Type in the keyword(s) to search for and click the SEARCH button. |
• Investing 101: 10 of the Best Resources to "Stepping Up Your Game" as an Investor |
Sign up for email updates about new investor education content from AIE members. Unsubscribe from AIE List. |
|
|
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 ...
INVESTOR PODCAST: UNDERSTANDING “PRINCIPAL PROTECTION”
11/15/2011
The retail market for structured notes with principal protection has been growing in recent years. While these products often have reassuring names that include some variant of "principal protection," "capital guarantee," "absolute return," "minimum return" or similar terms, they are not risk-free. Any promise to repay some or all of the money you invest will depend on the creditworthiness of the issuer of the note-meaning you could lose all of your money if the issuer of your note goes bankrupt. Also, some of these products have conditions to the protection or offer only partial protection, so you could lose principal even if the issuer does not go bankrupt. To learn more about structured notes with principal protection and the risks that come with them, check out a new podcast from FINRA ..
INVESTOR ALERT: INVESTMENT SEMINAR FRAUD
11/8/2011
The Securities and Exchange Commission (SEC) Office of Investor Education and Advocacy issued an investor alert to warn investors of potential fraud they may encounter at investment seminars that purport to teach investors trading strategies that will allow them quickly and easily to make money trading securities. In particular, SEC staff warns that some trading seminar promoters may use misleading or untrue statements to lull investors into purchasing expensive products such as trading software or classes. Investors should be prepared to recognize and avoid some of the potential fraudulent conduct they may encounter at investment seminars that purport to teach investors how to trade securities. The alert includes specific signs to look out for that may indicate a seminar is a fraud and tips on how to avoid seminar fraud ...
FIGHTING BACK AGAINST ELDER FINANCIAL ABUSE
11/1/2011
One out of every five citizens over the age of 65 have been victimized by a financial swindle. Of particular concern are seniors with mild cognitive impairment (MCI) who can perform most daily functions, but have trouble or become confused when it comes to managing their finances. Do you have questions about how to secure your family's financial future, about mild cognitive impairment (MCI) that can impact an older person's ability to make wise and safe financial decisions, or about elder financial abuse and strategies for keeping yourself or your older loved ones independent? The Investor Protection Trust, with support from Kiplinger's, the Financial Planning Association, National Adult Protective Services Association and health care professionals will be available by phone between 9 a.m.-6 p.m. EST/6 a.m.-3 p.m. PST on November 10, 2011 to answer your questions ...
FINANCIAL EDUCATION: AGE-SPECIFIC TIPS
10/25/2011
Children are constantly exposed to material goods and financial transactions, and without a proper explanation of the basics, they can grow up without a clear understanding of the value of money and how to use it. SmartAboutMoney.org, a project of the National Endowment for Financial Education, offers age-specific tips for teaching your child about spending, saving, and money management in practical ways. They start with introducing different coins to your child and playing store with them between ages 2 and 4, to establishing an allowance and chores your child is responsible for completing to earn the allowance between ages 5 and 7, to going over household expenses and explaining how you earn money between ages 8 and 10 and taking your teen to set up a savings account at a bank ...
INVESTOR ALERT: SELF-DIRECTED IRA RISKS
10/19/2011
The SEC's Office of Investor Education and Advocacy (OIEA) and the North American Securities Administrators Association (NASAA) are issuing this Investor Alert to warn investors of the potential risks associated with investing through self-directed Individual Retirement Accounts (self-directed IRAs). NASAA has noted a recent increase in reports or complaints of fraudulent investment schemes that utilized a self-directed IRA as a key feature. State securities regulators have investigated numerous cases where a self-directed IRA was used in an attempt to lend credibility to a fraudulent scheme. Similarly, the SEC has brought numerous cases in which promoters of fraudulent schemes steered investors to self-directed IRAs. While self-directed IRAs can be a safe way to invest retirement funds, investors should be mindful of potential fraudulent schemes when considering a self-directed IRA ...
SHOULD YOU CONVERT TO A ROTH IRA?
