avoid getting lured in by false investment performance claims

I grew up with two grandfathers who loved to fish.  From a very early age, I learned not only how to bait a hook but also how to craft a story around that hook.

You know the kind: Man, the fish I caught and released was *THAT* big.

Every bit as important as what actually occurred on the boat was the story that followed.  As a first-hand participant in the investment community, I understand now that the investment community has its own form of fish-y story.

Joshua Brown’s got quite an interesting post today on his blog, The Reformed Broker.  The Interview with Johnny Upside is a parody of hedge-fund types, claiming to always be ahead of the game, positioned perfectly to make a mint.  When backed into a corner, it’s clear that investors are only getting part of the story.

Well, you’ll say, what about their marketing materials?  They say that they’re up X%.   While not outright lying, funds conduct performance smoothing, taking returns and sprucing them up by comparing them to favorable benchmarks or specific to particular entrance dates into the fund.

While not outright lying, funds do good marketing by trying to make their performance look as good as possible. As Bernie Madoff has taught everyone, sometimes too good of a story turns out to smell like fish.

So, how does one avoid getting lured into investing with someone too-good to be true?  I think answering this question requires framing the problem: how does an investor truly size up performance of a fund manager? Can you really believe performance quoted by managers?

Couple things:

1. Investor communities create better visibility.  Investment newsletters are great at giving selective performance numbers.  They aren’t audited and they typically claim that they’ve made 3000% on a trade (without saying how all their trades have panned out — check out Stock Gumshoe to dig deeper on newsletter teasers).  Companies like Covestor (read here for more coverage of Covestor) are comprised of communities of investors submitting their trading to real-time auditing for performance. Performance and metrics are completely above board and when looking at a manager, what you see is what you get. If all funds participated in investor communities, we could have avoided a Madoff-like scandal.
2. Broker performance is by nature hard to quantify.  Any advisor who creates personalized portfolios doesn’t have an all-encompassing performance metric to tell you how good his advice is.  So, it’s difficult to really assess performance.   Instead,

• • Ask how his best clients have done
  • Ask how his worst clients have done
  • Ask if new accounts are coming in
  • Ask if people are pulling their money

Do some extra homework when looking at performance to ascertain whether performance is as good as it looks or just another tall tale.

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Avoid the big fish story from a financial advisor

In catching up on recent entries, I discovered an assessment tool called the “Wheel of Life.”

“This assessment contains 9 areas that, together, represent one way of describing a whole life. This exercise measures your level of satisfaction and range of expression in these areas as a snapshot in time. As you work through the assessment you will find areas where you can acknowledge yourself on the success you have created and areas where you may want to improve your level of satisfaction. We will have some suggestions and coach-like pointers at the end, along with your completed wheel of life. Rank each statement on a scale from 1 (Highly Disagree) to 10 (Highly Agree) by dragging the sliders along the scale.”

I must admit that I firmly believe that I have a good life, so I thought that taking this assessment would be a breeze and that I would have a fairly smooth wheel. Ha! Check it out:

Not smooth at all. Now, the big question is: how do I smooth it out? What do I need to do to have a comfortable ride now and in the future?

Well, before I beat myself up about this, first I want to mention that my strongest areas are: Personal Growth; Health & Well-Being; and Love/Romance. That’s good! I’m really happy to know that I feel so positive about those areas.

Areas that could use improvement are: Money & Finances; Physical Environment; and Friendships. Here are my thoughts on improving those areas in the New year:

Money & Finances: we completed two cross-country moves in 2007 (including home buying and selling), which has had a lingering affect on our financial stability. I had expected that we would be solid again by now, but I think that it will take another year before we can get back to where we were before. Meanwhile, I have instituted a monthly check-in so that my husband and I can review our finances together. This is significant, as for the past 13 years I have handled most of our joint finances independently.

Physical Environment: I was surprised at how low this was, but perhaps it’s because I”m sitting at a messy desk! Having a small child makes our environment naturally a little messy, but I am going to focus on managing the mess in a way that allows me to still feel calm and happy in all rooms of our home.

Friendships: The truth is, my deepest friendships are within my family. This isn’t really a bad thing, but I recognize that it would be good to diversify a little bit and stretch myself to devote more time and energy to other relationships. The challenge, of course, is that I simply don’t have a lot of time or energy at the end of each day, and what I do have is dedicated to my husband and daughter. I have been thinking about this for several months though, and although I don’t think I can come up with a “solution,” hopefully I will at least get some ideas.

I highly recommend taking the assessment - it’s fun and enlightening! Let me know what you find out!

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Bumpy Ride

One of the first things you need to do is build a “recession proof” portfolio. This begins with focusing your investments on the things people have to buy. For instance, no matter how difficult the financial markets get, people will have to buy food, pay to heat their homes, and buy basic toiletry necessities. The companies that provide these kinds of services or products are the ones you need to have in your portfolio. You can mix in some other more risky investments, but these “safe” stocks, known as “consumer staple stocks,” are the backbone of a recession proof portfolio.

Another trick to protecting your portfolio during difficult financial times is investing in companies that do not have much debt. Also, you need to keep your own personal finances as free from debt as possible. Companies and individuals who do not have tremendous amounts of debt can pull in and weather just about any financial storm.

If you fear a recession looming, make sure your portfolio and other investments are balanced. In other words, make sure that you invest in a variety of assets, including stocks, bonds, and mutual funds, but also non-traditional investments, such as gold or real estate. This means that you will still be afloat if one branch of your investments suffers.

One temptation to avoid is the temptation to bail on your investments. While a recession will make it appear that you are losing tremendous amounts of money, stick with your investments. Remember, the market may recover. Even after the Great Depression in the early 1900s, the market did, eventually, recover. Unless you are facing retirement very soon, keep your money in the markets, choose low-risk investments for a while, but avoid the temptation to sell everything and hold onto the cash. Cash cannot grow, so be patient and wait for the market to improve.

