit from the fruits of your labor... HIGHLIGHTED EVENT: Are you a financial stakeholder interested in financial literacy and education? Attend the SFE&PD's Seventh Annual Financial Literacy Leadership Conference ...

WANT TO BOOST YOUR RETURN? GET SMART
6/27/2014

According to the American Association of Individual Investors, there is positive correlation between the level of investor knowledge and portfolio returns. Investing knowledge enhances risk-adjusted returns by at least 1.3 percentage points annually. Over a 30-year investment span, the improved portfolio performance leads to 25% greater wealth. This was the finding of a study, possibly for the first time, linking results from a test of financial knowledge to actual portfolio performance. The researchers believe their conclusion may understate the actual return differential. A key driver of the return differential is a willingness to invest in stocks. The most knowledgeable investors had a 66% allocation to stocks, whereas the least knowledgeable held about 49% of their retirement assets in stocks. The larger stock allocation did lead to more volatility, but also higher risk-adjusted performance... HIGHLIGHTED EVENT: Are you an investor looking to uncover opportunities and manage portfolio risks in a changing investment landscape? Attend the CFA Institute's 2014 Financial Analysts Seminar ...

TIME TO SELL? BETTER TO BE EARLY THAN LATE
6/20/2014

The CFA Institute's A. Michael Lipper's latest blog post delves into the age old question: When is the right time to sell? The vast majority of investment literature for professionals is about smart buying. Most professional investors pride themselves on their timing of purchases and thus focus on current conditions. While nothing in the art form of investing is easy, buying correctly is much easier than selling. There is unfortunately little difference between selling too soon and being considered wrong. But anyone who has experienced the emotional trial of selling into a declining market has learned that it is even more difficult. All too often, what appears to be a market break is a hesitation in a continuing bull market... HIGHLIGHTED EVENT: Interested in looking at the key public policy issues facing investors? Attend the North American Securities Administrators Association's (NASAA) 97th Annual Conference ...

BANK SWEEP PROGRAMS: DON'T GET LEFT IN THE DUST
6/13/2014

The SEC's Office of Investor Education and Advocacy recently issued an investor bulletin to help educate investors about bank sweep programs, which some broker-dealers offer to their customers as a way to manage cash in their brokerage accounts. The investor bulletin describes some of the potential risks associated with bank sweep programs and suggests questions investors may want to consider asking their broker-dealer to help investors decide how to best manage the cash in their brokerage account. Broker-dealers may offer investors several options for managing your cash. One option, a bank sweep program, typically involves the automatic transfer (or "sweep") of cash in the brokerage account into a deposit account at a bank that may or may not be affiliated with the broker-dealer... HIGHLIGHTED EVENT: Are you a financial stakeholder interested in financial literacy and education? Attend the SFE&PD's Seventh Annual Financial Literacy Leadership Conference ...

AVOID THESE COMMON FINANCIAL PLANNING MISTAKES
6/6/2014

Becoming wealthy doesn't require buying a winning lottery ticket or figuring out which tech start-up will be the next Apple. For most of us, wealth is built slowly and far less spectacularly. It requires some pretty basic financial blocking and tackling: setting achievable goals, living below one's means, putting aside regular savings, and protecting assets and resources you cannot afford to lose. It also requires avoiding mistakes. Small missteps can have big, negative impacts on one's wealth. In her most recent blog post, the CFP Board's Eleanor Blayney offers her nine most common mistakes investors should avoid... HIGHLIGHTED EVENT: Are you an investor looking to uncover opportunities and manage portfolio risks in a changing investment landscape? Attend the CFA Institute's 2014 Financial Analysts Seminar ...

CONSIDERING HIGH-YIELD CDs? BEWARE OF RED FLAGS
5/30/2014

FINRA recently issued an investor alert warning investors about certificates of deposit (CDs) that may be too good to be true. The investor alert called High-Yield CDs: Red Flags That Signal a Scam warns investors to be wary of promotions touting CDs that promise interest rates that are substantially higher than current averages. In one instance of suspected email fraud, the pitch appeared to come from a large U.S. bank that supposedly was promoting a CD offered by an international banking partner. At a time when most CDs at U.S. banks and credit unions were offering just over 1 percent for a comparable term, this pitch offered a CD with a 15 percent yield, and contained instructions on how to wire funds ... HIGHLIGHTED EVENT: Are you a financial stakeholder interested in financial literacy and education? Attend the SFE&PD's Seventh Annual Financial Literacy Leadership Conference ...

SECRET TO SUCCESSFUL INVESTING: THE 3 POCKETS APPROACH
5/16/2014

According to the American Association of Individual Investors's Timothy McCarthy, the secret to successful investing relies in the "Three Pockets Approach". Actually, it's no secret; many investors have heard it already. The problem is that too many investors still do not practice it. Simply put, if you invest over a period of time, properly diversify across a variety of asset classes and leave the portfolio relatively stable, it will undoubtedly grow at a greater rate than by leaving it in the bank, but with much less risk than trading. Using the Three Pockets approach to allocating and managing your money before and after retirement can be quite useful. From a risk management standpoint, you can feel comfortable that irrespective of what the world throws at you in the coming years, your money will ultimately grow. And at the same time, you have built in enough flexibility to follow your unique dreams in a reasonable fashion... HIGHLIGHTED EVENT: Are you a new investor with limited knowledge about options? Attend an Options Industry Council (OIC) Investor Education Seminar near you ...

PLANNING FOR RETIREMENT? ESSENTIAL TOOLS TO REACH YOUR GOALS
5/9/2014

The CFA Institute, through its 'Future of Finance' project, recently made available their consumer facing resource, "Essentials of a More Secure Retirement". The online resource outlines some of the common principles and best practices related to retirement planning. From the basics about getting started on a savings program to details on preferred investment products, the CFA institute has provided a comprehensive resource for all retirement-focused investors. The online resource, which is key component to The Future of Finance project, is part of a global effort to shape a trustworthy, forward-thinking financial industry that better serves society. If you are an investor worried about saving for retirement, this resource is the perfect tool to get you on track to reach your retirement goals... HIGHLIGHTED EVENT: Are you a financial stakeholder interested in financial literacy and education? Attend the SFE&PD's Seventh Annual Financial Literacy Leadership Conference ...

VIRTUAL CURRENCY INVESTOR? UNDERSTANDING RISK IN YOUR E-WALLET
5/2/2014

The North American Securities Administrators Association (NASAA) recently issued an investor advisory to cautioning investors to consider the risks associated with virtual currencies. "Unlike traditional currency, these alternatives typically are not backed by tangible assets, are not issued by a governmental authority and are subject to little or no regulation," said Andrea Seidt, NASAA President and Ohio Securities Commissioner. "Investors should be aware that investments that incorporate virtual currency present very real risks." Virtual currency is an electronic medium of exchange that can be bought or sold through virtual currency exchanges and used to purchase goods or services where accepted. These currencies are stored in an electronic wallet, also known as an e-Wallet, which is a digital system that allows payments online via a computer or mobile device such as a smartphone ... HIGHLIGHTED EVENT: Interested in attending one of the investment industries largest and longest running educational gatherings of investment professionals? Attend the CFA Institute's 67th Annual Conference ...

ONLINE INVESTOR? PROTECT YOUR SOCIAL MEDIA ACCOUNTS TO AVOID PHISHING
4/18/2014

The SEC's Office of Investor Education and Advocacy recently issued an investor bulletin warning online investors of potential scams via social media. The Internet has made our lives easier in so many ways. However, you need to know how you can protect your privacy and avoid fraud. Remember, not only can people be defrauded when using the Internet for investing; the fraudsters use information online to send bogus materials, solicit or phish. Phishing is the attempt to obtain financial or confidential information from Internet users. This phishing expedition usually begins with an email that looks as if it is from a legitimate source, often a financial institution. The email contains a link to a fake website that looks like the real site. Fraudsters want you to provide account and password information, and then they have access to your account... HIGHLIGHTED EVENT: Are you a financial stakeholder interested in financial literacy and education? Attend the SFE&PD's Seventh Annual Financial Literacy Leadership Conference ...

INVESTOR HAPPINESS: UP WHEN DOWN, DOWN WHEN UP?
4/11/2014

According to the CFA Institute's David L. Allison, for many investors, the biggest challenge of success is keeping quiet about it. With the bull market recently celebrating its five-year anniversary, you probably know someone who is gloating over the investment gains they experienced by speculating in some dark corner of the stock market. As a study published in January titled "Investor Happiness" suggests, extreme stock market outcomes can make investors react to their portfolio returns in unanticipated ways. The study showed that in extreme up markets, investors unexpectedly found higher portfolio returns disappointing, whereas in extreme down markets, investors unexpectedly found lower portfolio returns acceptable. These findings support the notion that relative returns (your investment returns relative to your peers or the market) likely play an underestimated role in how satisfied you are with the progress of your investments... HIGHLIGHTED EVENT: Are you a new investor with limited knowledge about options? Attend an Options Industry Council (OIC) Investor Education Seminar
near you ...

INVESTOR GUIDE: HOW TO INVEST WISELY AND AVOID FRAUD
4/4/2014

The Texas State Securities Board, a member of the NASAA, released its newly updated flagship publication, the Texas Investor Guide, which was funded by a grant from the Investor Protection Trust and written to provide investors with unbiased, straightforward information to help navigate an increasingly complex financial marketplace. Investors will also learn the tools they need to investigate financial professionals and avoid fraud. As the Introduction to the Investor Guide says, "Investors have more responsibility than ever for achieving their financial goals." Yet whether it's investing for retirement or other financial goals, many investors lack essential knowledge about the principles of investing, the role of stocks and bonds, the stock market, and the value of diversifying one's assets. Nor do investors consider how badly investment fees damage their returns... HIGHLIGHTED EVENT: Interested in attending one of the investment industries largest and longest running educational gatherings of investment professionals? Attend the CFA Institute's 67th Annual Conference ...