10/12/2011
The New Year removes a key restriction for many individuals-the ability to convert pretax funds to a Roth IRA. Prior to January 1, 2010, only taxpayers who met certain income requirements were allowed to convert funds in a tax-deferred account (e.g., traditional IRA, 401(k), 403(b), 457, SEP-IRA) into a Roth IRA. Now this restriction has been removed. Since you will still have to report the converted funds as income and pay the associated taxes, you need to consider whether converting funds to a Roth IRA is beneficial for your particular financial situation. Investors need to compare the marginal tax rate in the conversion year with the marginal tax rate in the withdrawal year. Check out the details of what you need to knew in a recent American Association of Individual Investors article ...
UNDERSTANDING “NON-TRADED REITS”
10/5/2011
Turbulence in the stock market and an extended period of low interest rates have contributed to investors seeking products offering attractive yields. One such product is the publicly registered non-exchange traded real estate investment trust (REIT) or "non-traded REIT" for short. While non-traded REITs and exchange-traded REITs share many features in common, they differ in several key respects. Most significantly, as the name implies, shares of non-traded REITs do not trade on a national securities exchange. For this reason, non-traded REITs are generally illiquid, often for periods of eight years or more. Early redemption of shares is often very limited, and fees associated with the sale of these products can be high and erode total return. FINRA has issued an alert to inform investors of the features and risks of publicly registered non-exchange traded REITs ...
TARGET DATE FUNDS AND RETIREMENT
9/28/2011
People in self-directed 401(k)-type retirement plans who direct all of their money to target-date funds (TDFs) are likely to keep this allocation over time, according to a new analysis by the nonpartisan Employee Benefit Research Institute (EBRI). Using data from the EBRI/ICI 401(k) database, EBRI finds that participants who allocate all of their account to TDFs are likely to stay with them. EBRI also found that participants who stayed at a 100-percent TDF allocation and were between the ages of 30ᇅ were more likely to stick with an all-TDF investment than those younger or older. A TDF is an investment that automatically resets the asset mix in its portfolio according to a predetermined path over a selected time frame, typically until a year at or near which it would be expected for a participant to retire ...
UNDERSTANDING HIGH-RISK INVESTMENTS
9/14/2011
When entering the world of investing, individuals need to understand that there is real risk involved. Sometimes an opportunity comes along that offers a high rate of return on your investment and sounds like a good prospect. How do you differentiate between a legitimate high-risk investment and a scam that may be appealing to your greed or playing on your fears? The nonprofit, 19-member Alliance for Investor Education (AIE) is making available a major new resource today which highlights 12 of the best Web-based resources for investors to learn what they need to know before putting money into high-risk investments. The Alliance's new " Understanding High Risk Investments - What Investors Need To Know To Invest Safely and Wisely" is available now ...
FIGHTING BACK AGAINST ELDER FINANCIAL ABUSE
9/9/2011
One out of every five citizens over the age of 65 have been victimized by a financial swindle. Of particular concern are seniors with mild cognitive impairment (MCI) who can perform most daily functions, but have trouble or become confused when it comes to managing their finances. Do you have questions about how to secure your family's financial future, about mild cognitive impairment (MCI) that can impact an older person's ability to make wise and safe financial decisions, or about elder financial abuse and strategies for keeping yourself or your older loved ones independent? With support from the Investor Protection Trust and Kiplinger's, members of the Financial Planning Association, National Adult Protective Services Association and health care professionals will be available by phone between 9 a.m.-6 p.m. EST/6 a.m.-3 p.m. PST on November 10, 2011 to answer your questions ...
BEWARE OF GOLD STOCK SCAMS
8/31/2011
The Financial Industry Regulatory Authority (FINRA) issued a new Investor Alert called "Gold" Stocks-Some Investments Mine Your Pocketbook to warn investors about investment scams that promote gold stocks and to provide information on how to invest in legitimate gold investments. With the price of gold bullion at record levels, there has been a proliferation of blogs, websites, YouTube videos and Tweets centered on investing in gold. And while there are legitimate gold investments discussed online, FINRA is concerned that some investors may fall prey to gold-related investment scams. These gold scams may center on inflated claims regarding the stocks of gold mining companies whose stock value is often based on gold reserves that are difficult to estimate, much less verify ...