With these tips, you can build and manage a portfolio that can weather most financial storms. Remember, no investment is guaranteed, so build a diverse portfolio and stick with it in difficult times. You are likely to come out a winner if you do.

Denise Bergeron writes articles for single moms in need of financial help and advice.  You can visit her site at www.singlemomfinancialhelp.com  for additional information on education, career and business issues, home matters, relationships and education.

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Managing a Stock Portfolio During a Recession

Though we were personally spared some of the biggest problems, such as an Au Pair leaving 1 year old twins asleep in the home with the door unlocked while she went bike riding, we still have some of our own stories. Other have theirs about the lack of professionalism on the part of executives at some of the agencies.

As a mother, a business woman and a community member, I feel it is imperative that the public be aware of the consequences of the Au Pair Care system. Perhaps by our combined efforts we will be able to get Au Pair agencies to change their policies and be more client friendly and understanding of the financially difficulties families face when agencies put all the burden on them when something goes wrong.

And trust me, things go wrong. Our Au Pair said every one of her 7 Au pair friends had switched households at least once and some of them had illegally left the program and stayed on here illegally while leaving their families in the lurch. This is more common than the agencies will ever let you know. Guess who has the foot the bill for the extra cost of getting a new Au Pair? The family … not the agency, even if it is was the Au Pair’s fault. And the family can lose thousands of dollars, which for some is a hefty sum.

If a family has an Au Pair who illegally leaves the program, does something tragic ,or is just not a good fit, the Parents generally do not get their pre-paid money back from the agency. You see, families pay all 12 months up of the agency fees up front. The agency gets paid the same amount as the Au Pair. I wonder how many Au Pairs really understand this.

Au Pair agencies are staffing companies that take 50% of the Au Pairs first year salary up-front and is usually non-refundable, regardless of the situation works out or not.

Also the parents have to pay a registration fee, education costs for the Au Pair and possibly air fare too. So if the Au Pair leaves or the family decides the Au Pair is not a good fit for their family, they often will not receive their money back. I personally lost $2,000 and my Au Pair lost $1,000 that the agency wouldn’t give back because she illegally left the program to travel around the U.S. A good friend of mine lost $3,000 that Au Pair Care refused to give back. What is happening here?

If the Au Pair rings up a $1,000 in long distance charges to their homeland (it happens!). Who pays? Not the agency, the family has to burden that cost. I would recommend turning off your international long distance service if possible and using Skype instead.

By speaking about this online we can require that these agencies (and our government) to REQUIRE better screening of Au Pairs before they become part of the program and enter our country and our homes. And also require better screening of parents by the agencies to make sure their home and their expectations are a good fit for an Au Pair. As well as checking Parents references to ensure the Au Pair is safe.

One Au Pair’s references we checked said they would never trust their child in the care of this woman, who was their Au Pair in London, nor should we. And this reference was on the Au Pair’s application she sent to us. How in the world did she get into the program then and why didn’t the agency check her references? I asked and the agency said they did check her references. Interesting …

On a positive note … our Au Pair experience overall was terrific for our son who loved our Au Pair like a sister. We also treated our Au Pair like a daughter (she was only 18 years old when she arrived from Ecuador) and enjoyed having her along on all our family events and sharing our life with her. It was a shame that after 8 1/2 months she decided she didn’t want to work anymore and wanted to travel the U.S. with her girl friends, some who were also illegally staying in the U.S.

She left one day with any notice, just a note left behind I found a day later after worrying endlessly where she had gone - just a like a mom would if her 19 her old daughter didn’t come home one day. And just like a mother, worrying about the impact of one child leaving on another, I was saddened beyond words when I had to explain to my son that his “sister” had disappeared.

Luckily she did come back in a few months on her way back to Ecuador to say goodbye to our son and to wish us all well in our life. However, I don’t think it will ever remove the sting of her unexpected departure with myself or our son.

I invite other parents who hosted au pairs, au pairs, or au pair agencies to comments to this blog. However, please keep it a postive otherwise your post may be removed.

This is a forum to provide solutions in a polite way to parents who are looking for quality au pairs and for au pairs who are looking for quality parents.

Please avoid the “complaining” syndrome and instead offer an opportunity for growth and change for the Au Pair Agencies, for Parents and for Au Pairs. Often problems begin because of a lack of awareness, you can point out potential conflicts and problems without being negative. You must have an open mind to invite change.

Au Pair care offers many advantages for all parties involved. However, it also has many risks. To minimize the risks, one should research as much as possible, check references (whether you are the Au Pair or the Parents) and set your boundaries with the Agencies with the terms you are willing to accept.

Tiffany Bass Bukow is the CEO & Founder of the #1 Personal Finance Website for Women and Families - www.msmoney.com. My life mission is to help people and the world thrive through creating companies that provide money, career and life skills education.

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The High Cost of Au Pair Care

Consider whether you really need a car or not. If you live in a city, chances are you might not. Public transportation is great in cities and can usually get you everywhere you need to go. You’ll lose the convenience of having your own car, but it’s worth it when you see how much money you’re saving. If the kids are old enough, they can ride the bus to school or walk there if it’s close enough. You can always accompany them on a public bus if need be. Purchase a frequent-rider pass for reduced fares.

If you’ve decided that you need your own vehicle, you’ll probably want to avoid the dealerships and look for alternative places to purchase your car. Habitat for Humanity takes donated cars and sells them for reduced prices. You should also check the paper or CraigsList.com to look for used cars. You could also write a post on Craigslist.com explaining your situation and saying that you’re looking for an affordable, reliable automobile. You never know who will read it-maybe someone has a car they were going to sell but would rather it go somewhere it’s really needed. You could also check with car rental companies-they occasionally have rental cars for sale. Just be sure to have a mechanic inspect any used vehicle before you buy it.