UNDERSTANDING NEST EGG KILLERS: INFLATION AND LONGEVITY
3/28/2014

Are you a retiree wondering whether you should be making changes to your investment portfolio and what those changes should be? If so, the new installment of the CFP Board's Eleanor Blayney looking at the role of risk in the retirement portfolio is for you. Most retirees think that stock market drops are their greatest enemy. However, time has proven to be an effective antidote to market slides. But time can work as a double agent: what it may give back in investment returns, it snatches away in other more devious ways. The two risks that should be given primary importance by a retiree in his investment decision-making are inflation and longevity ... HIGHLIGHTED EVENT: Want to learn how you can outsmart fraudsters and protect your money? Attend NFA's seminar on April 10 ...

SUCCESSFUL INVESTING: MORE THAN RANKINGS
3/21/2014

According to the CFA Institute's A. Michael Lipper, investors shouldn't confuse performance ranking with successful investing. One should invest as a process to produce income and capital to meet a spending goal. The real measure of successful investing, however, is how the investor feels about the result. Feeling good about the result is an unwritten, but very important, psychological goal. Investing is both an art form and a competitive sport. The art form attempts to use, within constraints, creativity to produce periodic investment results. Too often these are expressed in terms of the latest quarter, latest 12 months, 5 years, and 10+ years since inception.... HIGHLIGHTED EVENT: Are you a new investor with limited knowledge about options? Attend an Options Industry Council (OIC) Investor Education Seminar near you ...

BITCOIN: MORE THAN A BIT RISKY
3/14/2014

The Financial Industry Regulatory Authority (FINRA) issued a new investor alert called Bitcoin: More than a Bit Risky to caution investors that buying and using digital currency such as Bitcoin carry risks. While speculative trading in bitcoins carries significant risk, there is also the risk of fraud related to companies claiming to offer Bitcoin payment platforms and other Bitcoin-related products and services. FINRA's Investor Alert adds to a growing chorus of Bitcoin-related warnings from other regulators. The threat of Bitcoin-related fraud is a real danger for investors looking to make a quick profit from Bitcoin. In addition to warning of the dangers of Bitcoin-related scams and speculation, Bitcoin: More than a Bit Risky provides the investing public with a brief description of how Bitcoin works and discusses many of the risks associated with buying and selling Bitcoin ... HIGHLIGHTED EVENT: Are you a new investor with limited knowledge about options? Attend an Options Industry Council (OIC) Investor Education Seminar near you ...

THE MAGIC OF COMPOUND INTEREST
3/7/2014

New investors learn that compound interest can make a huge difference in retirement savings in the National Endowment for Financial Education's (NEFE) free investor resource: On Your Own. Compound interest, what Albert Einstein considered the 'most powerful force in the universe', means that putting aside a little bit of cash when you are young could make you a big chunk of change in the long run. With compound interest, you earn interest on the principal amount that you invest. And you also earn interest on the interest that your investment accumulates. That means that if you start with a principal amount of $1,000 in an account with a compounding interest rate of 8%, and you invest an additional $50 every month, after 15 years you will accumulate $19,463.44... HIGHLIGHTED EVENT: Interested in attending one of the investment industries largest and longest running educational gatherings of investment professionals? Attend the CFA Institute's 67th Annual Conference ...

FEES AND EXPENSES: WHAT YOU DON'T KNOW CAN COST YOU
2/28/2014

The SEC's Office of Investor Education and Advocacy is issued a bulletin to educate investors about how fees can impact the value of an investment portfolio. As with anything you buy, there are fees and costs associated with investment products and services. These fees may seem small, but over time they can have a major impact on your investment portfolio. Along with the other factors you think about when choosing either a financial professional or a particular investment, be sure you understand and compare the fees you'll be charged. It could save you a lot of money in the long run... HIGHLIGHTED EVENT: Are you a new investor with limited knowledge about options? Attend an Options Industry Council (OIC) Investor Education Seminar near you

FINANCIAL SECURITY: DOS AND DON'TS
2/21/2014

The FINRA Investor Education Foundation issued five tips to help consumers both manage their day-to-day financial challenges and build a brighter financial future in 2014. Drawing on the FINRA Foundation's National Financial Capability Study of more than 25,000 Americans, the Foundation's Tips—Five Dos and Don'ts That Can Help You Achieve Greater Financial Security—provides consumers with practical, actionable guidance to help secure greater financial stability. "With an economy on the mend, many Americans are facing a healthier job market and trying to get their financial lives back on track. Based on the findings of the Foundation's National Financial Capability Study, we have developed five practical tips to help Americans secure a brighter financial future," said FINRA Foundation President Gerri Walsh... HIGHLIGHTED EVENT: Interested in attending one of the investment industries largest and longest running educational gatherings of investment professionals? Attend the CFA Institute's 67th Annual Conference ...

NOTHING TO INVEST AFTER COLLEGE? THINK AGAIN...
2/13/2014

Are you a recent college grad with nothing to invest? Well, the CFPB's Eleanor Blayney says: think again! Few college grads appreciate the enormity of their potential human capital and its impact on their financial welfare over their lifetimes. They may assume that thinking about investment will come later, once they deal with debt and find a place to live. In reality, however, they are their own largest, most productive investment. Starting right away to manage the returns and minimize the risks of this investment is, from a financial planning perspective, every bit as smart as getting that college degree. ... HIGHLIGHTED EVENT: Are you a new investor with limited knowledge about options? Attend an Options Industry Council (OIC) Investor Education Seminar near you ...

INTERESTED IN VARIABLE ANNUITIES?
2/7/2014

The SEC's Office of Investor Education and Advocacy recently posted a bulletin for new investors interested in variable annuities. The bulletin provides some basic facts about variable annuities and how they work. Variable annuities are complex products, and the investor bulletin focuses solely upon the basics. A variable annuity is an investment product with insurance features. It allows you to select from a menu of investment choices, typically mutual funds, within the variable annuity and, at a later date – such as retirement – allows you to receive a stream of payments over time... HIGHLIGHTED EVENT: Interested in attending one of the investment industries largest and longest running educational gatherings of investment professionals? Attend the CFA Institute's 67th Annual Conference ...

UNDERSTANDING "INVESTMENT TRAPS"
1/30/2014

The CFA Institute's A. Michael Lipper offers his take on a few "traps" investors might get "caught" up by in the current investment climate. One trap Lipper highlights is the failure of stock investors to pay attention to bonds. He explains: "Stocks can surprise both positively and negatively. In most cases, the best thing that can happen to owners of bonds is that they receive timely payment of interest and principal. Thus bond prices are more sensitive to potential bad news than the stock market. As a stock investor, I am aware that bond prices can be a useful warning device for me. Changes in credit ratings are often a coincident indicator of bond price movements. Nevertheless, they can be leading indicators for the general stock market prices." ... HIGHLIGHTED EVENT: Are you a new investor with limited knowledge about options? Attend an Options Industry Council (OIC) Investor Education Seminar near you ...

FINRA: 10 TIPS TO DETERMINE WHETHER AN IRA ROLLOVER IS RIGHT FOR YOU
1/24/2014

The Financial Industry Regulatory Authority (FINRA) issued a new Investor Alert called The IRA Rollover: 10 Tips to Making a Sound Decision to help the investing public decide if an IRA rollover is right for them. The decision to move your retirement nest egg or stay put is an important one, which usually involves significant funds. "Workers and retirees should understand that in many cases they don't have to act immediately upon switching jobs or retiring. Taking the time to compare costs and investment options can help you keep your nest egg from suffering unnecessary cracks," said Gerri Walsh, FINRA's Senior Vice President for Investor Education. ... HIGHLIGHTED EVENT: Are you a new investor with limited knowledge about options? Attend an Options Industry Council (OIC) Investor Education Seminar near you ...

SIPC LAUNCHES NEW WEBSITE
1/17/2014

The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund authorized by Congress to help investors at failed brokerage firms, today announced the launch of its new website, which has been completely redesigned with investors, financial professionals, and regulators in mind. New sections of the site assist the public in understanding more about what SIPC is and does and how the claims process works. In order to provide the best user experience possible, the new site incorporates up-to-date best practices in design, information architecture, usability, and mobile and interactive development. To reflect the shift to mobile devices and tablets in recent years, the site is more accessible on handheld devices and will reformat to fit any screen. ... HIGHLIGHTED EVENT: Are you an investor looking into emerging markets? Attend the CFA Institute's program on "Opportunities And Threats For Emerging Market Investors"

OIC INTRODUCES OPTIONS EDUCATION PROGRAM
1/10/2014

The Options Industry Council (OIC) rolled out its news options education intiative, the Options Education Program. The Options Education Program brings together OIC's full range of educational offerings and network of leading industry professionals to offer investors, whether novice or advanced, the best educational platform possible to learn about options for free. A core component of the Options Education Program or OEP is the MyPath assessment tool, which allows investors to test their level of options knowledge for a personalized learning track. From there users will advance through a customized curriculum filled with online courses, podcasts and videos ranging from basics to advanced options topics. ... HIGHLIGHTED EVENT: Are you a new investor with limited knowledge looking for investment tips? Attend the AAII's New York City Chapter seminar on "How to Earn Double-Digit Returns While Avoiding Major Down Markets"