TOP INVESTOR TRAPS
8/23/2011
The North American Securities Administrators Association (NASAA) released its annual list of financial products and practices that threaten to trap unwary investors, many by taking advantage of investors troubled by lingering economic uncertainty and volatile stock markets. "Con artists follow the news and seek ways to exploit the headlines to their advantage while leaving investors holding an empty bag," said David Massey, NASAA President and North Carolina Deputy Securities Administrator. Massey said headline-related investor complaints reaching state and provincial securities regulators include questionable claims, such as: "Realize safety and appreciation in gold;" "Wave energy: the future to power our homes;" "Synthetic fuels take the oilman out of our pockets;" and "Invest in foreclosed homes, help others and make a fortune!" ...
FINANCIAL FRAUD PREVENTION
8/17/2011
Stanford University's Center on Longevity and the FINRA Investor Education Foundation have joined together to launch the Research Center on the Prevention of Financial Fraud, an interdisciplinary resource for law enforcement, government and research groups studying financial fraud. Financial fraud, ranging from Ponzi schemes to online phishing scams and work from home schemes, swindles Americans out of billions of dollars each year. While emerging technologies continue to fuel the expansion and reach of financial fraud, this joint initiative will support and consolidate scientific research and connect this research to practical prevention and detection efforts. The Research Center's inaugural conference, The State and Future of Financial Fraud, will take place November 3 - 4, 2011, at the Sofitel in Washington, D.C. The conference will bring together experts to discuss implications of the latest research and programs that successfully arm consumers against fraudulent tactics ...
ANALYZING EXCHANGE-TRADED OPTIONS
8/3/2011
Exchange-traded options are incredibly versatile and can be used to meet a variety of goals. Options can be used conservatively to hedge risk, or target income, or for those with a larger appetite for risk, to speculate. Most importantly, options are very flexible and investors can tailor their unique risk and reward goals and tolerances to fit their individual needs. Which options strategy is best? Simply stated, there is no clear-cut answer because the options strategy that is best for one investor may not be the best choice for another. However, it is possible to analyze the performance of different options strategies. In order to conduct this analysis, it is important to understand options pricing and the concept of implied volatility and options skew. The Options Industry Council can help you determine what options strategy may be right for you ...
INVESTOR ALERT: HIGH YIELD RISKS
7/27/2011
Investors currently find themselves in a difficult investing environment. Yields on fixed-income investments are at historically low levels, and stock returns have been quite volatile. Some investors are "chasing return," meaning they are putting their assets into riskier and sometimes esoteric products that promise higher yields and returns than they can obtain in more traditional investments. FINRA has issued an alert because investors may not realize that they could be taking on more risk if they invest in products with higher returns. The alert discusses different ways investors are trying to increase their return-ranging from easily understood investments like high-yield bonds to complex vehicles like structured products and floating-rate loan funds. The alert also reminds investors that when they invest in products that promise higher returns they are nearly always taking on more risk ...
401(k) KEY TO RETIREMENT SAVINGS
7/20/2011
If you can't afford to retire at 65, how long after that will you have to work before you have enough money? A new analysis by the nonpartisan Employee Benefit Research Institute (EBRI) finds that for many people, it could be a very long time-for lower-income workers especially, well into their 70s. But EBRI finds the biggest positive difference for those who keep working is if they also continue to contribute to a 401(k)-type retirement plan at work, as that keeps wages coming in while simultaneously increasing retirement savings. The analysis uses data from EBRI's Retirement Security Projection Model® (RSPM). Not surprisingly, income makes a big difference-but results show that even some high-income workers will not have enough money in retirement to ensure basic retirement costs are covered ...
RISK-FREE ASSETS AND YOUR PORTFOLIO
7/13/2011
What is a risk-free asset, and what role should it play in your portfolio? In today's market environment, the sudden and steep drop in the stock market as well as anxiety over the future of the banking industry and the financial health of long-term bond issuers have all caused a massive rush to-and an exclusive focus on-"risk-free" assets. Yet only a few years ago, these assets appeared "boring" to many investors who-at that time-were focused on the long-term return and current income attributes of the major asset classes (stocks, bonds and cash).But neither of those perspectives produces a useful guideline. Instead, the role these assets play in your portfolio should be based on a perspective that encompasses both long-term and short-term considerations. The American Association of Individual Investors (AAII) offers guidance for investors considering this asset allocation question ...
