Sunday, December 23, 2007

So many cures

Every once in a while I think, why should I even bother writing a money blog, I'm not a professional, I have no CFP certification. All I can do is quote Suzie Orman in my sleep. Well, today I am rejuvinated and so am writting another post. The reason is the book that Kevin Trudeau published called "debt cures".
Most of you probably recognize Kevin from his other book "Natural Cures".

Kevin backs up his books with those paid tv spots where he talks about all the secrets he reveals in the books.

Now, I looked at Natural Cures, and it was a long list of all the natural remedies that exist and he recommends the all. Overall though, after flipping through the page I felt like I was going to die any second now because I don't see my chiropractor every month and have never done a "cleansing"

But fine, the book is ok as just a big list of things you could do for yourself. But here is what I am amazed at.

Now he has come out with a book about debt! He went from an expert in natural remedies to being an expert in debt. (in between he also actually published a book on weight loss) What this means is that this guy is just a marketing genious.

For me it proves once again that anyone can become a money guru. Look for my next book tour!

Tuesday, December 11, 2007

Random Personal Productivity Idea

Here it is, short and simple:
Break down huge scary task into really, really small tasks so that you can do each in 5 minutes.

That way, in a year you can complete a whole project if you work 5 minutes a day. Without the list, the task may appear too daunting, or you might spend your 5 minutes just figuring out what to do.

With this plan, you just get your 5 minutes, and do whatever the next task is.

Ok, now take this idea and go make a million!

Monday, December 3, 2007

Financial Wisdom Might Be Part of an Information Cascade. BEWARE!!

Here's a fact:
When CNBC mentions a stock with good news or bad, its price goes up. Effectively making an excellent stock trading strategy.

The assumption people are making is:
If CNBC thinks it is good, it must be good.
But wait, that implies the listener actually heard more than the ticker symbol and would not explain why bad news also causes the stock to go up. So the real assumption people are making is:
If you see or hear a stock mentioned on CNBC, BUY IT!!!!

That's right, there are millions of people just watching CNBC and then calling their stock brokers. The question I ask here is: Are you one of those millions?

But even if you don't buy stocks the behavior I described should cause you to evaluate your own decisions. Before I get to that, let me explain what might be causing the CNBC listeners to behave the way they do.

Wisdom of Crowds says the CNBC phenomenon is a kind of "information cascade." An "information cascade" is a kind of "group think" where people follow the group's decision without evaluating the facts for themselves. For example, I buy a stock because you think it's good, and my friend buys a stock because he sees me buying it, and my friend's friend sees my friend buying the stock so he buys it, and on and on. This can result in a group that does not have diverse points of view and thus makes some really bad decisions.

Alright, now this is all very interesting, so here's a fact that might really disturb you:

The most effective way to maximize your portfolio return is to diversify your investments among many loosely correlated asset classes.

I could have easily said "Save 15% to 20% for retirement" or "If you have 5-7 years to invest, do not worry about fluctuations in stock prices because the average return over the time period will be greater" or even "Don't save, invest in real estate!"

Admit it, how many times have you heard these statements? Have you analyzed the data yourself? Have you thought about these concepts? Have you considered alternative strategies?

Are you just participating in a long standing information cascade or is the wisdom really correct?

Outsourcing, "4-hour Work Week" and You

Greg and I were chatting about the subject, and he asked me to summarize the content in this space.

Fact 1: outsourcing, hate it or love it, has been with us for a long time, and will be here for our whole lives.
Fact 2: you can accomplish many ambitious projects, if you're good at outsourcing the grunt work - see "The 4-hour Work Week"
Fact 3: is one of many, many existing sites that offer an enormous pool of talent at very reasonable rates

Some more about : from my experience with it, you can get quality work delivered to you for very low rates. the reason for this is that freelancers from all over the world are bidding for your projects. from some of the bids i've read, it seems there are 5 grad students in an emerging country, huddled around 2 computers, ready to crank out PHP code in a couple of hours for 50 bucks.

Of course, it doesn't always go smoothly, and even if you rely on the site's rating system, you're still not guaranteed success. but so long as you provide very specific description and instructions, and you're not going with the lowest bid, it's pretty doable.

what's the point, you ask? the point is that you're freed from grunt work, and can deal with higher-level things, like interpreting your vision into a tangible design, coming up with architecture, or brainstorming up a radical paradigm shift. then, bid out the grunt work to ready-and-willing freelancers. the only restriction on how ambitious you can get is the amount of seed money you have. oh, and also, don't create projects like "need a myspace clone, $200". be realistic.