OUTPERFORMING THE MARKET: AN UNREALISTIC GOAL?
12/6/2013

In the years when you are figuring out whether you are the next Warren Buffett, you will almost certainly pay more in fees and commissions than those investors who own straightforward index funds. Of course, even if your performance is good, it is possible that it is down to simple luck, just like you could theoretically be a great investor with an amazing edge and simply be losing money due to a streak of bad luck. It's really hard to tell which is which. On average, individual investors trying to beat the markets do not systematically pick underperforming stocks — on average, they pick stocks that perform like the overall market. CFA Institute blogger Lars Kroijer explains why outperforming the market may be an unrealistic goal for some … HIGHLIGHTED EVENT: Are you a new investor with limited knowledge about options? Attend an Options Industry Council (OIC) Investor Education Seminar near you …

SOCIAL NETWORKING: A KEY TO FINANCIAL LITERACY?
11/22/2013

According to the American Association of Individual Investors, your social network can be a major influence on your portfolio allocation. Drawing on research from the University of Idaho, individuals who were the most financially knowledgeable and had stronger relationships with other financially literate people were more likely to build a portfolio with an appropriate allocation. They conclude that financial literacy is positively related to holding stocks in a portfolio and choosing stocks over a default option of a money market fund. Regularly interacting with others who are financially literate also has a significantly positive relationship on choosing to allocate to stocks. … HIGHLIGHTED EVENT: Need advice in private wealth management? Attend the CFA Society of Philadelphia's Annual High New Worth Conference on December 5th in Philadelphia …

TRYING TO FIND THE RIGHT FINANCIAL ADVISOR?
11/14/2013

FINRA is launching an enhanced version of their advisor search tool, BrokerCheck. The enhanced search tool will allow investors to more quickly access and more intuitively understand the professional background of investment professionals. Now investors can search both the BrokerCheck and Investment Adviser Public Disclosure (IAPD) record of any securities professional or firm directly on the FINRA homepage. BrokerCheck illustrates a more user-friendly view of the industry professional's employment status and history, industry registrations, and any reportable events such as customer disputes or disciplinary actions that may have occurred during his or her career … HIGHLIGHTED EVENT: Looking to network with other leaders in financial literacy? Attend the 2013 AAII Investor Conference this weekend in Orlando for ideas, tools and information necessary to succeed in today's investment marketplace …

FREE HELP FOR VETS ON HOLIDAY
11/8/2013

The Investor Protection Trust and the Investor Protection Institute are offering both retired and active duty military and widows and widowers of the fallen free access to an online tool detailing how to make the most of retirement income from Social Security. Veterans have an opportunity to add $100,000 or more to their lifetime benefits by following a claiming strategy … HIGHLIGHTED EVENT: Are you a new investor with limited knowledge about options? Attend an Options Industry Council (OIC) Investor Education Day near you …

CLOSED-END FUNDS: UNDERSTANDING DISTRIBUTION RATES
10/31/2013

FINRA recently issued an investor alert on closed-end fund distributions. Closed-end funds are similar to mutual funds in that they professionally manage portfolios of stocks, bonds or other investments (including illiquid securities). Investor's should be aware that a fund's distribution rate is not the same thing as its return-even if the numbers might look similar. Where is the closed-end fund getting the money to pay distributions? In some cases, part of the distribution comes from the return of principal. ... Do you have personal financial questions and need to talk to a professional? Connect with a qualified expert for free at a Financial Planning Day near you …

CONFRONT YOUR FINANCIAL FEARS
10/24/2013

The Certified Financial Planner Board of Standards encourages consumers to face their financial ghosts during this spooky season. Halloween is a great time to scare ourselves silly, but not about finances. Some people confess to being too frightened to open their monthly investment account statements; others put off getting life insurance or preparing wills because having to plan for death is just too unsettling. Retirement – a time of life that should be sunny and pleasurable – is for many a haunting and shadowy prospect … Looking to network with other leaders in financial literacy? Attend the 2013 AAII Investor Conference from November 15-17 in Orlando for ideas, tools and information necessary to succeed in today's investment marketplace …

GET HIP TO SMART BETA STRATEGIES
10/17/2013

Over the last five years, investors witnessed the emergence of a new class of equity index products known as strategy indexes, or smart betas. The American Association of Individual Investors developed an investor's guide to these strategy indexes, or smart beta strategies. The guide discusses the advantages of smart betas relative to active management and traditional indexes. It also examines three of the most popular smart beta products. Whether based on empirical research or actual live history, these smart beta products do seem to offer superior performances relative to traditional indexes... HIGHLIGHTED EVENT: Looking to network with other leaders in financial literacy? Attend the Society for Financial Education and Professional Development's leadership conference next week on Capitol Hill …

HELPING VICTIMS OF FINANCIAL FRAUD
10/10/2013

The National Center for Victims of Crime and the FINRA Investor Education Foundation have released a guide to provide those who serve the more than 30 million Americans who are victims of financial fraud every year with an important new tool to aid their clients. The guide was developed, in part, to help increase the number of victims who report fraud and get access to assistance. Utilizing the input of a variety of stakeholders across the financial fraud field, the Advocate's Guide is an easy-to-use tool that helps advocates connect victims with resources for recovery... ... HIGHLIGHTED EVENT: Are you a new investor with limited knowledge about options? Attend an Options Industry Council (OIC) Investor Education Day near you …

DEBT CEILING SURVIVAL TIPS
10/3/2013

We are fast approaching hitting our nation's debt ceiling. And no matter one's view on the situation playing out in Washington, D.C. between Congress and the President, consumers need to be aware of how this debate – and possible default – could impact them. As a consumer, what can you expect in the next few weeks, and what can you do to prepare? The CFP Board's Consumer Advocate, Eleanor Blayney offers some observations and tips to help weather this latest political storm, including: stay diversified, keep your non-essential spending to a minimum and expect volatility in your investment portfolio but don't actively try to avoid it ... Do you have personal financial questions and need to talk to a professional? Connect with a qualified expert for free at a Financial Planning Day near you …

DIVERSIFY YOUR PORTFOLIO
9/25/2013

Want to learn more about how to diversify your portfolio and how often to do it? One of the best ways to manage risk and maximize your returns when investing is to make sure you diversify your portfolio. It is also important to review your asset allocation periodically to make sure it is correct for your stage in life. Whether you are investing on your own or working with a qualified professional, the AIE's new "A Diversified Portfolio – What You Need to Know and Investing Options" is a valuable resource available now at http://www.investoreducation.org/diversification.

INVESTOR ALERT: PRIVATE PLACEMENTS
9/18/2013

A new investor alert called Private Placements-Evaluate the Risks before Placing Them in Your Portfolio has been issued by the Financial Industry Regulatory Authority (FINRA) to caution investors that investing in private placements is risky and can tie up their money for a long time. A private placement is an offering of a company's securities that is not registered with the Securities and Exchange Commission (SEC) and is not offered to the public at large. Many private placements are offered pursuant to Regulation D of the Securities Act of 1933. In general, you must be an "accredited investor" to invest in a private placement. FINRA is advising investors that if they are provided with a private placement memorandum or other offering document, they should carefully review it and make sure that statements by their broker are consistent with it …

RISK AND INVESTING: KNOWING WHEN TO HOLD 'EM
9/11/2013

Getting rich slowly in the markets is simple. Just find the risk that everyone else irrationally hates right now. That's the one that is available at the right price and will yield good returns. Predicting the asset everyone is going to love next year is hard or impossible. Noticing what everyone hates right now, what people are going to call you a complete idiot for buying, is a lot easier. When you turn the question around, you can more readily find assets that are at historically good relative value and are going to offer decent returns over the next few years, as well as strategies that have historically outperformed consistently in the long run. Check out how a recent CFA Institute blog post uses poker as an analogy for risk in the market and about "good" risks versus "bad" risks …

DO YOUR HOMEWORK: SAVING IN COLLEGE
9/4/2013

While you're in college, put away that extra money from babysitting, gifts, and part-time and summer jobs—rather than spending it. It will make a big difference down the road! Potential future expenses, such as the deposit and first month's rent for a new apartment, buying a car, or the expenses of an out-of-state move for a job, can make a big financial impact if not planned for in advance. Get started by doing your homework. Search traditional and online banks for the interest savings plan with the highest yield and the lowest account-management fees. If you're likely to need funds in the near future, be sure to choose an account that doesn't penalize you for early withdrawals. For more tips on how to save when in college, check out the National Endowment for Financial Education (NEFE) CashCourse website …

WHAT YOU NEED TO KNOW ABOUT MARGIN ACCOUNTS
8/28/2013

A "cash account" is a type of brokerage account in which the investor must pay the full amount for securities purchased. An investor using a cash account is not allowed to borrow funds from his or her broker-dealer in order to pay for transactions in the account. A "margin account" is a type of brokerage account in which the broker-dealer lends the investor cash, using the account as collateral, to purchase securities. Margin increases investors' purchasing power, but also exposes investors to the potential for larger losses. Check out the U.S. Securities & Exchange Commission (SEC) investor bulletin to find out what you need to know about margin …

INVESTOR ALERT: UP IN SMOKE – POT STOCK SCAMS
8/21/2013

With medical marijuana legal in almost 20 states, and recreational use of the drug recently legalized in two states, the cannabis business has been getting a lot of attention-including the attention of scammers. Like many investment scams, pitches to invest in potentially fraudulent marijuana-related companies may arrive in a variety of ways. Regardless of how you first hear about them, the offers almost always contain hallmarks of "pump and dump" ploys. Specifically, fraudsters lure investors with aggressive, optimistic-and potentially false and misleading-statements or information designed to create unwarranted demand for shares of a small, thinly traded company with little or no history of financial success. Once share prices and volumes reach a peak, the cons behind the scam sell off their shares at a profit, leaving investors with worthless stock. Check out FINRA's investor alert about these potential scams …