YOUR 401(k) AND STOCK MUTUAL FUNDS
7/7/2011
401(k) plan participants invested in stock mutual funds on average paid lower expense ratios in 2010, according to an annual report by the Investment Company Institute that examines the economics of providing 401(k) plans and the average expense ratios of mutual funds held in 401(k) plans. At year-end 2010, $1.8 trillion, or more than half, of the $3.1 trillion in 401(k) assets was invested in mutual funds, primarily in stock funds. The Economics of Providing 401(k) Plans: Services, Fees and Expenses, 2010 finds that the expense ratios paid by 401(k) plan investors on their stock funds averaged slightly lower in 2010, compared with 2009. The asset-weighted average expense ratio paid by 401(k) investors on their stock funds dropped 3 basis points to 0.71 percent in 2010, after having declined in three of the previous five years ...
CAUTION ISSUED ON ETFs
6/30/2011
Exchange-traded funds (ETFs) have grown increasingly popular with retail investors during the last decade. Some securities regulators are now concerned that investors may not understand how these complex investment products work or the potential risks they may face. The North American Securities Administrators Association (NASAA) cautioned investors this week to make sure they understand ETFs before they invest and consider whether these investments are right for them. Exchange-traded funds are baskets of investments such as stocks, bonds, commodities, currencies, options, swaps, futures contracts and other derivative instruments that are created to mimic the performance of an underlying index or sector. While ETFs are often compared to mutual funds and marketed to investors seeking safe, stable investments, not all ETFs are the same. NASAA's advisory notes that some traditional ETFs may be appropriate for long-term holders, but others may require daily monitoring ...
INVESTOR ALERT: WATCH OUT FOR NEW PHISHING SCAM
6/22/2011
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 today to consumers who are contacted by individuals falsely claiming to represent SIPC when asking for personal information or payments in order to return funds lost in investment scams. SIPC officials said they have been contacted by several individuals alerting them to this scam, some of whom have lost money in the past to investment scams or were contacted by promoters of such schemes and then declined to invest. In cases where an individual had lost money in the past to a fraudulent investment, they were contacted by email or phone and asked to pay a fee up-front to recover their lost money ...
PROTECTING OLDER AMERICANS FROM INVESTMENT FRAUD
6/15/2011
How can older investors protect their nest eggs from investment fraudsters? If you have parents or grandparents who are at or near retirement age, have you talked to them about the danger of financial swindles? What do older investors need to know in general about spotting and avoiding investment fraud? Since older Americans are often targeted for financial scammers due to the nest eggs they have accumulated, they and their family members need to be particularly aware of the red flags signaling a fraudster. The nonprofit, 20-member Alliance for Investor Education (AIE) is making available a major new resource today which highlights 10 of the best Web-based resources for older investors and their family members about how to spot and protect themselves from investment fraud. The Alliance's new " Older Americans & Investment Fraud: Protecting Yourself, Protecting Your Loved Ones" is available now ...
KNOW YOUR RISK: STRUCTURED NOTES WITH PRINCIPAL PROTECTION
6/8/2011
The Securities and Exchange Commission's (SEC) Office of Investor Education and Advocacy and the Financial Industry Regulatory Authority (FINRA) have issued an investor alert called "Structured Notes with Principal Protection: Note the Terms of Your Investment" to educate investors about the risks of structured notes with principal protection, and to help them understand how these complex financial products work. The retail market for these notes has grown in recent years, and while these structured products have reassuring names, they are not risk-free. Structured notes with principal protection typically combine a zero-coupon bond - which pays no interest until the bond matures - with an option or other derivative product whose payoff is linked to an underlying asset, index or benchmark. The underlying asset, index or benchmark can vary widely ...
AVOID POST-GRAD MONEY MISTAKES
6/2/2011
Graduation is an important milestone that deserves to be celebrated. However, with it comes the responsibility of taking the reins of your financial future and independence. If you are graduating from college this year, have you thought about your plan to save and invest for your future? If you have secured a job, have you thought about how much you may want to set aside to purchase a car and, further in the future, buy a home? Committing certain common post-grad mistakes, detailed by SmartAboutMoney.org, a project of the National Endowment for Financial Education, could cause you to fall into old patterns where you rely on your parents again instead of getting on with your life ...
10 WAYS TO REACH YOUR RETIREMENT GOALS
5/18/2011
What's the key to making good investment choices? It isn't necessary to understand the inner workings of the securities markets or the mathematical economies underlying investment theory. Instead, 10 axioms of effective investing provide the critical cornerstone for guiding investment philosophy and making decisions. This will ensure that you meet the universal goal of creating of financial wealth for retirement. Unfortunately, these principles are easier to understand than to implement. For many individuals, it is easier to plan to save and invest next month rather than to begin immediately. However, visualizing the peace of mind and security that comes with maintaining a disciplined, successful savings program can help you get started. The American Association for Individual Investors offers these basic concepts to reach your retirement goals ...