Don’t forget to check with your local Social Services agency, credit union, or any related non-profits in the area. Many times credit unions will design loan programs that help single mothers purchase reliable transportation a credit union is a very good source for financial help . More often than not, a vehicle means the difference between a single mom receiving government aid and not because of her ability to get to work. Agencies know this and many will take extra steps to help you on your quest to find a car. Use the power of the internet to help you, too. Search for automobile grants and loans for single moms.

The goal of SingleMomFinancialHelp.com is to help women change the world through information and education. We are creating a support structure through which all women of the world can educate one another about where they have been, where they are right now and where they are going. With help from our site and the information and articles we distribute women will be more educated in finance, business, home matters, relationships, career and higher education.

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Finding Reliable Transportation As A Single Mom

In this scenario, one of the questions that I am most frequently asked is, “How do I make my money back?” My answer to this question is simple - don’t try to make your money back. If you try, chances are that you are going to take unnecessary risks and end up losing even more money. For this reason, the best advice may not be something that many investors want to hear. It is probably better to forget about the past and concentrate on the future. While the markets are getting hammered, stocks are selling at a discount. Although no one can predict when the market will hit bottom, buying at a 40% off discount is something that rarely happens.

Asset Allocation

Creating your asset allocation, or the mix of stocks, bonds and cash in your portfolio, is the single most important task that an investor has to face. Many studies have shown that the proportion of stocks, bonds and cash held in a portfolio has a greater effect on its returns and volatility than the individual investments that are chosen.

That is why after assessing one’s investment goals, it’s of the utmost importance to create an allocation that can help you achieve the aforementioned goals. Once you have fixed your asset allocation, you can start considering what to buy. “Be greedy when others are fearful,” is one of investor extraordinaire Warren Buffet’s favorite sayings. Many economists believe that the United States is in the midst of a recession. While this does not sound good, there may be a silver lining for investors. Though you need to always remember that past performance is no guarantee of future returns, consider this: According to a report in Smart Money, “Stocks tend to rebound before the economy does. Over the past nine recessions, the S&P 500 has gained an average 13% during the second half of the downturns and another 13% the year after they ended. Even during the Great Depression, the S&P rose 33% from the market’s trough to the end of the recession. And while it’s folly to try to predict a bottom, with the market down 40% from its 2007 high, it may not be far away.”

Buy Low/Sell High

During more stable times, clients ask me which stocks I think may have big upside potential. Usually, they are looking for small companies that have the potential to move up rapidly. I like to refer to this as “being a hero.” These clients expect me to wade through loads of information to pick out a company that no one has ever heard of. (Whether that is realistic or not is for another column!) In today’s climate, however, there is no need to be a hero. It is not necessary to speculate on risky companies. It is enough to look at large companies that continue to pay or even raise their dividends as a place to start. These are usually companies that make products that we all use in our day-to-day lives. For example, come what may, consumers are still going to use shampoo, toothpaste, soap, and other necessities.  Obviously there is no guarantee that your money will be doubled within the next week. But if you have a long-term investment horizon and you can withstand continued volatility, then investing in stocks now will have the potential to reward you in the future and help you rebuild some of the wealth that you have lost.

With the current market volatility, it is worthwhile speaking with your financial adviser to make sure that your portfolio is well designed with your financial goals in mind. Then, if your financial plan allows for it, have a talk about trying to take advantage of a once-in-a-lifetime opportunity.

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Rebuilding Your Wealth

Five Tips on How to Enjoy a Happy Marriage and Keep it That Way!

1) Focus on the strengths and the value that each of you bring to the relationship. Notice whether you are ONLY focusing on your spouse’s weaknesses or quirks? Make a list of each of your strengths and honor them.

2) Master the Art of True Listening. Take time for each other at least 15 to 20 minutes three times a week without the interruptions of TV, computers, cell phones, etc. We all need to feel heard and understood. By giving each other the respect of true listening will change your marriage forever.

3) Treat your spouse as you would a stranger. Be aware of how you treat someone that you just met. Are you kind, respectful, patient, understanding and maybe even forgiving? Why not treat your spouse the same way?

4) Never stop spoiling each other. When the spoiling stops the marriage is in trouble. Keep it simple. It could be as simple as greeting your spouse after a long, challenging day with a cup of tea or a glass of wine.

5) Do an Act of Kindness. We hear all the time how important it is to do an Act of Kindness for a stranger without expecting anything in return. Why not your spouse?

As the Founder of the National Association of Divorce for Women and Children, Joanie’s passion is to help women be the best they can be as well as become role models for their children and community. The 24/7 Resource Center was created not only because of the lack of support and guidance Joanie experienced after her divorce, but for the many women who experience the same challenges.       

Joanie became a successful business owner of a True Value Hardware store at the age of twenty five. After eighteen years in the retail arena, she embarked on a professional career as a speaker, author, business/personal coach specializing in divorce and a Certified Behavior Specialist. She is also the Divorce Specialist for the National Association of Baby Boomers.

To continue to help provide a healthy lifestyle for women and children, Joanie is the Founder of the non-profit Happy Wednesday Foundation which provides funding for women’s educational mentoring programs during and after divorce.

For more support and encouragement during and after divorce, visit the National Association of Divorce for Women and Children.

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Divorce Coach Saves Marriages

Divorce is a devastating time in a person’s life.  Unfortunately, divorce can also wreak havoc on your finances and can leave you without a safety net during a vulnerable time.  But, some good advice can limit financial hardship, which is especially important during a time in your life when you may not be thinking clearly.  Keeping tabs on your finances and credit history can mean the difference between a fresh start and financial ruin.

When you decide it’s time to end your marriage, there are several things you can do immediately to safeguard your finances:

Establish Responsibility

Look at all your bank accounts, mortgage, credit cards, utility bills — everything.  Know who has personal responsibility for each account.  Even if you’ve already decided who gets your property, you still need to establish sole responsibility.

Dissolution

Dissolve ALL joint accounts (mortgage, credit, utility).  If your spouse has access to your account, he/she has access to your money/personal information.  However painful, be sure you do this together with all the proper paperwork in place so everything is legal.   You need to close these accounts and open individual accounts.  Divide any remaining funds evenly.

