Easter is a time of celebration and hope. Not the kind of hope we were sold in the 2008 Presidential election, or last week in the Mega Lottery; but hope for the future of mankind for eternity.
Below are some great posts that provide hope for our financial futures if we are willing to learn and educate ourselves:
Kurt Fischer at Money Counselor submitted Should Humans Buy and Hold? Can an investment strategy work in practice that requires regular decision-making and market assessments from an inescapably emotion-laden human with his or her own money at stake? Would a rigorous implementation of a “tactical asset allocation” help me exile emotion from investment decisions? Or should I stick with a buy and hold strategy?
[Editor’s Note: The AAAMP uses a tactical asset allocation strategy and the AAAMP blog and my premium service are available to help those who want to implement this risk-adverse strategy. Kurt has accepted my offer for a subscription to my Premium Service.]
Karl at Cult Of Money presents A Late Payment Scare, P2P Update. After logging into my Prosper account the other day, I noticed that the status on one of my loans has a funny color next to it I haven’t seen before. I investigated to see that one of my loans is now considered late in the 1-15 day range. I don’t like this.
[Editor’s Note: I see many blog posts espousing the returns of Peer-to-Peer Lending. These loans are the equivalent of junk bonds on the risk scale. They are high risk unsecured loans with a very short history of what can happen in an economic downturn. Invest with caution and knowledge of the amount of risk you are taking!]
Asset Allocation and Diversification
2 Cents at Balance Junkie gives us Eggs, Baskets, and Diversification. As market correlations rise, it’s becoming more difficult to properly diversify your investment portfolio. A new study by Morningstar crunches the numbers for us.
Geoffrey at Financial Highway submitted Fixed Income ETFs. Fixed income Exchange Traded Funds (ETFs) are a solution available to all investors. Typically, these funds have lower management expense ratios (MERs) and have no minimum purchase amount.
Darrow Kirkpatrick at Can I Retire yet? Presents How Much is Too Much in a Single Investment? There probably is no definite answer, without modeling all the details of an individual situation. But there is a lot that can be said on the larger topic of what is adequate diversification. One way to answer the question is to look at the historical standard deviation in returns and ask yourself whether you can live with the volatility. Also, consider the possibility of a total loss. If I were to concentrate in a single type of investment, it would need a few key qualities…
Specific Investment Ideas
Shailesh Kumar at Value Stock Guide gives us 5 Stocks to Buy for Rapid Book Value Growth. These 5 companies have grown their book value rapidly in the last 5 years, at the time when most businesses were struggling to maintain their revenues and profits. Often this represents good management and some competitive advantage that is of interest to a value investor.
Dividend Growth Investor presents AT&T (T) Dividend Stock Analysis. AT&T (T), together with its subsidiaries, provides telecommunications services to customers, businesses, and other providers worldwide. This dividend aristocrat has paid uninterrupted dividends on its common stock since 1984 and increased payments for 28 consecutive years.
Mich at Beating The Index submitted Parallel Energy Trust: Post Acquisition Dividend Sustainability Analysis. Parallel Energy Trust announced the acquisition of the remaining 41% interest in the West Panhandle Field increasing the monthly dividend from $0.075 to 0.08 per share. However, before you get carried away with the extra money you will be pocketing every month, let’s take a quick look at the sustainability of this distribution.
Investment Planning Strategies
Peter Anderson at Bible Money Matters gives us How to Rollover Your 401(k) to a Roth IRA. One thing a lot of people don’t realize is that once you leave a job you can convert an old 401k directly to a Roth IRA. Here are the rules and how to go about it.
Boomer at Boomer and Echo submitted A Lifetime Plan For Managing Your Money. As your life changes, so do your money needs. Here’s a money plan you can use every step of the way.
Matt at RamblingFever Money submitted Investing 101: A Magic Concept That Grows Money. This is one of the most important life lessons that should be taught to everyone concerning finance, money, or investing. If fact, I feel so strongly about this that I think it should be mandatory that everybody learn this. Ideally, this would be required learning for every single student before they graduate from high school.
Bob at Christian PF gives us 401k Hardship Distributions: What You Need to Know. Hopefully you will never need to learn about 401k hardship distributions, but what happens when you really need the money? Unless you meet a “qualified event” you might not be able to take a distribution from your 401k at all….
Glen at Parenting Family Money submitted Opening a Roth IRA For a Child – Help Your Child Get Ahead in Retirement. Opening a Roth IRA for a child is a great way to get them started investing as well as starting them saving for retirement. There are other great reasons as well.
MMD at My Money Design presents Which is Better – Term or Permanent Life Insurance? – Part 2. Should you buy cheaper Term insurance or the more expensive permanent insurance that is guaranteed for life? Let me share with you two real quotes I received, and we’ll crunch the numbers to figure out which one is the better alternative.
[Editor’s Note: It is the policy of this carnival to reject Insurance posts. I have made an exception for this article because the conclusion is insurance and investing activities should be separated. Insurance is a transfer of risk, not investing; don’t mix the two!]
Premo Sewnuman at MoneyCrashers gives us How to Buy Stocks Online Without a Broker – Direct Stock Purchase Plans. Do high brokerage costs deter you from investing in stocks of financially stable, profitable companies? Believe it or not, stocks in some of America’s most profitable companies can be bought without opening a brokerage account – in other words, sans commissions – thereby enabling you to keep more of your hard earned money.
Paul at Make Money Make Cents presents What Goes Up, Must Come Down. Here’s a little insight to the current bull market and why it may be smart to be a little cautious.
[Editor’s Note: This is the kind of critical contrarian thinking most investors miss at their peril.]
My Own Advisor presents April Update – 2012 Personal Finance and Investing Goals. Everyone has priorities and goals and I’m sure many people are executing on them better than we are. We’re still learning how to be more effective with our hard-earned monies but no doubt this goal-setting and goal-monitoring activity via my blog is a great enabler.
From the AAAMP Blog I have added Different Types of Cash Flow for Investment Analysis. The many different types of cash flow can be confusing. Here is a summary and description of the important types of cash flow for investment analysis.