Kevin Kroskey's Money & Mind

Walter Updegrave, in addition to being an award-winning journalist, speaker, author and senior editor of MONEY is a professional who truly understands the world of retail investing and communicates his thoughts in a manner meaningful to his readers. As an example, below is an excerpt from a recent   CNN Money release   based on a readers question “Should I hire a financial adviser to manage my retirement portfolio, and can I afford to?” “The answer depends largely on how comfortable you are going it alone -- and how good a job you think you could do overseeing your finances without help from a pro. Let's start with one key aspect of retirement planning: investing. As long as you're familiar with the concept of asset allocation and you're comfortable picking funds, you shouldn't have trouble building a diversified portfolio on your own. And you can get plenty of assistance short of hiring an adviser: These days most 401(k) plans provide tools to help you assess your in...

The excerpt below is from a keynote address gave in 2000 by "Uncle Milt" (or Milton Friedman as he's more commonly known). With all that is going on in Europe currently, it's not likely the question of whether the Euro is long-term sustainable will go away. --- "The euro is one of the few really new things we’ve had in the world in recent years. Never in history, to my knowledge, has there been a similar case in which you have a single central bank controlling politically independent countries. The gold standard was one in which individual countries adhered to a particular commodity—gold—and they were always free to break or to leave it, or to change the rate. Under the euro, that possibility is not there. For a country to break, it really has to break. It has to introduce a brand new currency of its own. I think the euro is in its honeymoon phase. I hope it succeeds, but I have very low expectations for it. I think that differences are going to accumula...

Predicting interest rate movements correctly is hard. Predicting them for a living is harder still. But getting it wrong is nowhere near as painful as the experience of those who lose their own money based on someone's forecast. A year ago, the Reuters news agency polled a group of people closer than just about any other community to those who actually decide rate movements. These were 16 money market dealers who do business directly with the US Federal Reserve. 1   The so-called primary dealers — banks or broker-dealers — are market makers for government securities. They consult directly with the US central bank and Treasury about funding the budget deficit and implementing monetary policy. So if you wanted an informed view about the interest rate outlook, these might be the people you would call on first, which is what Reuters did when it asked the dealers for their forecasts for Treasury bond yields three, six and 12 months ahead. Back in late September 2010, the dealers came ...

Will Congress pass it? What difference could it potentially make? On September 8, President Obama announced a new plan to improve the economy – the $447 billion American Jobs Act, a sequel of sorts to his past economic stimulus proposals. His announced goal: job creation without new taxation. What’s in this bill? The AJA would try to boost the economy through seven different tactics – extensions and expansions of tax breaks, and infusions of federal dollars. The current payroll tax holiday would be extended through the end of 2012. The payroll tax would fall to 3.1% - not only for workers, but also for businesses with payrolls of $5 million or less. Companies could get a tax credit as large as $4,000 for hiring the long-term unemployed (people who have been out of work for at least 6 months). Long-term jobless benefits would again be extended. $80 billion of federal money would be assigned to new infrastructure projects (highways, bridges and s...

I find that retirees often have erroneous beliefs of Social Security and are blind to planning opportunities in claiming their benefits. Elaine Floyd, CFP is one of the foremost experts on Social Security planning within the financial planning community. In a recent newsletter she listed common mistakes both retirees and advisors make in addition to common misperceptions. These are posted below. 3 of the most common mistakes RETIREES make: Thinking of 62 as being "Social Security age" without realizing the penalties they pay by claiming early benefits.  Filing for benefits without understanding all the ramifications as to spousal benefits, survivor benefits, the earnings test, etc.  Failing to consider the lifetime value of Social Security over a long life expectancy and how it provides longevity insurance in the event of a very long life. 3 of the most common mistakes ADVISORS make: Focusing too much on the breakeven age without considering the importance of income...

Stock prices slumped around the world yesterday [Monday, July 18], but shares of Apple Inc. shrugged off worries about a Greek government bond default and record gold prices and surged to an all-time high of $373.80. With a market value of over $344 billion, Apple has already shouldered aside Microsoft to become the world's largest technology firm measured by market capitalization and is now second only to energy giant ExxonMobil among US stocks. It has all happened so quickly that despite its heavyweight stature in the US stock market, Apple shares are still conspicuously absent from the Dow Jones Industrial Average. Apple's innovative products are the gold standard for personal communication and entertainment gadgets, and the company's fresh approach to store design generates sales-per-square-foot numbers other retailers can only dream about. As the company goes from strength to strength and the billions pile up on the balance sheet, it's worth recalling how uninspi...

Below is a brief article from Weston Wellington of Dimensional Fund Advisors, reviewing the markets over the last year and concurrent headlines from the media. It always helps to keep things in perspective and not get caught up in the financial pornography that is put upon us. -Kevin Kroskey --------- For the twelve-month period ending May 31, 2011, equity investors around the world enjoyed the equivalent of blue skies and bright sunshine while the economic news was partly cloudy at best. Among forty-five developed and emerging-country stock markets tracked by MSCI, all but four had double-digit total returns (in US dollar terms), and twenty-six had returns of 30% or more. If someone had told us a year ago that global markets would stage such a broad-based rally, we would have been inclined to think that trends in employment, housing, and financial distress were about to take a pronounced turn for the better. It seems hard to argue they have done anything of the sort. ...