Sell the House

This is the best and simplest solution for shared real estate holdings.  It is also the most equitable because it enables you to split the proceeds.  You don’t know what the future can hold and if you’re name stays on the deed, you are responsible if anything happens to the house.

Documentation 

This is especially important as you begin divorce proceedings.  Make sure all financial arrangements are made and all paperwork processed and filed.  You may need this information in the future and it’s good to have it ready now and can be used in court.

After you’re divorced, you must be vigilant:

Watch that score

You should already be doing this every year but it’s especially important to monitor your credit score after your divorce.  Your credit score can drop after a divorce.  And, you’ll be able to monitor activity on your accounts to ensure there is no unauthorized activity.

Tell your creditors

To head them off before the collection calls start on accounts no longer yours, call your creditors and tell them you’re divorced.  This may take a while and it’s a good idea to notify them in writing as well as over the phone.

Divorce is a complex and emotionally-charged process.  It can be difficult to “play hardball” when you’re hurt but it’s imperative for your future financial health.  Amicable divorces happen when both partners come to the table prepared, reasonable and rational.

Launched in May 2007, BusinessCreditCards.com provides a resource for any business owner or self-employeed individual who is searching for a better credit card.

Our blog, Bootstrapper, is a resource for any small business owner operating on a shoestring budget, and provides tips on financing, cash flow, low-cost marketing and small business loans.

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Avoiding Financial Pitfalls During Divorce

Case in point, take the dramatic fall of one of Wall Street’s alleged top brokers Bernard Madoff who, as we have recently learned, bilked billions from countless ultra net worth (and supposedly highly sophisticated) investors through an intricate, multi billion dollar Ponzi scheme–one of the biggest cases of securities fraud in modern history!

(From the Wall Street Journal on December 12, 2008)

“Mr. Madoff’s asset-management business appealed to investors for its remarkably steady returns for investing in the stock market. His investors consistently enjoyed small monthly gains, usually between zero and 2%. Mr. Madoff told investors his strategy was to trade in and out of large-cap stocks and buy options on those shares to help smooth the ups and downs. When he failed to see opportunities in the market, he would shift to U.S. Treasuries, according to fund marketing documents and people familiar with his strategy.”

“Mr. Madoff’s Fairfield Sentry Ltd., a hedge fund run by Madoff Investment Services to invest in shares in the S&P 100, claimed to be up 5.6% through the end of November, a period when the Standard & Poor’s 500-stock index was down 37.65%. In October, Fairfield Sentry was said to be down 0.06%, a month when the S&P 500 lost 16.8%. Since its inception in December 1990, the fund averaged a 10.5% annual return, according to fund documents.”

“Bernie Madoff’s returns aren’t real and if they are real, then they would almost certainly have been generated by front-running customer order flow from the broker-dealer arm of Madoff Investment Securities LLC,” Mr. Markopolos wrote to the SEC in November 2005.The SEC declined to comment on the matter.”

As a financial advisor, please heed my suggestion–never do business with a financial professional who does not separate the custody function from the advice function. More importantly, if you do not know what the advisor is buying on your behalf, find out. This lack of transparency, or “black box model” of investing is one my biggest reservations about investing in hedge funds. I suspect that many investors are going to start asking many more questions of their managers and might be much less tolerant of black box managers in the future.

The WSJ article continued to say:

“Mr. Madoff’s investors described their shock and panic on Thursday. Susan Leavitt of Tampa Bay, Fla., said she had several million dollars of inherited money invested in the firm and added $500,000 earlier this year. A stay-at-home mother with two children, the 46-year-old Ms. Leavitt says she is considering going back to work. “That was my nest egg for the children, and my future. I’ll never see much back, I’m sure,” she said. Ms. Leavitt said she recently discussed her investment with a friend who told her he was suspicious about the firm’s ability to generate such profits amid the economic crisis. “I thought, ‘He’s probably just jealous,’ ” said Ms. Leavitt. “We’ve been with [Mr. Madoff] for 15 years, and it’s grown every year at 10%.”

I’ll close this entry just as I started it:

If it sounds too good to be true, it probably is!

Cathy Pareto, MBA, CFP®, AIF® is the Founder and President of Cathy Pareto & Associates, Inc. For over twelve years, Cathy has been helping financial consumers and professionals understand the world of investments and finance with a sound, but down to earth money management approach. For over a decade Cathy was a Senior Financial Advisor for another Miami based investment advisory firm, where she managed over $200 million in assets for high net worth clients and retirement plans. She has extensive experience in retirement issues, asset allocation, investment selection, investment management, education planning, estate planning coordination, and asset protection strategies. Additionally, she was an Adjunct Professor and Faculty Coordinator for the CFP® Program at Florida International University’s College of Business.

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If It Sounds To Good To Be True, It Probably Is

Diversify
To understand this concept more easily, we first need to define the meaning of diversification. Diversification is an investment technique that uses many varied investments within a single portfolio. The idea behind it is that a portfolio of different kinds of investments may, on average, yield higher returns and pose a lower risk than a single investment. Diversification tries to smooth out volatility in a portfolio caused by market, interest rate, currency and geopolitical risks. In laymen’s terms, don’t put all your eggs in one basket. It’s important to remember that diversification does not assure against a loss.

If you include bonds or FDIC-insured Certificates of Deposit (CDs) in your stock portfolio, it may take away some of the volatility of the portfolio, allowing for potentially, more stable returns over the long run.

Don’t Panic
Keep you eyes glued to your long-term goals. It’s important to remember that markets go up and down, and if you made a financial plan, it would have taken this type of market volatility into account. The worst thing you can do as an investor is panic and sell everything and then wait for the market to recover. The market tends to recover very quickly. Large market gains often come about in quick and unpredictable spurts, and missing just a few days of strong market returns can substantially erode long-term performance. Remember the famous investing principle of buying low and selling high. Investors who panic often end up selling low.