PUBLIC FORUM ON SIPC MODERNIZATION
5/11/2011
The Securities Investor Protection Corporation (SIPC), which maintains a special reserve fund mandated by Congress to protect the customers of insolvent brokerage firms, announced today that the SIPC Modernization Task Force will hold a live, in-person forum from 1 p.m. EDT to 4 p.m. EDT on June 1, 2011 at the Grand Hyatt New York, 109 East 42nd Street at Grand Central Terminal. The purpose of the forum is to allow members of the public to offer their thoughts to the Task Force. This will be an opportunity for the SIPC Modernization Task Force to hear the views of the public on ways to improve the mission and operations of SIPC. The Task Force will not be providing information or answering questions at this forum, which will be devoted to soliciting public input ...
RECOVERING LOSSES AFTER FRAUD
5/4/2011
There are a number of ways that investors who have been defrauded may recover some of their financial losses, depending on the circumstances. The Securities and Exchange Commission is authorized by Congress to seek a number of remedies from those who commit fraud. The cases the Commission brings against individuals and companies are all civil or administrative matters - that is, the SEC sues alleged wrongdoers for violations of securities law in federal court or in front of a federal administrative law judge and seeks to obtain remedies, including civil money penalties, disgorgement of ill-gotten gains, injunctions prohibiting future violations of the law, and officer and director bars. If you'd like to see the various methods you may be able to use in recovering funds, check out this information provided by the SEC ...
RETIREMENT: HOW MUCH DO YOU NEED?
4/27/2011
How many workers calculate what they need for a comfortable retirement? And what are their savings goals? According to the Employee Benefit Research Institute's 2011 Retirement Confidence Survey (RCS), a majority of workers have not tried to do a calculation, which means many are unaware of how much they need to save for retirement. Not surprisingly, workers who have done a retirement savings needs calculation tend to have higher savings goals than workers who have not. Less than half of workers (42 percent) report they have tried to calculate how much money they will need to have saved by the time they retire so that they can live comfortably. Among those who have done a calculation, 25 percent estimate they need to accumulate at least $1 million for retirement ...
WATCH OUT FOR PRE-IPO SCAMS
4/20/2011
It's no secret that when a promising company emerges or an industry sector becomes "hot," investors typically flock to get a piece of the action. But what happens when the company is privately held and investors can't readily buy shares because the company has not conducted an initial public offering of its stock? Investor demand for shares of the private stock of high-profile social media companies-such as Facebook, Groupon, and Twitter-has been surging recently. But social media has also become the latest hook on which con artists can hang a scam. In this case, fraudsters dangle the promise of wealth from the sale of "pre-IPO" shares. FINRA has issued and investor alert to warn investors about pre-IPO scams purporting to offer access to shares of Facebook and other popular, well known private companies ...
10 AXIOMS OF EFFECTIVE INVESTING
4/13/2011
What's the key to making good investment choices? It isn't necessary to understand the inner workings of the securities markets or the mathematical economies underlying investment theory. Instead, 10 axioms of effective investing provide the critical cornerstone for guiding investment philosophy and making decisions. This will ensure that you meet the universal goal of creating financial wealth for retirement. Unfortunately, these principles are easier to understand than to implement. For many individuals, it is easier to plan to save and invest next month rather than to begin immediately. However, visualizing the peace of mind and security that comes with maintaining a disciplined, successful savings program can help you get started. A recent article from the American Association of Individual Investors details these 10 axioms ...
401(K)s AFTER THE FINANCIAL CRISIS
4/7/2011
401(k) balances typically fluctuate with market returns from year to year, as vividly demonstrated by the recovery from one of the worst bear markets for stocks since the Great Depression. However, 91 percent of 401(k) participants with account balances at the end of 2007 through 2009 are estimated to have more money in their 401(k) accounts on March 1, 2011, than they had at the pre-recession market peak in October 2007. This overall percentage varies significantly by age and tenure with the current employer. Regardless of age, more than 90 percent of those with less than 10 years of tenure today are back to their October 2007 balances. For more post-crisis assessment of 401(k)s, check out Employee Benefit Research Institute (EBRI) Research Director Jack VanDerhei's article ...