ETFs AND ETNs: WHAT YOU NEED TO KNOW
8/14/2013

One of Warren Buffett's famous quotes that many investors and portfolio managers follow and recite to their followers, "never invest in a business you can't understand," can be applied to investing in exchange-traded products (ETPs). The nomenclature ETP is rarely used in the popular press or by investors. All ETPs are not created equal. There are exchange-traded funds (ETFs), exchange-traded notes (ETNs) and unit investment trusts (UITs). Many will add open- and closed-end mutual funds to the ETP basket as well. To confuse matters more, many of these vehicles have different structures: grantor trusts, limited partnerships and open-ended 1940 Investment Company Act funds. A recent post from the American Association of Individual Investors (AAII) focuses on ETFs and ETNs, explaining the basic mechanics of how they trade, and why it is important to know what you own …

INVESTOR ALERT: ALTERNATIVE MUTUAL FUNDS
7/31/2013

Alternative or "alt" mutual funds are publicly offered, SEC-registered funds that use investment strategies that differ from the buy-and-hold strategy typical in the mutual fund industry. Compared to a traditional mutual fund, an alternative fund typically holds more non-traditional investments and employs more complex trading strategies. Investors considering alternative mutual funds should be aware of their unique characteristics and risks. Alt funds might invest in assets such as global real estate, commodities, leveraged loans, start-up companies and unlisted securities that offer exposure beyond traditional stocks, bonds and cash. The strategies alternative mutual funds employ tend to fall on the complex end of the spectrum. For more detail on what you should know before considering investing in alternative mutual funds, check out the investor alert issued recently by FINRA

INVESTOR ALERT: BITCOIN INVESTMENT SCAM
7/24/2013

The SEC issued an investor alert today warning investors about the dangers of potential investment scams involving virtual currencies promoted through the Internet while also announcing charges against a Texas man and his company for defrauding investors in a Ponzi scheme involving Bitcoin, a virtual currency traded on online exchanges for conventional currencies like the U.S. dollar or used to purchase goods or services online. The SEC alleges that Trendon T. Shavers, who is the founder and operator of Bitcoin Savings and Trust (BTCST), offered and sold Bitcoin-denominated investments through the Internet and promised investors up to 7 percent weekly interest based on BTCST's Bitcoin market arbitrage activity, which supposedly included selling to individuals who wished to buy Bitcoin "off the radar" in quick fashion or large quantities. In reality, BTCST was a sham and a Ponzi scheme …

FINANCIAL PLANNING AND CHRONIC ILLNESS
7/10/2013

When you live with a chronic illness, you need to confront both the day-to-day and long-term financial implications of that illness. Talking openly about your health can be hard, but sharing your questions and challenges with those who can help you is extremely important, because recommendations can be better tailored to your needs. Every person with a chronic illness has unique issues, but there are some specific areas you should keep in mind as you're putting together your financial plan. They include: money management, insurance, investing, and estate planning among others. For full details on what you should consider when you have a chronic illness and are doing financial planning, check out the AICPA's 360 Degrees of Financial Literacy piece on the subject …

STOPPING FINANCIAL FRAUD: Rx FOR OLDER AMERICANS
6/13/2013

Could America's doctors and nurses play a bigger role in learning the symptoms and recommended "treatments" for older patients suffering from mild cognitive impairment (MCI) that can leave them more susceptible to investment scams and other financial abuse? A new Investor Protection Trust (IPT) online survey of 603 U.S. doctors and the nurses who work with them found that about nine out of 10 doctors/nurses (92 percent) think that mild cognitive impairment often makes seniors more vulnerable to investment fraud/financial exploitation and more than four out of five doctors/nurses (84 percent) are willing to refer an elderly patient who may be the victim of investment fraud to those who may be able to help them with their financial affairs or to the proper authorities for help. More details can be found on the IPT website

HOW GEN Y CAN SAVE FOR RETIREMENT
6/7/2013

Americans ages 18 - 65+ name "not having enough money for retirement" their top financial concern. Many Generation Y workers may believe that saving small amounts for retirement right now is not important enough to warrant skimping and saving on their present day-to-day needs; since many are busy paying off student loans and saving up for more immediate purchases like cars or houses. Although retirement can seem like an eternity away when you've only just entered the job market, it's important not to neglect your retirement savings. It's okay to start small, and that saving even the smallest amount every paycheck is better than saving nothing at all. America Saves offers tips on how to free up some funds in your budget, and make a plan to increase savings as time goes on and your salary increases ...

ANNUITIES: DEFERRED OR IMMEDIATE?
5/23/2013

An annuity is a contract, purchased from a life insurance company, that provides for a set stream of payments or income for a set length of time, usually until the death of the annuity holder. The concept of an annuity can be confusing because life insurance companies use the term to describe two different types of contracts: deferred annuities and immediate annuities. Deferred annuities allow investors to put away money on a tax-deferred basis so that a lump sum can be accumulated at a later date. An immediate annuity has no accumulation period—an investor simply pays the insurance company a lump sum, and then receives the stream of payments for the set time period. If you are considering an annuity to secure a steady cash flow during retirement, check out the primer from the American Association of Individual Investors ...

"LUMP SUM" PENSION SETTLEMENTS
5/15/2013

Do you receive a monthly pension from a former employer? Are you getting regular distributions from a settlement following a personal injury lawsuit? If so, you may be targeted by salespeople offering you a lump sum today to buy the rights to some or all of the payments you would otherwise receive in the future. Typically the lump sum offered will be less than the total of the periodic payments you would otherwise receive. After acquiring the rights to a future income stream, these companies may turn around and sell these income streams to retail investors. FINRA and the SEC's Office of Investor Education and Advocacy issued an Investor Alert to inform anyone considering selling their rights to an income stream—or investing in someone else's income stream—of the risks involved and to urge investors to proceed with caution ...

MUNI BONDS: RISKS AND REWARDS
5/8/2013

Why invest in the $3.7 trillion municipal bond market? Tax exemption, low default risk, and an investment that lends money to state and local governments to build roads, schools, and hospitals, among other essential needs, are among some of the compelling reasons. And the returns: the average weekly value of the Bond Buyer 20-bond GO Index over the last 20 years (1993-2012) is 5.0%. As with any investment, however, investors need to weigh the risks against the returns and determine if a particular investment meets their specific needs. To be sure, one of the primary concerns of investors in any "fixed-income" instruments like municipal bonds is the effect of rising interest rates on a bond's market value. Check out the new SIFMA blog post about municipal bonds for more information ...

CRUNCHING YOUR NET WORTH NUMBERS
5/1/2013

One of the best ways to assess where you stand financially is to calculate your net worth. When you add up all of your assets and subtract your debts at least once a year, you can clearly see if you're progressing towards your goals or moving backwards. You may be investing more money in your retirement accounts each year, for example, but your net worth may actually be shrinking if you're also taking on more debt. Breaking down your assets and your liabilities into categories also makes it easier to see where you can beef up your savings, and which liabilities are holding you back. To calculate your net worth, you (and your spouse) will need to dig up your recent financial statements and do a little research. The FINRA Investor Education Foundation's SaveandInvest.org lays out an action plan for calculating your net worth ...

FACTS ON FEES AND 401(K)s
4/24/2013

Consistently falling prices in a marketplace are usually a sign of competition and innovation. Think about technology products, for example-the computer you can buy today almost certainly costs less and does more than the computer you could have bought a year ago, while the one you will be able to buy a year now from will be better and cheaper still. Thanks to innovation, increasing transparency, and the dynamics of a highly competitive market, 401(k) mutual fund fees also have been falling-even as plans offer more and better services to participants. Let's take a closer look. In any discussion of fees, it's important to start with a key notion: all forms of savings and investment come with costs. Investors incur these costs through fees, spreads, or reduced returns. Check out ICI's post about the facts on fees and 401(k)s for more details ...

BEHIND THE BITCOINS BOOM
4/18/2013

A craze is sweeping the nation. Indeed, it is sweeping the world. That craze is Bitcoins, the decentralized, encrypted digital currency, introduced in 2009. Bitcoins, which have a permanently fixed supply, are turning out to be a pretty big deal because of the stark contrast with our present (fiat) currency system — which thanks to central banker largesse is yielding a growing and seemingly endless supply of money (latest entrant to the game: Japan). Eventually, this rampant money printing risks triggering inflation, which destroys currency values. So, to understand the recent Bitcoin binge, you need to understand inflation. Let's consider what might happen if inflation applied to other facets of life ... like sports. Check out the CFA Institute Enterprising Investor blog for a primer on Bitcoins …

HOW MUCH SHOULD YOU SAVE?
4/10/2013

Some people are natural "planners"-others, not so much. But as baseball great Yogi Berra once commented, "If you don't know where you're going, you might end up someplace else." Effective savings strategies start with a goal, something to aim for. Some goals are easier to identify than others, of course. It's easy enough to figure out a price range for something like a television, a car, or even a house—once you've figured out things like how big a screen you want, what make/model you prefer, and where you want to live. In fact, some of those goals are set by the cost of those choices. For many, retirement savings goals seem impossible to set. There are, however, tools that can help you set a reasonable target. Check out more details from the American Savings Education Council