Rebalance
The third principle is for investors to update or rebalance their investment portfolios. Rebalancing is necessary for two main reasons. First of all, it keeps your asset allocation in line with your risk level and, secondly, it keeps your portfolio in line with both your short- and long-term goals and needs.

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3 Tips on Investing During Tough Markets

The Holidays are characterized by joy, happiness, singing, parties, eating, gift giving, concerts, plays, Christmas programs, charity drives, cookie exchanges, travel and people having fun. At least that is what the media would have you believe. The truth is the Holidays can be a tough time when you are going through or have recently gone through a divorce. The last thing you may feel like doing is pretending to be joyful and cheerful.

More than likely you and your spouse had developed some family traditions over the years. The traditions may have been ones you created, or ones you continued from one or both of your families. As we enter the Holiday Season, now is a great time to think of your family traditions. Are there traditions that you want to continue? Is there something you have always wanted to do but some how never seemed to incorporate it into your busy schedule? Did you give up something that was important to you, because your spouse did not want to do it? What brings you the most joy or happiness this time of year? How might you incorporate that into your life?

Now is the perfect time to create your own traditions. Think about the season and all it has to offer. What Holiday events do you enjoy the most? If it is something you shared with your spouse, maybe find a way to add a new twist or make it different in some way. You don’t have to completely give up all of your traditions. If it was going to a concert or Christmas program, what about going to dinner at a favorite restaurant before the event?

If you have children, include them in coming up with new traditions. Pick a time to brainstorm. Discuss each person’s favorite thing(s) to do during the holidays. Are there are any new things you may want to do? Listen to what everyone has to say and then come up with a list. Have each person rank the activities in order of most important to least important. If possible, try to do all of the activities on the list. If it is not possible, you could alternate years between a couple of activities. Be flexible and willing to try new things.

Last year my children and I decided to go to a presentation of the Nutcracker. We had a family friend performing in the ballet. Although we each enjoyed the performance last year, my children did not want to attend again this year. We have started many family traditions that we do every year. We continue to try new opportunities as well.

In this season of giving, why not give of yourself? In the book, “The Go-Giver” by Bob Burg and John David Mann, they state “The most valuable thing you have to give people is your self.” Have you ever volunteered for a charitable event this time of year? Organizations are always looking for volunteers this time of year. Some ideas include serving a meal to the homeless, collecting and or sorting gifts for a gift drive or food drive, decorating, planning, preparing food for a party where gifts are distributed to underprivileged families, adopting a family in need and buying them gifts, ushering at a Christmas or holiday program.

To find programs needing help during the holiday season you can check the following resources:

The newspaper
Your church
Local schools
Websites for local news stations
Websites for local charities/organizations
Website for local Chamber of Commerce
Internet: Google volunteer opportunities in your area

My children and I volunteered at our church last year to serve Thanksgiving dinner to the homeless and underprivileged people. What a great learning experience it was for them. We were all disappointed when the volunteer list was filled after the first weekend of sign ups this year. Unfortunately we were not able to serve.

Volunteering and serving others at a time when you may feel less than joyous, can make you feel better. When you can make a difference in someone else’s life, you can be thankful for what you have to offer others and what you have personally. Try it.

What new traditions will you try or begin this year? Will you make the decision to try at least one new tradition? Make a conscious effort not to dwell on past holidays. Plan something you can look forward to doing. Look for the blessings and things you have to be thankful for this season.

Shelley Grieser is a Christian Life Coach specializing in Broken Marriages. I work with men and women across the country who are on their path to recovery from divorce, to empower them to create a future they truly desire. When we are accountable to someone we are more likely to succeed. When what we do is recognized, cheered and affirmed, we perform at a higher level. People getting divorced rarely have someone to hold them accountable and support them during this time of transition from married to single. As a coach who has walked the path of divorce, and been a child of divorce, it is my passion and desire to come alongside others on this journey to help them make this transition and create a future filled with hope. Please visit me at: http://www.ahopefilledfuture.com

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Divorce - A Time For New Traditions

Many will answer referencing the numerous emails (spam?) they receive on a daily basis with information “that’s guaranteed to triple your money!” While that’s a preposterous boast, I think the most important thing to do when starting a financial newsletter business is picking the theme of the newsletter.

Picking a niche topic versus building a general investment newsletter

The key in the investment newsletter business is positioning (see this for an explanation about your Unique Selling Proposition), just like in many other consumer-focused businesses. Success in branding, marketing and distributing your newsletter will be built upon your investment newsletter’s theme. e-books, like newsletters, follow similar rules.

So, is it better to go niche with your newsletter (and publish the clean technology newsletter) or stay broad with a loosely-defined universe (like Joe’s Top Stock Picks)?

I think there is a fine balance between being to tightly-defined (Chuck’s Tech Stocks that Begin with the Letter ‘A’) and standing out from the rest of the pack.

See what else is out there

Go to Forbes Newsletter site.  Forbes runs a whole business where they distribute and market other people’s newsletters.  Check out some of the leading titles.  You’ve got

• personality newsletters — newsletters that are sold leveraging the reputation of an individual (e.g. Gary Shilling’s Insight, Gilder Telecosm Forum)
• sector-focused newsletters — investment newsletters focused on different industries (e.g. Forbes Wireless Stock Watch)
• product newsletters — newsletters focused on investing in specific products (Forbes ETF Investor)
• geography-limited newsletters — investment newsletters focused on opportunities in certain countries (Canada Report)

The majority of the investment newsletters tend to fall in the broad category.  This is probably because the audience served by a broad newsletter is larger than any of the other options.  If you choose to go this route, you fall into the space with the greatest noise.

Buck the trend

The reason so many newsletters have to resort to such slimy marketing tactics is because they lack differentiation because they are so broad.  If you want to stay above the fray, get better defined, without becoming so niche that you become irrelevant.

Have the foresight to scout future trends.  Analyze new investment products as they gain traction.  Scout new geographies where visibility is poor (China hasn’t been taken seriously enough).  Have the insight to pick an investment newsletter focused on the next hot sector in technology.  There will always be buyers (albeit, fewer) for more niche newsletters.