TIMELY TAX TIME TIPS
3/30/2011
Although the traditional tax season is soon drawing to a close, it's never too late for Americans to improve financial capabilities. The Financial Industry Regulatory Authority (FINRA) Investor Education Foundation recently released Take Control of Your Financial Future: Tips to Think About at Tax Time and Beyond, which provides consumers with helpful advice on avoiding financial pitfalls and getting their finances on the right track. The financial tips in Take Control of Your Financial Future are based on the findings of the FINRA Foundation's State-by-State Financial Capability Survey. "Many families use tax time to take stock of their finances. Using findings from the State-by-State Financial Capability Survey, we have identified concrete steps that people can take to gain control of their financial future," said FINRA Foundation President John Gannon ...
“TSUNAMI-PROOFING” YOUR FINANCES
3/23/2011
As the earthquake, tsunami and nuclear situation in Japan shows us, you can never be too prepared in case of a disaster. In addition to having supplies ready for take care of your family, having your financial house in order is essential. AICPA's 360 Degrees of Financial Literacy provides information and links to a disaster planning checklist and a guide to financial issues before and in the wake of a disaster. The checklist includes having your bank, credit card, brokerage and retirement account information assembled along with passports and insurance policy documents. The disaster recover guide to financial issues includes steps to take immediately following a disaster, what to do in the initial weeks and months, and how to begin planning again for the future to help you regain a sense of financial balance ...
RETIREMENT REALITY
3/17/2011
In a sign that Americans are recognizing the realities they face about their chances for a comfortable retirement, the 2011 Retirement Confidence Survey (RCS) from the Employee Benefit Research Institute finds workers are more pessimistic than at any time in the two decades the RCS has been conducted: More than a quarter (27 percent) of workers now say they are "not at all confident" about retirement. The survey also found that roughly a third of both workers and retirees said they had to dip into their savings last year to pay for basic expenses. Significantly, the RCS also found that those with retirement savings-such as a 401(k) or an individual retirement account (IRA)-were far less likely than those without these accounts to tap into their savings ....
TRADING 101
3/10/2011
The SEC's Office of Investor Education and Advocacy recently issued an Investor Bulletin to help educate investors about the different types of orders they can use to buy and sell stocks through a brokerage firm. It provides general descriptions of some of the common order types and trading instructions that investors may use to buy and sell stocks. Some of the order types and trading instructions described in the bulletin may not be available through all brokerage firms. Furthermore, some brokerage firms may offer additional order types and trading instructions not described in the bulletin. Investors should contact their brokerage firms to determine which types of orders and trading instructions are available for buying and selling stocks as well as their brokerage firms' specific policies regarding such available orders and trading instructions ...
TAXES AND INVESTING: WHAT YOU NEED TO KNOW
3/3/2011
Tax time is here! Are you looking to educate yourself on federal tax rules in the U.S that pertain to your investments? A booklet published by the Options Council Institute can help you learn about some of the basics. The "Taxes and Investing" booklet provides a summary of certain U.S. federal income tax rules affecting investments in various financial instruments, including stocks, bonds, options and futures contracts. There may be some special rules and exceptions are not discussed. In addition, specific tax rules may apply to your particular circumstances that are not specifically covered in the booklet, and material contained in the booklet may be affected by changes in law subsequent to publication. If you have any questions about your specific situation, please contact a tax professional or the IRS ...
MARRYING YOUR RETIREMENT PLANS
2/23/2011
Many employees think of their 401(k) plan allocations in isolation. But if you are married and your spouse works, you are both likely contributing to employee-sponsored plans. And if that is indeed the case, your allocation approaches should be "married" as well. After all, when you retire, you will be living off of both retirement plans as a couple, and following two separate approaches and two separate goals may result in neither goal being met. In addition, some 401(k) plans may offer better investment options than others. For that reason, married couples should coordinate their approach. What exactly is a coordinated approach? The American Association for Individual Investors (AAII) offers some pointers on how to marry the strategy and the options. The first step is to develop an asset allocation strategy for your combined savings ...