SOCIAL MEDIA AND INVESTING
4/3/2013

Do you use Facebook, Twitter and other social media websites as an investing tool? The SEC's Office of Investor Education and Advocacy recently issued an Investor Bulletin to provide investors with tips they should consider when establishing an account on a social media website. Investors' use of Facebook, Twitter and other social media websites as an investing tool has increased substantially in recent years. Investors who use social media websites for investing should be mindful of the various features on these websites in order to protect their privacy and help avoid fraud. For example, investors should be mindful of the default privacy settings when establishing an account on a social media website as it could permit sharing of information to a vast online community. Additionally, investors should be extra careful before clicking on links sent to you or posted …

STAY IN CONTROL, AVOID INVESMENT MISTAKES
3/27/2013

We just don't know what will happen next. It's a reality that can be hard to handle as an investor. From fiscal cliffs and debt ceilings to unemployment rates and quarterly earnings, it can feel like we're just along for the ride. And this feeling that we lack control, combined with uncertainty about the future, can make it very difficult to behave when it comes to investing. An investor's goal for 2013 needn't be finding the "best" investment or even the next Apple Inc. Instead, an investor (and their portfolio) should be better off if focusing on the things under their control and implementing strategies to help avoid classic investing mistakes. A new article from the American Association of Individual Investors (AAII) offers five steps for gaining control of your investments and avoiding costly mistakes …

BE AN INFORMED INVESTOR
3/20/2013

Do you know how to research a stock, bond, mutual fund, or investment professional to see if they are a good fit for you? If you need help figuring out how to do the homework known as "due diligence," there's a new place to turn for help. Before investing in a stock, bond, mutual fund or hiring an investment professional, investors should review the AIE's new "Due Diligence: How to Make Sure You Are an Informed Investor" available now at http://www.investoreducation.org/duediligence.

SCAM ALERT: POACHING VETERANS' PENSIONS
3/13/2013

Veterans and their families are a target for some dishonest advisers who are claiming to offer free help with paperwork for pension claims. The scheme involves attorneys, financial planners, and insurance agents trying to persuade veterans over 65 to make decisions about their pensions without giving them the whole truth about the long-term consequences. Specifically, these unscrupulous brokers try to convince veterans to transfer their assets to a trust ¬or to invest in insurance products - so they can qualify for Aid and Attendance benefits. What they don't reveal is that these transactions could mean that the veteran loses eligibility for Medicaid services or loses the use of their money for a long time. Adding insult to injury, the advisers are charging fees that range from hundreds to thousands of dollars for their services. The FTC offers tips on how vets can stay safe …

FINANCIAL PLANNING FOR CAREGIVERS
3/6/2013

Being a caregiver to an aging or ill parent either physically, financially, or both, is a compassionate choice that involves immediate and long-term financial planning. It is important to understand all the expenses involved and what you can afford. Follow these tips to help trim expenses and keep your income while helping your parents at the same time. The National Endowment for Financial Education's SmartAboutMoney website provides six tips for managing your expenses while helping your parents. They include details related to making a budget, cutting costs, planning for long-term expenses, keeping your income, considering hiring help and lowering your tax bill …

PREVENTING FINANCIAL ABUSE OF SENIORS
2/27/2013

You may think you know your elderly relative very well. But do you really? Too often, money is the one subject we are reluctant to talk about with our parents or relatives, because we worry that we'll be seen as looking for a handout or overly eager for an eventual inheritance. Your financial abuse protection plan for older relatives begins with conversation. Start where CFP® professionals always begin when they do financial planning: with goals and hopes for the future. From there, perhaps in a subsequent conversation, you can broach the subject of the financial resources available to support the goals of your parent, grandparent, aunt or uncle. For more details on creating a plan to shield your older relative from financial abuse, check out the CFP Board's February newsletter ...

INVESTOR ALERT: INTEREST RATES AND YOUR BOND PORTFOLIO
2/20/2013

If you own bonds or have money in a bond fund, there is a number you should know. It is called duration. Duration signals how much the price of your bond investment is likely to fluctuate when there is an up or down movement in interest rates. The higher the duration number, the more sensitive your bond investment will be to changes in interest rates. Currently, interest rates are hovering near historic lows. Many economists believe that interest rates are not likely to get much lower and will eventually rise. If that is true, then outstanding bonds, particularly those with a low interest rate and high duration may experience significant price drops as interest rates rise. A new FINRA Investor Alert warns that if you have money in a bond fund that holds primarily long-term bonds, expect the value of that fund to decline when interest rates rise ...

DISCIPLINE REQUIRED IN INVESTING FOR RETIREMENT
2/14/2013

Over the past decade, equity investors have been blindsided by two severe bear markets, a global financial crisis, and the worst recession since the 1930s. As a result, they have seen generally meager investment returns. So it is not surprising that many had been fleeing stocks and equity mutual funds. Since the stock market peaked in October 2007, industry-wide net outflows from equity mutual funds totaled several hundred billion dollars through 2010. Historically, investors often have abandoned the stock market during steep downturns, missing out on subsequent recoveries. Those saving for long-term goals such as retirement, however, should consider the implications of reacting to recent events by reducing their equity allocations-and therefore reducing the growth potential of their portfolios. For more on the disciplined approach required to invest for retirement, check out the new AAII article ...

GETTING RETIREMENT SAVINGS BACK ON TRACK
2/7/2013

Tough times call for tough choices. If you've stopped making retirement contributions to make ends meet, you're not alone. But as soon as your financial situation allows, it's important to get your retirement savings back on track. You don't have to implement all of these steps, but prioritizing your efforts will maximize the results. If you borrowed from an IRA, return all money to a new rollover IRA account within 60 days. After that, the money you borrowed cannot be returned and likely will be considered taxable income and may be penalized. Begin making contributions through your employer's retirement plan, such as a 401(k) or 403(b) plan. Try to commit to saving enough that you get the full amount of any matching contributions offered by your employer. Check out all the steps to get your retirement plan back on track at NEFE's SmartAboutMoney.org website ...

FUTURES DUE DILIGENCE
1/31/2013

As more individual investors consider adding futures and off-exchange foreign currency (forex) trading to their investment portfolios, it's essential that they find out as much as they can about a firm before opening a trading account. National Futures Association (NFA) has been working diligently during the past year to upgrade their investor research capabilities in an effort to provide greater transparency for futures investors and assist them in conducting due diligence. As part of these efforts, in November, they improved the Background Affiliation Status Information Center (BASIC) so that it now includes more-detailed financial information about Futures Commission Merchants (FCM). BASIC is a free service investors can use to research the registration and disciplinary backgrounds of current and former Commodity Futures Trading Commission (CFTC) registrants. The service provides registration histories and information concerning disciplinary actions taken by NFA, the CFTC and all U.S. futures exchanges ...

YOUR CONFIRMATION STATEMENT
1/24/2013

Under SEC rules, whenever you purchase or sell a security, the broker-dealer through whom you bought or sold the security is generally required to give or send you a written notification – or confirmation – with information about the transaction. The confirmation statement contains basic information about the transaction, such as the identity of the security, the amount of securities you purchased or sold, and the price that you paid or received. The confirmation statement serves a basic investor protection function in several ways. It contains information that allows you to verify the terms of your transactions, alerts you to potential conflicts of interest with your broker-dealer, acts as a safeguard against fraud by informing you of the activities in your account, and provides you a means by which to evaluate the costs of your transaction and the quality of your broker-dealer's execution ...

AVOIDING A PERSONAL FISCAL CLIFF
1/16/2013

The FINRA Investor Education Foundation has released Five Tips to Keep Your Finances From Going Off a Cliff. While the new year is beginning with improving economic conditions, the financial situation of many Americans remains fragile. The FINRA Foundation's five tips can help consumers and investors keep their finances on solid ground. "With changing tax rates, and a still recovering housing market, many Americans face an uncertain and precarious situation. You cannot control your tax rate or the value of your home, but there are practical steps you can take to achieve greater financial security even in the face financial shocks," said FINRA Foundation President Gerri Walsh. The FINRA Foundation's five tips can help Americans successfully navigate today's changing conditions ...

TARGET-DATE FUNDS
1/9/2013

Most experts will tell you that the most important decision in retirement saving is deciding how much to save, not how those savings will be invested?and yet, for years, much of the education and discussion about retirement saving has been focused on investing. Enter the target-date fund (TDF), a type of investment fund apportioned according to what investment professionals deem to be an appropriate age-based blend of stocks, bonds, and other asset classes for an individual within a particular target-date of his or her retirement. Perhaps more importantly, that apportioning is automatically rebalanced over time, as the target date approaches, becoming less focused on growth and more focused on income over time. It's an approach to which individuals and plan sponsors alike have come to embrace. For more on EDFs, check out the recent Employee Benefit Research Institute article ...

CROWDFUNDING: WATCH OUT FOR INTERNET FRAUD
1/2/2013

Crowdfunding's presence on the Internet has risen sharply in recent months in anticipation of rules to allow small businesses and entrepreneurs to raise investments online, a task force of state and provincial securities regulators said recently. Crowdfunding is an online money-raising strategy that began as a way for the public to donate small amounts of money to help finance projects or causes. Through the Jumpstart Our Business Startups (JOBS) Act, small businesses and entrepreneurs will be able to tap into the "crowd" in search of investments to finance their business ventures once the SEC adopts rules to do so, which are expected in 2013. Anticipating an increase in online fraud stemming in part from passage of the JOBS Act, NASAA created a task force on Internet fraud investigations shortly after the enactment of the JOBS Act to monitor crowdfunding and other Internet offerings ...