But here’s the thing: they’ll pay more for your expertise.  So instead of finding yourself in the $39-$149/year club, you’ll push the upper range.

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How to start an investment newsletter: picking a theme

Me talk money one day

This particular instance which I’ve described above recently happened to me.

I felt even more worthless when I got off the phone with said client and realized I was so busy trying to sell myself that I’d forgotten to bring up my rates. In all honestly, my proposal outlined my hourly billing rates and he had skimmed it and given his initial “ok” but we’d never had a conversation specifically related to how much he was planning on paying me.

Ambiguity doesn’t sit well with me and in business, it’s the kiss of death. I realize that if I can’t have such a conversation with my potential client it might not bode well for our relationship longevity, but I opt not to think so deeply on this one. I don’t think it’s such a simple cause-and-effect.

I choose to think that much like I don’t like having to tell my boss I’m taking a vacation and might conveniently forget to mention it a few times before I eventually bring it up, this is another example of a conversation I’d rather not have because it makes me

uncomfortable and ok, if you want to get deep here, I fear (more than the rejection) that ugly word: Conflict.

I’m not throwing in the towel on this project or this client. Yesterday I had to send him a document I created and I used that as an opportunity to remind him of my rates. Sure, it’s a bit of a pansy move and it does little to further the line of DIRECT communication, but work with me here. It’s a start.

Worker Biatch is a wannabe Gen Xer (or “Millenial” as those labelists like to emphatically reduce her existence to) that has spent too much time in a cubicle. It’s a good thing she doesn’t go by labels or should might more accurately describe herself as a cusp middle child, stuck somewhere between the Xs and the Ys. Whatever the case may be, she’s accumulated some serious material over her years. She’s convinced this material hasn’t been too kind to her fragile psyche, but has made her a much wiser person overall and most likely funnier as a result.

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If I’m so tough, why can’t I speak money?

Over the years, I have learned to stay clear of overly cheery Black Friday freaks fans.  These ladies wear their merriest holiday ensemble.  You will hear their jingle bells as they run you over with their cart to grab the last Wii bundle.  

This year, I spotted a herd of ladies dressed like Christmas cheerleaders.  They wore red holiday tees bedazzled with “Shine” in sparkly letters across the front.  They completed the look with shimmer red and green headbands that looked an elf exploded on their heads.  Although the outfits were a riot, I found their conversation even more comical.  In true Target Lady fashion, they made comments about every little item as they shopped. 

“Well, isn’t this lovely?”  

“Have you ever seen anything so cute in your life?” 

“And you can’t beat the price!” 

This holiday version of the Target Lady made it worth getting up at 6:00 a.m. to shop.

In past years, I would find myself waking up at 3:30 a.m. to begin a marathon day of shopping.  Around 8:00 a.m., my girlfriends would make a pit stop at my house to refuel with a hot cooked breakfast prepared by my DH.  Then, my family and I would head out for round two of crazed crowds in shopping malls. 

But this year, my DH needed to work on Black Friday and so my mall shlepping would be trimmed.  

After Wal-Mart, I continued my holiday spending spree with some on-line shopping.  That’s when I found my moment of Zen.  With no screaming, fighting or crying children begging me to buy every fuzzy and shiny object, I shopped at 6 different stores all at the same time.  My children happily played while I loaded my shopping carts.  It was fabulous.  

For this Black Friday, I saved my sanity as well as a few dollars. 

But then, this morning on the news, I heard about a relatively new retail phenomenon: Cyber Monday.  WHAT?!  More rock bottom prices?!  Once again, I shopped till my eyelids dropped searching for bargains and all from the comfort of my ass home.  I have a new love.  

Move over, Black Friday!  Cyber Monday is serving up deals with no lines and no waiting!

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Black Friday or Bust!

* Lower gas prices

In a time where already cash strapped consumers are witnessing the evaporation of their retirement accounts and house values, a little relief at the pump will be a welcome change. Gas prices have tumbled from their July highs of $4.11 a gallon down to just under $3 in many U.S. cities, due in large part to shrinking global demand. A happy by-product of this is the negative financial impact it will have on psycho oil-rich dictators like Chavez (Venezuela) and Ahmadinejad (Iran) who are now scrambling to restructure national budget obligations. Sorry boys….looks like the energy orgy is over and it’s time to sober up. I guess this might put a damper on their record of “checkbook diplomacy”, in their efforts to sway leftist or anti-West support in cash poor, vulnerable nations.

*Global warming will slow down

Okay, so I don’t have any scientific evidence to support this claim. But, I figure, if there’s less global demand for oil (and that includes oil guzzling China), then there’s less driving/flying/manufacturing, which means less carbon emissions, which means some slight relief for the ozone layer. Well….at least we can hope, right?

Cathy Pareto, MBA, CFP®, AIF® is the Founder and President of Cathy Pareto & Associates, Inc. For over twelve years, Cathy has been helping financial consumers and professionals understand the world of investments and finance with a sound, but down to earth money management approach. For over a decade Cathy was a Senior Financial Advisor for another Miami based investment advisory firm, where she managed over $200 million in assets for high net worth clients and retirement plans. She has extensive experience in retirement issues, asset allocation, investment selection, investment management, education planning, estate planning coordination, and asset protection strategies. Additionally, she was an Adjunct Professor and Faculty Coordinator for the CFP® Program at Florida International University’s College of Business.

* Responsible bank lending

The days of easy credit are officially over. And while this is bad for some consumers, it’s the responsible thing for banks to do (not only for their balance sheets but for the economy as a whole). If there’s anything that we’ve learned from the sub-prime debacle, is that responsible lending is a critical component for a sound economy. Banks are reverting to their old ways…that is, prudent lending practices that were prevalent before the housing frenzy spiraled out of control. Borrowers will actually have to be credit worthy (gasp!) and will be forced to save for down payments in order to buy a home (gasp, gasp).