REACHING YOUR FINANCIAL GOALS THROUGH SAVING
2/16/2011
Have you been taking a good, hard look at the state of your family's nest egg and wondering how to grow it for the future? Are you a member of the military who just got married and wants to buy your own home in a few years, knows there are special programs available to you to purchase a home, and wants to put away enough money for a down payment? Savers and those who are looking to become savers can also now benefit from a major new resource being made available today from the nonprofit Alliance for Investor Education (AIE). AIE released its collection of the 10 best resources available from its members just as America Saves Week (www.americasavesweek.org) and Military Saves Week (www.militarysaves.org) start on February 20, 2011. "Building Wealth: Strategies and Best Resources to Reach Your Financial Goals Through Saving" is available now ...
FINANCES AND THE MATING GAME
2/10/2011
Chocolates, champagne, roses - time-honored tokens of love, but are they enough to persuade your Valentine to "be mine?" You might consider adding a balance sheet, income statement, and your credit score to the mix if you really want to convince that significant other that you are good relationship material. Finances may not be the most romantic of sweet-nothings to discuss but ignoring them can create big problems later in the relationship. Fighting over money is the number one source of relationship trouble among couples today, but this may be a relatively recent phenomenon. Couples may think there is little need to talk about money but financial disclosure as part of the mating game is an imperative. For some candlelight topics for true financial intimacy, see a recent article by the CFP Board's Consumer Advocate Eleanor Blayney ...
KNOW YOUR MONEY MARKET
2/2/2011
The Securities and Exchange Commission announced that investors can for the first time access detailed information that money market funds file with the Commission - including information about a fund's investments and the market-based price of its portfolio known as its "shadow NAV" (net asset value) or mark-to-market valuation. The information is available on the SEC's website and will be updated monthly. As part of its overhaul of money market fund regulation, the Commission last year adopted a rule requiring money market funds to file information about their holdings and portfolio valuations. "While the Commission uses this information in its real-time oversight of money market funds, we also believe that public disclosure can provide investors and market analysts with useful insight for their evaluation of these funds," said SEC Chairman Mary L. Schapiro ...
INVESTOR ALERT: PEER-TO-PEER LENDING RISKS
1/27/2011
A good loan can be hard to find, so borrowers and lenders increasingly are turning to the Internet. The North American Securities Administrators Association (NASAA) encourages investors to be mindful of the risks of online loan "matchmaking," also known as peer-to-peer lending, social lending, or P2P. "Peer-to-peer lending allows individuals and small businesses to receive loans that would be difficult or costly to obtain from traditional banks, while investors fund such loans based on the promise of a capital return," said NASAA President and North Carolina Deputy Securities Administrator David Massey. "Peer-to-peer lending is an emerging business model that is still in its infancy. There are several risks that investors should take into account before getting involved." NASAA issued an alert to help potential investors in peer-to-peer loans assess the risks of lending over the Internet ...
MONEY AND YOUR SPOUSE: DO YOU CHEAT?
1/19/2011
The National Endowment for Financial Education (NEFE), in cooperation with Forbes.com, commissioned an online poll conducted by Harris Interactive in December 2010, finding that 31 percent of people who combined finances with their significant other have been deceptive with their spouse or partner about money. The survey examines overall trust issues within couples who are combining or have combined their finances in a relationship, and describes the types of financial deceptions that are often committed-from hiding money, purchases and bank accounts to lying about the amount of debt owed or money earned. The survey also looks at what the impacts are or were on the relationship. "Money provides a potential conflict point in a relationship. But it also can be something that draws a couple closer," says Ted Beck, president and CEO of NEFE ...
FINANCIAL NEW YEAR’S RE-SOLUTIONS
1/12/2011
Every New Year, millions of Americans resolve to improve their lives. Unfortunately, many of these New Year's resolutions will fall by the wayside and by mid-month, they will have been forgotten. For those vowing to get their finances in order, Eleanor Blayney, CFP®, Consumer Advocate for Certified Financial Planner Board of Standards, Inc., has a solution for making sure financial to-do lists get done in 2011: start over and keep it simple. "The key to keeping financial New Year's resolutions is to apply the principle of 'little and often,'" said Blayney. "Grandiose goals need to be whittled down into goals with specific, actionable steps, and there must be a commitment to updating these new goals frequently." According to Blayney, the usual financial resolutions can be given new life as smaller, and more attainable "Re-Solutions" for 2011 ...