MUNICIPAL BONDS: UNDERSTANDING CREDIT RISKS
12/27/2012

The Securities and Exchange Commission recently issued an Investor Bulletin to help purchasers of municipal bonds better assess the bonds' credit risks. The bulletin provides several factors for investors to consider including the type of the bond, the purpose and nature of the financing, the overall financial condition of the issuer, and the sources of funds to pay both principal and interest. The bulletin also urges investors to undertake their own independent review of municipal bonds' credit risk and not rely solely on a credit rating or a short-hand label such as "general obligation" or "revenue" bond when deciding whether to purchase a municipal bond. The bulletin also provides a list of additional resources where investors can find more information on municipal bonds ...

ROLLOVERS AND IRAS
12/18/2012

Rollovers into traditional individual retirement accounts (IRAs) are playing an important role as households consolidate retirement assets, according to new data in the Investment Company Institute's annual survey of households owning IRAs. Specifically, in May 2012, 45 percent of traditional IRA-owning households with rollovers in their traditional IRAs reported that consolidating assets was among the reasons for their rollovers, and 19 percent said it was the primary reason. The paper, The Role of IRAs in U.S. Households' Saving for Retirement, 2012, also found that taxes were forefront in savers' calculations with 67 percent of traditional IRA-owning households with rollovers indicating that preserving the tax treatment of their accounts was a factor in their decision to make a rollover. Overall, 51 percent of traditional IRA-owning households reported that their traditional IRAs contained rollovers from employer-sponsored retirement plans ...

STOCK SCREENS
12/5/2012

Over the years, the American Association of Individual Investors has studied the works of many famous and successful investors. AAII's goal has been to learn from the winning strategies and techniques of investment professionals with a proven record of long-term success. AAII found that it is easy to come up with a list of meaningful screening criteria, but building and applying a cohesive set of criteria can be challenging. Screening is the application of quantitative criteria to a broad universe of stocks in order to narrow the list down to a few companies. It allows investors to focus attention on a smaller but more promising group of stocks. It also forces investors to use a consistent framework to decide which stocks to include in their portfolio. The December AAII Journal offers more details on how to pick an approach that is right for you ...

TIPS FOR ESTATE PLANNING
11/21/2012

As Americans gather for the Thanksgiving holiday, many thoughts will turn to loved ones both past and present. According to Certified Financial Planner Board of Standards, Inc. ("CFP Board") Consumer Advocate, Eleanor Blayney, CFP®, Thanksgiving's focus on those we care about creates the ideal setting to reflect on the legacy we will leave to our family and friends. To ensure those reflections turn into reality, Blayney suggests all Americans take time this month to create their own estate plan. Estate planning is one of 12 steps in CFP Board's year-long "12 for '12 Approach to Financial Confidence. Blayney suggests that consumers consider a few tips when creating their estate plans including: taking an inventory, considering to whom you'd like your assets to go or not go, and using life insurance to create an estate if you have dependents but nothing to behest ...

FUTURES DUE DILIGENCE
11/14/2012

To increase the amount of information available to futures customers, the National Futures Association (NFA) is launching a new service to assist them in their due diligence review of Futures Commission Merchants (FCM). Individuals can now view certain financial information of any FCM via an easy-to-read display that appears on each FCM's Background Affiliation Status Information Center (BASIC) system page on NFA's website. From a FCM's BASIC page, the public will now be able to access general information about an FCM, as well as publicly available disciplinary information and financial information for an FCM. Information on how to access these financial reports is available on the new FCM Financial Information page in the Investor Information section of NFA's website. NFA's Special Committee on the Protection of Customer Segregated Funds recommended that FCM financial information be made publicly available ...

HURRICANE SANDY AND INVESTMENT SCAMS
11/7/2012

Hurricanes, floods, oil spills, and other disasters often give rise to investment scams. The Securities and Exchange Commission (SEC) is warning individuals, including those receiving lump sum insurance payouts, to be extremely wary of potential investment scams related to Hurricane Sandy. These scams can take many forms, including promoters touting companies purportedly involved in cleanup efforts, trading programs that falsely guarantee high returns, and classic Ponzi schemes where new investors' money is used to pay money promised to earlier investors. Some scams are circulated through spam email, promising high returns for small, thinly-traded companies that supposedly will reap huge profits from recovery and cleanup efforts. For example, the SEC brought a number of enforcement actions against individuals and companies who made false and misleading statements about alleged business opportunities in light of the damage caused by Hurricane Katrina ...

INVESTOR EDUCATION AT WORK
11/1/2012

More than 12,000 employees at nearly 300 companies in 12 states took part in over 120,000 hours of unbiased personal finance and investing education during the first three years of the "Investor Education in Your Workplace" program, according to an Investor Protection Trust (IPT) and Investor Protection Institute (IPI) report to the President's Advisory Council on Financial Capability. By the end of this fall, the number of people who have benefitted from Investor Education in Your Workplace will have jumped to about 20,000. The latest round of Investor Education in Your Workplace training launched on Monday (October 22nd) with more than 100 companies and over 8,000 individuals registered to participate. After starting out with the involvement of state securities regulators in Wisconsin, North Carolina and Pennsylvania, the national program has since spread to nine
other states ...

WHEN TRADING STOPS
10/24/2012

Thousands of stocks are quoted and traded every day in U.S. securities markets. Trading in most stocks takes place without interruption throughout the trading day-but some stocks are subject to short-term trading halts and longer-term trading suspensions. In rare instances when the market experiences a very steep decline, trading across the entire market can be stopped. This alert explains how, when and why interruptions in trading occur-and what investors can do in some of these situations. When a company is listed on a U.S. stock exchange, it agrees to notify the listing exchange about any corporate developments that could affect trading activity in its stock-before announcing them to the public. For more on what you need to know about halts, suspensions and other interruptions, check out this recent Investor Alert from FINRA ...

ESTATE PLANNING WEEK
10/17/2012

This week - October 15-21, 2012 - is National Estate Planning Awareness Week. By definition, estate planning is a process designed to help you manage and preserve your assets while you are alive, and to conserve and control their distribution after your death according to your goals and objectives. Estate planning is an important part of every financial plan, no matter the size of the estate. It's also an area that is often overlooked. With the right planning, you can save yourself, and your loved ones, money and emotional hardship. A few things to consider in your estate planning include: an advisor, a will, power of attorney, and advanced medical directive. For more details, check out the American Institute of Certified Public Accountant's (AICPA) FeedthePig.org site ...

REBALANCING YOUR PORTFOLIO
10/12/2012

The first three quarters of 2012 have been marked by handsome increases in stock prices, modest rises in bond and commodity prices, and generally declining stock market volatility. While these are welcome developments, investors should not get complacent going into the fourth quarter - nor be tempted to let their equity allocations run up as their market value increases rather than paring the allocations back as part of a disciplined rebalancing practice. You can look at rebalancing as a form of portfolio risk management. If you allow allocations to drift as asset prices fluctuate over time, the more volatile asset classes will tend to take over and increase portfolio risk - hence, the need for periodic rebalancing. Check out the CFA Institute's recent Inside Investing piece for more on rebalancing ...

HEDGE FUNDS: WHAT YOU NEED TO KNOW
10/4/2012

Like mutual funds, hedge funds pool investors' money and invest the money in an effort to make a positive return. Hedge funds typically have more flexible investment strategies than mutual funds. Many hedge funds seek to profit in all kinds of markets by using leverage (in other words, borrowing to increase investment exposure as well as risk), short-selling and other speculative investment practices that are not often used by mutual funds. Unlike mutual funds, hedge funds are not subject to some of the regulations that are designed to protect investors. Depending on the amount of assets in the hedge funds advised by a manager, some hedge fund managers may not be required to register or to file public reports with the SEC. To learn more, check out the new Investor Bulletin from the U.S. Securities and Exchange Commission ...

YOUR INVESTMENT PERFORMANCE
9/27/2012

If you have already implemented a financial plan that includes investing and saving, you are heading in the right direction for a secure financial future. But once you have started investing, what are the next steps to make sure your money grows? The nonprofit, 22-member Alliance for Investor Education (AIE), a consortium of America's top regulatory, nonprofit and industry organizations focused on investor education, is making available in one place the best online resources monitoring and evaluating investment performance. The AIE's new "Monitoring and Evaluating the Performance of Your Investments" is available now …

RETIREMENT SAVINGS AND TAX BENEFITS
9/14/2012

Individuals' ages are typically more important than their marginal tax rates in determining how much they benefit from deferred taxation of compensation contributed to employer-provided retirement plans, according to a study released today by the Investment Company Institute (ICI). The ICI study, The Tax Benefits and Revenue Costs of Tax Deferral, shows, for example, that in realistic simulations for a variety of investments, the tax benefits from a one-time $1 contribution to a retirement account are greater for a 45-year-old with a 15 percent marginal tax rate than for a 60-year-old in the 35 percent tax bracket. Sixty-nine percent of U.S. households report that they have employer-sponsored retirement plans (which include defined benefit and defined contribution plans) and/or individual retirement accounts (IRAs). This study explains the tax benefits that these households receive from setting aside a portion of their compensation for retirement ...

FINDING "POCKETS" FOR YOUR ASSETS
9/5/2012

One big advantage of a 401(k) plan is that it is tax-advantaged—it helps minimize the amount of money Uncle Sam can grab from your pockets in the form of taxes. But the best way to limit Uncle Sam's reach is to make sure you are putting the right assets in the right pocket. In this instance, the pockets are either taxable savings accounts or tax-deferred 401(k) accounts. The decision as to which account will hold your stock assets and which will hold your fixed-income assets while attaining your desired asset allocation is often referred to as the "asset location" decision. Sooner or later you will be saving in both taxable and tax-deferred accounts. A recent article from the American Association of Individual Investors can help you figure out how to pick the right tax pocket for your assets ...