*Americans will FINALLY recognize the value in SAVING

It’s no secret, Americans are among the worst savers on the planet and that will come back to bite many of them in the tush right now (and of course in the future). A joint survey conducted by Princeton Survey Research Associates International for the National Foundation for Credit Counseling and MSN Money, found that Americans are largely unprepared for economic hard times–many don’t even have an emergency fund! I suspect that after we all survive this bitter dose of economic reality, many folks will learn their lessons and give serious consideration to saving for unforseen circumstances (like now) and also for their future. Sometimes it’s the negative experiences that teach us the best lessons and serve as a source of discipline and inspiration in later years

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4 Good Things to Come Out of an Economic Slowdown

• Close to home. Many communities have local colleges, which means that students do not have to travel far to find high quality education. And since single moms and their families will not be spending exorbitant amounts of money on tuition, they often do not have to borrow money through student loan programs. Studying close to home also means that moms can still live with their children, thereby saving on room, board, and travel expenses.
• Small class sizes. Classes in community colleges are usually relatively small, so students get more individualized attention from their instructors. This interaction can often mean that students get a firmer grasp of the course’s content, making them well-prepared for advanced classes.
• Low tuition costs. The costs for courses at a local community college are often much less than universities or four year colleges, making higher education accessible to everyone. Mothers who would struggle financially to put themselves through a university are usually much more able to pay for courses at a community college. Students can often also work part-time and pay for the coursework themselves.
• Quality of education. Whether the students at community colleges intend to end their education with their associate’s degree, or they plan on transferring their coursework credit to a university, the quality of education at community colleges is usually more than sufficient. Instructors usually have a strong commitment to their students, and work hard to make their courses meaningful.

If you are interested in attending a community college, look around to the choices in your area, paying attention to both the programs they offer as well as their quality of instructors. You will usually be able to find several colleges in your area that offer your intended program; so your choice comes down to how impressed you are with the instructors, as well as how transferable the coursework is. Ask the college’s registrar to give you a list of which universities accept credits from them, to make sure that you can use the credits you earn later on, if you desire.

The goal of SingleMomFinancialHelp.com is to help women change the world through information and education. We are creating a support structure through which all women of the world can educate one another about where they have been, where they are right now and where they are going. With help from our site and the information and articles we distribute women will be more educated in finance, business, home matters, relationships, career and higher education.

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Are Community Colleges Right For Single Moms?

This week it’s the Big 3 auto makers from Detroit who have extended their hands, trying to make a grab into big brother’s pocket: Ford, GM and Chrysler. Deciding whether or not to bail out the biggest three auto makers in the U.S. has been a daunting challenge for lawmakers in the lame duck Congress, where the rescue plan is stuck in the Senate after days of deliberations. Even the lame duck President does not want to make any commitments.

(From Yahoo Finance)
“Senate Majority Leader Harry Reid, D-Nev., canceled plans Wednesday for a vote on a bill to carve $25 billion in new auto industry loans out of the $700 billion Wall Street rescue fund. The Bush administration and congressional Republicans have rejected Democrats’ plan to dip into that pot of money. Warning of economic disaster, a bipartisan group of senators from auto industry states are trying to reach a deal on an alternative package. If an agreement can be reached, Reid said, the Senate still could vote on it as part of a measure to extend jobless benefits.”

All three CEO’s from the respective companies painted a grim picture of their financial position, despite having flown in to the two day hearings on their private corporate jets and expensive suits. Their claim, “Detroit’s automakers, hurt by a sharp drop in sales and a nearly frozen credit market, burned through nearly $18 billion in cash reserves during the last quarter, and GM and Chrysler both said they could collapse in weeks.”

The proposed legislation, now on life support, calls for the U.S. government to extend a 10 year, $25 billion loan to the companies. But, it is unclear where the government would lie in the pecking order of creditors the companies already have (ie. in case of default).

Frankly, the capitalist in me thinks they deserve to fail, as heartless as that sounds. Any MBA student from a reasonably reputable college understands the importance of maintaining a nimble corporate strategy and competitive advantage. Where have these smart guys been the last ten years as the Japanese automakers little by little encroached on their market? They lagged in innovation, technology and pricing. The albatross around their neck, the union known as the UAW (united auto workers), has systematically made their costs of production, labor, etc. unreasonably high in an increasingly competitive global marketplace. Something had to give. Either you make better cars, invest in fuel efficiency or cut your prices….otherwise, you are toast! Fast forward to today, when Americans have cut back on spending, banks have stopped lending as vigorously and consumer demand just dropped off a cliff. America cannot keep subsidizing companies whose leaders are blatantly incompetent, stupid or just plain greedy (or some combination thereof).

Now, I’m very sorry about the prospects of 1 to 3 million innocent people losing their jobs and potentially experiencing pension defaults. The impact could spell considerable discomfort in the short term to the economy and the financial markets. But, a bailout of these companies is not justified. Who’s next….the airlines, the farmers, the mid sized manufacturer in the industrial parks of Hialeah Florida, the corner flower shop? Give me a break!! As far as I’m concerned….farewell big 3…pigs get slaughtered and now it’s your turn to go. Good luck in Bankruptcy court.

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To Bail or Not to Bail…That is The Question

This is a side to side comparison of two of the best online financial sites: Yahoo Finance and Google Finance.  Yahoo is still the largest and most popular finance site by far but Google is serious about finance.  Let’s see how the two financial portals stack up against each other.

Speed

Google Finance: Typical fast-loading Google pages.  Google’s site is broad and doesn’t go deep.  Pages for individual stocks are only 1 page deep (Google links out for things like option chains, major holder, etc.)

Yahoo Finance: Yahoo Finance is fast.  As opposed to Google, Yahoo content resides primarily on Yahoo pages and Yahoo is responsible for page load speed throughout the site.  This can fluctuate as any large website can throughout the day.