MARKET METRICS: THE "GOLDEN CROSS" ... AND MORE
8/30/2012

There are no infallible guides to stock market movements. However, that doesn't stop investors from using various measurements to try to divine the current and future direction of a stock's price or the equity markets as a whole. There are some common methods (or metrics) for gauging the stock market, including gauging volatility, moving averages, the "golden cross/death cross," and using fundamental data. The CBOE Volatility Index measures real-time changes in the prices of a group of S&P 500 30-day options. A moving average reflects a stock's average price or an index's value over a specified period of time. When the short-term moving average of a stock or index rises above a longer-term average, the situation is referred to as a "golden cross." To learn more, check out the American Institute of Certified Public Accountants article on stock market metrics ...

401(k) KEY FOR GEN X
8/22/2012

Eligibility for participation in a workplace 401(k) savings plan is one of the single-most important factors in closing the retirement savings gap for Generation X, according to a report by the nonpartisan Employee Benefit Research Institute (EBRI). But for Gen Xers trying to calculate how much they will need in retirement, EBRI also finds that taking potential nursing home and home health care expenses into account is crucial to a realistic estimate of retirement savings needs. Earlier EBRI research has found that, overall, about 44 percent of both Baby Boomer and Gen Xer households are likely to be at risk of running short of funds during retirement, assuming they retired at age 65 and retained any net housing equity in retirement until other financial resources were depleted ...

INVESTMENT FRAUD AND OLDER AMERICANS
8/17/2012

Investment fraud and financial exploitation targeting older Americans is a major problem today and most seniors do not have the information they need to pick a financial advisor to help them protect their savings, according to a major new survey of 756 experts conducted by the Investor Protection Trust (IPT) and Investor Protection Institute (IPI) in response to questions posed by the Consumer Financial Protection Bureau (CFPB). What are the best ways to reach older Americans and their loved ones to educate them about how to protect themselves? The survey found that "programs delivered by local professionals, such as caregivers, adult protective services workers, law enforcement agencies, and health care professionals" worked best followed by "programs delivered through senior centers and other facilities catering to older Americans" ...

INVESTING & FINANCE TEACHING TOOLS
7/31/2012

Are you a teacher looking for free, quality resources to help instruct students on managing their personal finances? The nonprofit, 22-member Alliance for Investor Education (AIE), a consortium of America's top regulatory, self-regulatory and industry organizations focused on investor education, is making available a major, new resource today outlining 10 of the best Web-based resources for teachers looking to give their students a strong base of knowledge in investing and personal finance so they will know how to properly manage their finances as they grow into adulthood. The Alliance's new "Investing & Finance for Kids" is available now …

ARE YOU A "SAVINGS CONSUMER"?
7/25/2012

Like all investors, individuals who are living off of their retirement savings need a blueprint to construct a successful portfolio. But the blueprint that works for the typical investor who is saving for retirement won't work for those who are living off of their retirement savings. That's because the goals of these two types of investors are not quite the same. All investors want maximum returns on their savings. But those living off of their retirement savings are also "savings consumers" who use their savings to support themselves. These investors typically have two goals: savings that last and savings that provide large annual paychecks. To figure out how to balance those goals, check out a recent article from the American Association of Individual Investors ...

INVESTOR ALERT: EXCHANGE-TRADED NOTES
7/19/2012

The Financial Industry Regulatory Authority (FINRA) issued a new Investor Alert called Exchange-Traded Notes—Avoid Unpleasant Surprises to inform investors of the features and risks of exchange-traded notes (ETNs). ETNs are a type of debt security that trade on exchanges and promise a return linked to a market index or other benchmark. However, unlike ETFs, ETNs do not buy or hold assets to replicate or approximate the performance of the underlying index. An ETN's closing indicative value is computed by the issuer and is distinct from an ETN's market price. Investors should understand that an ETN's market price can deviate, sometimes significantly, from its indicative value. If the ETN is trading at a significant premium to its closing or intraday indicative value, investors might want to consider similar products that are not trading at a premium ...

SELF-DIRECTED IRAs
7/11/2012

The Retirement Industry Trust Association (RITA) and the North American Securities Administrators Association (NASAA) will conduct a free webinar to help raise public awareness of how to avoid fraud when considering investing in self-directed Individual Retirement Accounts. A self-directed IRA is an IRA held by a trustee or custodian that allows investments in a broader set of assets than is permitted by most IRA custodians, such as real estate, promissory notes and private placement securities. Because they include alternative assets, the risk and rewards of self-directed IRAs may be greater than those of traditional IRAs. The webinar is open to the public, is scheduled for July 18 at 2 p.m. EDT and registration is required. Topics to be discussed include: what self-directed IRAs are and why they are useful, warning signs of investment fraud in self-directed IRAs, and more ...

TEXAS' "DIY" INVESTOR EDUCATION
6/29/2012

What is the value of investing? The Texas State Securities Board, a member of the North American Securities Administrators Association (NASAA), has developed a "Do It Yourself" (DIY) online primer on the basics of investing, "Value of Investing." Although written specifically for Texas school district employees, the primer applies to everyone. Among the key topics covered: how to invest; the core principles that should underlie investment decisions; investing for retirement; and, avoiding scams. One reason for the development of the program is the State Securities Board's enforcement actions against promoters of fraudulent investments that were pitched to teachers ...

PROXY VOTING: WHY IT IS IMPORTANT
6/20/2012

As a shareholder, you are part owner of a company and that company's management has a responsibility to be accountable to you. You have an important voice in influencing policies that impact shareholder value, the culture of the company and the effect the company has on the world around it. On behalf of the financial services industry, the underwriters for public companies in the financial markets, SIFMA is now offering a comprehensive guide - the Proxy Resource Center - to the proxy election process on the importance of the individual investors' participation. Proxy voting is the primary means of ensuring corporations are accountable to their shareholders – whether they are individual or large institutional investors. In addition, the proxy voting process facilitates shareholder knowledge of and participation in key governance issues faced by the companies in which they have invested ...

ELDERLY FINANCIAL SWINDLES ON THE RISE
6/13/2012

Just ahead of World Elder Abuse Awareness Day, a new survey of over 7600 experts who deal with investment fraud/financial exploitation of American senior citizens shows that 84 percent agree that the problem of elderly financial abuse is getting worse. Nearly all of the respondents (99 percent) say that older Americans are "very vulnerable." How can this problem be combated? The Investor Protection Trust started the Elder Investment Fraud and Financial Exploitation (EIFFE) Prevention Program and has been working to train medical professionals who work with the elderly about how to spot older Americans who may be particularly vulnerable to investment fraud abuse and then to refer these at-risk patients to state securities regulators and Adult Protective Services (APS) professionals ...

GOOD PEOPLE, DISHONEST FINANCIAL ADVICE: STANDING TALL ON THE TILTED TURF
6/8/2012

In the June 2012 Issue of the AAII Journal, AAII vice president Charles Rotblut and Duke University psychology and behavioral economics professor Dan Ariely discuss the interplay between psychology, dishonesty and investing. The discussion, based off Ariely's new book, "The (Honest) Truth About Dishonesty," examines how a bad incentive structure in the financial services sector can cause some people to embrace immoral work practices. Those who read the article will gain savvy and practical takeaways that will help them identify conflicts of interest when investing ...

TEACHING EMPLOYEES TO SAVE AND INVEST IN WORKPLACE PROGRAMS!
5/30/2012

How do you encourage employees to participate more fully in workplace saving and investing programs? The Investor Protection Trust (IPT) has joined with the Investor Protection Institute (IPI) to create a groundbreaking training program that addresses this question. Titled "Investor Education in Your Workplace," IPT and IPI are now running 10-week online training programs aimed at helping employees realize the benefits of savings programs within their workplaces. Tangible results have already been achieved within several pioneering states. Today, state securities agencies are being encouraged to register to participate in the Fall 2012 program series. More details can be found here ...

FRONTIER MARKETS: WHAT INVESTORS SHOULD KNOW
5/4/2012

Investors often tremble when considering "frontier markets"—a term coined in 1992 to describe a subset of small and illiquid emerging stock markets. Yet as CFA's David Larrabee spotlights, some of the most attractive opportunities for investors today can exist in frontier markets like Romania and sub-Saharan Africa. For investors looking for growth, frontier markets can deliver. They offer attractive risk-adjusted returns with low correlation to developed markets. As Larrabee argues, the notion that frontier markets are inhospitable investing outposts where corruption abounds is incomplete ...

INVESTING IN A LOW-INTEREST ENVIRONMENT
4/26/2012

In a low interest rate environment, investors face a dilemma: do they accept a low investment return in order to protect their principal? Or do they take on greater investment risk and aim for a higher rate of return? The American Institute of Certified Public Accountants brainstormed this dilemma along with the other challenges investors face in today's low interest rate environment. Those efforts were ultimately converted into this list - a collection of practical suggestions and tips that investors can implement as they navigate through today's challenging low interest rate environment ...

INVESTOR EDUCATION – THE CHICAGO WAY
4/20/2012

On Wednesday, April 25, NFA will join other regulatory and enforcement agencies at a Financial Regulators Fair at the State of Illinois Building, Thompson Center in coordination with Money Smart Week. Representatives from twelve agencies, including the Commodity Futures Trading Commission (CFTC), Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC) will distribute information on financial protection, banking, credit and investing. The event will run from 10:00 a.m. to 2:00 p.m. CDT. For more information about Money Smart Week visit: http://www.moneysmartweek.org/Chicago ...