Charting

Google Finance: Google primarily uses a simple javascript-loaded chart without any bling.  It loads fast and allows easy to manipulate x-axis (time period).  When you’re figuring out what a particular stocks has done over the past 17 days, the chart also calculates the return for a given time frame beyond the standard 1-day, 5-day, 3 month, etc. time period.  Google also plots news events onto their charts which is kind of cool (not necessarily tradeable).

Yahoo Finance: Yahoo Finance charts are much more robust.  Advanced charts have incorporated a similar charting function like Google’s and provides an overlay of numerous technical indicators (MACD, RSI).  Because these charts are so powerful, they also tend to be bulky and seize up.

Real Time Quotes

Google Finance: Google provides real time quotes both during market hours and pre- and post- market.  Google’s quotes on market indices tend to skew erratically during the transition to an open market as well as trails when the market makes large moves to the upside or downside.

Yahoo Finance: Yahoo also provides real time quotes both during market hours and off.  Yahoo’s premarket quotes are not as reliable as Google’s.  Yahoo occasionally doesn’t have a price premarket for a wide array of stocks.  Yahoo has a scrolling ticker as well for stocks that is personalized to the behavior of the user.

Breadth

Google Finance: Google gives basic info all on one page.  Anything more a user needs to link off.  News, financial info, blogs all included.  Very shallow, quick and dirty use.  Google does a good job bringing in blog content but lacks good, standardized PR content, still necessary in the research process.

Yahoo Finance: Yahoo provides an entire research environment.  All the content and data is supplied by Yahoo.  From major holders to options chains to blogs and PR, Yahoo is a virtual poor man’s Bloomberg.

Innovation

Google Finance: Google allows users to download data, making the site more portable than we’ve traditionally seen.  Google portrays the data environment well around a stock.  Beyond that, nothing particularly innovative about what Google’s done so far.
Yahoo Finance: Yahoo Finance is the 800lb gorilla and essentially helped to democratize financial information.  Yahoo has done a good job bringing in financial blogs in a controlled environment, using SeekingAlpha to help filter.  Charts are very powerful.  Not too much current innovation going on either on the surface.

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Investing 101: Should you use Google or Yahoo?

Recessions are inevitable, so it is only sound financial advice to tell you to plan ahead for them, even if you are currently experiencing a time of economic prosperity. If you are in a recession, there are steps you can take to keep it from impacting you too much.

The most dangerous thing that happens in a recession is job loss. As the economy slows down, people slow down their spending, and businesses suffer. This forces them to lay off workers, and those workers are the ones that suffer the most during a recession and most likely need financial help.

The best way to protect yourself from this possibility is to lay up some cash reserves. Economists recommend having three to six months worth of living expenses saved. This takes time, but you need to start working towards this goal in your financial planning.

Another danger of a recession is price increases. As companies try to make up for the lack of sales, they are often forced to raise prices. You can combat this by learning to cut coupons, shop sales, and stock up on your necessities when they are at a good price. Also, make sure you are only buying what you need. Save the “extras” for an occasional treat, but learn to tone down your spending habits. A recession is not the time to buy a lot of “extras.”

Finally, whether the economy is good or bad, make sure you do not take on too much debt. Your non-mortgage debt should be as close to zero as possible. If possible, keep your monthly payments that are going towards debt, including your mortgage payment, around 30 percent of your total monthly income. Anything more than this is dangerous, particularly during a recession. Learn to live without using your credit cards, as this is one of the most expensive and dangerous forms of debt.

Getting good financial help and planning through a recession is not as difficult as it might seem. Make sure you are saving your money, and limit your credit spending. Soon you will see the economy swing back toward the positive side, as it always does.

The goal of SingleMomFinancialHelp.com is to help women change the world through information and education. We are creating a support structure through which all women of the world can educate one another about where they have been, where they are right now and where they are going. With help from our site and the information and articles we distribute women will be more educated in finance, business, home matters, relationships, career and higher education.

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Need Financial Help During A Recession?

It is suggested that you use this precious opportunity to rediscover yourself. Think of this time in your life as an adventure to explore the real you. If you have worked outside the home combined with being a mom and wife for the last ten, fifteen or twenty years, you may have lost yourself along the way. Certainly not on purpose, but as most women try to do it all as “super” moms, many times we put our own wants and needs on hold to keep our families and jobs running smoothly!

Take a deep breath and let’s start to rediscover your true passions and say…
Will the Real Me Please Stand Up!

Tip#5 What Makes Your Heart Sing?

What really matters to you? What do you feel is your true purpose in life? If someone asked you that question, how would you answer them?

Why is it so important to be clear on what your life’s purpose is? Knowing your purpose, will give you a true sense of who you are and why you were put on this earth. It gives your life direction and helps you make clear and easy decisions concerning that direction. It’s your compass! Without a purpose, can your life be compared to a piece of driftwood? Floating endlessly in whichever direction the tide decides to take it and ending up on any beach with no will of its’ own.

When you live your life based on your purpose you are living in integrity with yourself and are in alignment of who you really are in all aspects of your life - body, mind and spirit. Take this time to focus on what really matters to you. Feel the true passions that exist in your heart and write them down.

As the Founder of the National Association of Divorce for Women and Children, Joanie’s passion is to help women be the best they can be as well as become role models for their children and community. The 24/7 Resource Center was created not only because of the lack of support and guidance Joanie experienced after her divorce, but for the many women who experience the same challenges.       

Joanie became a successful business owner of a True Value Hardware store at the age of twenty five. After eighteen years in the retail arena, she embarked on a professional career as a speaker, author, business/personal coach specializing in divorce and a Certified Behavior Specialist. She is also the Divorce Specialist for the National Association of Baby Boomers.

To continue to help provide a healthy lifestyle for women and children, Joanie is the Founder of the non-profit Happy Wednesday Foundation which provides funding for women’s educational mentoring programs during and after divorce.

For more support and encouragement during and after divorce, visit the National Association of Divorce for Women and Children.

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Life After Divorce