GENDER GAP ON FINANCIAL LITERACY?
4/13/2012

Women consistently score lower than men on measures of financial literacy, a new study from the FINRA foundation found. According to the new research, women were five percentage points more likely to carry a balance, four points more likely to pay the minimum payment on their cards and six points more likely to be charged late fees. These findings suggest that increasing financial literacy among women and men may be a fruitful means of improving credit card behavior and reducing or eliminating gender-based differences in credit card behavior ...

PROTECTING FINANCIAL CONSUMERS
3/8/2012

The Federal Trade Commission and more than 30 other federal agencies, consumer groups and national advocacy organizations, in conjunction with state, county, and local government agencies, are participating in National Consumer Protection Week, March 4-10, 2012. National Consumer Protection Week is a coordinated campaign to focus attention on the importance of consumer information and provide people with free resources explaining their rights in the marketplace. David Vladeck, Director of the FTC's Bureau of Consumer Protection, noted the campaign's website, NCPW.gov, available in English and Spanish, hosts a variety of resources on topics that matter to the nation's consumers. Finance and investing resources include protecting yourself and your finances from online predators, checking out your broker and financial advisor, avoiding investment fraud, financial planning and saving for retirement ...

PERSONAL FINANCE: A MILITARY FAMILY "FIELD MANUAL"
3/1/2012

More than 800,000 copies of the second edition of the "Financial Field Manual: The Personal Finance Guide for Military Families" have been distributed on military bases around the world and directly by state securities agencies, under a partnership of the Investor Protection Trust (IPT), the Investor Protection Institute (IPI), the Council of Better Business Bureaus (CBBB) and Kiplinger's Personal Finance Magazine. The guide focuses on the key issues that can help military families make informed investing decisions, protect their money and their families, and take charge of their financial lives. The first round of print copies has been distributed directly to military bases in the U.S. and around the world and 29 states and the District of Columbia are also using copies as part of education programs with service members and their families in their states ...

YOUR FINANCIAL SECURITY: SAVING AND INVESING
2/22/2012

It's America Saves Week so there is no better time to educate yourself about saving and investing. Knowing how to secure your financial well-being is one of the most important things you'll ever need in life. You just need to know a few basics, form a plan, and be ready to stick to it. No matter how much or little money you have, the important thing is to educate yourself about your opportunities. If you get the facts about saving and investing and follow through with an intelligent plan, you should be able to gain financial security over the years and enjoy the benefits of managing your money. The Securities and Exchange Commission's "Saving and Investing - A Roadmap To Your Financial Security Through Saving and Investing" is a great place to get started ...

TAXES AND YOUR RETIREMENT
2/15/2012

As U.S. policymakers consider tax policy and how to resolve federal budget deficits, more than eight in 10 U.S. households believe the current tax incentives to encourage retirement saving should be preserved, according to new research released by the Investment Company Institute (ICI). The research is based on data collected in a survey of 3,000 U.S. households in November and December 2011. The ICI study-America's Commitment to Retirement Security: Investor Attitudes and Actions-found that such agreement was consistently high across various demographic and financial characteristics. Households were asked their views on changing the tax incentives for retirement plans and whether saving incentives for retirement should be a national priority. Respondents were also asked about their views on retirement plan saving and their confidence in 401(k) and other DC plan accounts

ETFs AND MUTUAL FUNDS: WHAT'S THE DIFFERENCE?
2/9/2012

Exchange-traded funds (ETFs) are America's "financial idol" at the moment, getting more financial press than just about any other financial product. Even Vanguard, the bastion of the mutual fund, is rolling out ETFs. No wonder individual investors have their interest piqued. So what do ETFs have that mutual funds don't and vice versa? The American Association of Individual Investors outlines the differences between ETFs and mutual funds but also says, at the end for the day, they are interchangeable. Investors should concentrate on creating a diversified portfolio and applying appropriate portfolio weightings for the individual's time horizon, risk tolerance and portfolio goals. And then turn to either mutual funds, ETFs, or a combination of the two ...

HACKING YOUR INVESTMENTS
1/31/2012

Anyone who has experienced an email account intrusion or "hacking" knows how frustrating it can be to deal with the aftermath. In the most serious cases, a compromised email account can lead not only to identity theft, but also to theft of your money. That's why one of the most important first steps you should take if your email account has been hacked is to notify your brokerage firm and other financial institutions. FINRA has received an increasing number of reports involving investor funds being stolen by fraudsters who first gain access to the investor's email account and then email instructions to the firm to transfer money out of the brokerage account. FINRA has issued an Investor Alert to warn investors about the potential financial consequences of a compromised email account and to provide tips for safeguarding your assets ...

INVESTING AND YOUR TAXES
1/24/2012

As the W-2s and various tax documents start rolling in ahead of the April filing deadline, how much do you know about the U.S. federal income tax rules that affect your investments in various financial instruments, including stocks, bonds, options and futures contracts? The Options Industry Council has updated their booklet, "Taxes and Investing: A Guide for the Individual Investor" just in time for the 2012 tax season. The summary provided is for general information purposes only and is not intended to address any individual investment or tax situation so you should still consult a professional for more information ...

LEARNING WHEN TO SELL
1/17/2012

As usual, no one "rang the bell" when the 2002–2007 bull market topped out in October/November a year back. Thus, from where we stand now, it would seem somewhat lame to say 'these are the reasons you should have lightened up long before the recent meltdown.' So what should you do in and after a severe bear market if you are investing your own portfolio of individual stocks? The American Association of Individual Investors offers guidelines on when to sell. First and foremost, you should keep in mind a few selling guidelines that should be used in normal times. If you have built your individual stock portfolio in a disciplined manner, and you have made sales in a disciplined manner, you should have a relatively solid core portfolio of high-quality issues that have continued to perform fundamentally ...

FINDING A "FINANCIAL BUDDY"
1/10/2012

New Year's resolutions are notoriously tough to keep, especially when they relate to your finances. But recruiting a "financial buddy" who will provide you support and keep you accountable can help you accomplish your goals this year. A financial buddy can be anyone—a parent, a spouse, a friend, a co-worker. Whomever you consider, make sure that person has certain qualities. It should be someone you trust, who will set a good example and who will keep you honest. Once you have selected your buddy, work together to create long-term plans for both of you. The plans should have specific and measurable goals that are realistic. Once you have created a plan, keep tabs on each other. NEFE's SmartAboutMoney provides more insight into how a buddy can help ...

401(k) INVESTING: STOCKS STILL HOT
1/4/2012

After a decade marked by two severe bear markets, 401(k) plan participants have adopted a more balanced approach to their portfolios, according to a report released today by the Investment Company Institute (ICI) and the Employee Benefit Research Institute (EBRI). Fears that younger participants in 401(k) plans would abandon stock investing are not borne out by the data, which suggest that greater use of target date funds is helping workers keep their investing on track. The shares of 401(k) participants who had either no equities at all or high concentrations of equities were lower in 2010 than in 2000 for almost every age group, according to the EBRI/ICI report, 401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2010 ...

GROWING GROUP: "NEVER RETIREES"
12/21/2011

Not only are older American workers (age 50 and over) expecting to work longer, but many now say they expect to never retire, according to the nonpartisan Employee Benefit Research Institute (EBRI). Data suggest the trend may be tied to the recent economic recession. In 2006 (just before the recent recession), 11.2 percent of workers age 50 or over expected to retire at age 70, but by 2010 (after it had officially ended) that had increased to 14.8 percent. The EBRI report notes that while the rising age of expected retirement may reflect a growing awareness of economic and fiscal reality among Americans workers (especially at a time of rising longevity), other research by EBRI indicates many of them will be unable to actually work longer ...

SOCIAL NETWORKING AND INVESTMENT FRAUD
12/15/2011

Social networking in the Internet age allows people to connect to one anothermore quickly and easily than ever before. Investment promoters increasingly are logging on to find investors … and their money. While social networking helps connect people with others who share similar interests or views, con artists infiltrate these social networks looking for victims. By joining and actively participating in a social network or community, the con artist builds credibility and gains the trust of other members of the group. In online social networks, a con artist can establish this trust and credibility more quickly than in traditional social networks. Online investment fraud has many of the same characteristics as offline investment fraud. To protect yourself from fraud in social networking, check out this primer from the North American Securities Administrators Association (NASAA) ...

INVESTING 101: GETTING STARTED
12/6/2011

Are you a recent college graduate looking to start an investment portfolio and want to learn more but don't know where to start? Have you been saving for a few years and built up a good cushion and now want to start investing? Are you nearing retirement age and want to make sure you have everything in place for your golden years? The nonprofit, 21-member Alliance for Investor Education (AIE) is making available a major new resource today which highlights 10 of the best Web-based resources for consumers looking to "step up their game" when it comes to investing. The Alliance's new "Investing 101: Getting Started" is available now ...

MAKING THE MOST OF YOUR PORTFOLIO
11/29/2011

Modern portfolio theory (MPT) introduced the concept of portfolio efficiency, which focuses on the portfolio as a whole and how the individual holdings interrelate. Through proper diversification, risky assets can be combined in a portfolio to achieve higher returns without taking on additional risk, or to reduce risk in a portfolio without reducing return. The key is selecting portfolio components that work together in combination to achieve this. Portfolio optimizers help in this analysis. They are basically asset allocation models that help you select the right combination of investment vehicles that will maximize your return while minimizing your risk. Where on the Web can you go to find these tools? The American Association of Individual Investors (AAII) created a list with several current sources for asset allocation advice found on the Web ...



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