Friday, November 30, 2007

Roth 401k vs Traditional 401k

I recently received the following question from an intelligent reader of moneyconversations:

How can we sign up for the Roth 401k? Does the money convo guru have any thoughts on that besides "If you expect to have a higher tax rate later or have many years of growth (hence more money to tax), then pay them now with the Roth?"

Well, the money conversations masta of finances, me, will happily answer all questions. Disclaimer: I am only highly qualified primarily because I have read about Rich Dad. Don't worry my advice isn't "quit your job and buy real estate"

Now, the only wisdom on the Roth 401k choice that I am pretty sure about is this, which I got from listening to money-guy (Listen to this show to get the details, or just read the site:

Put the assets that you expect to gain the most value (like small cap) in the roth 401k. Put the assets you expect to grow the least (like bond funds) in traditional 401k. Since the advantage of Roth is you don't get taxed on the earnings, you want to get most of your investment gains in the Roth. Since your bond fund isn't going to grow much put in in the traditional 401k, it's probably a better idea not to lose the initial capital by having it taxed.

This is an opinion:

As for that formula for Roth vs Non-Roth, it's an interesting one. Given our long horizon, it probably fine to go with the Roth and fine to go with Both too. Both is good to give us more flexibility when we reach retirement age. I could also scare you with facts about the government's social security liability which would make you want more Roth.

And here's another fact pointed out by another avid reader of this popular blog:

If you can afford it, you can effectively put more money into a Roth account than a traditional account. If you put $15.5k a traditional 401k, you'd only have ~$10k were you could withdraw tomorrow. However, if you put $15.5k into a Roth 401k, you'd still have $15.5k.

My personal take away:

Personally, I'm going to beef up my Roth because right now I have nothing in Roth assets and because I am young enough for it to be worth it. I plan to move my assets in the direction of small cap and international stocks in the Roth and large and bond funds in the traditional, but that will take some time because I don't think you can transfer funds between the two.

See you in 40 years at retirement. We shall see who is buying a boat and who is working at McDonalds!

Wet and Wild Idea

I heard a story on the radio talk about how people in some part of the US were collecting rain water in huge barrels because there was a water ban.

Then I thought, well, how could you use this harness water in other ways to make $. As you can imagine, it's hard, but here's what I came up with: Use collected water to make a hydroelectric generator. and as a bonus To get exercise, refill water container manually

So can you see yourself doing this?
1. go here and build your own generator
2. Install pipe on your deck that goes down to the generator.
3. When it rains, your cell phone gets charged
4. After it rains you carry buckets of rain water up to the top of your deck, and pour it down the pipes to simulate rain so you can charge your wife's cell phone battery
5. Brag to your friends about how smart you are and how big your muscles are from all that exercise!

See the figure on the left for detailed design information. Enjoy!

Wednesday, November 28, 2007

Home Property Values to Fall $1.2T in 2008 - Study

From Seeking Alpha summary of a Wall Street Journal article:

A study commissioned by the U.S. Conference of Mayors and the Council for the New American City released Tuesday says that over the coming year the property value of U.S. homes will plummet $1.2 trillion, and at least 1.4 million homeowners will lose their properties to foreclosure. The study, prepared by research firm Global Insight, predicts 1.9% economic growth in 2008 -- a figure it says would have been 1% higher were it not for the ill effects of the mortgage crisis. The study predicts 7% home price declines over the year, and a 16% drop in California. However, while the current crisis would "go down on the record books," Global Insight said it will not "bring the economy grinding to a halt." Indeed, we expect job growth in 2008 to be 0.85% and GDP growth to be 1.9%," it said. "In 2009, those figures will be 1.2% and 2.9%, respectively. In the end, the economy will not come off the rails, and we may actually have learned something."

so, should i be saving up for a down payment on vacation/rental property somewhere in the country?

Monday, November 26, 2007

Wikipedia quote to make you rich

Here's the quote

"Many index funds and exchange-traded funds track the performance of the S&P 500 by holding the same stocks as the index, in the same proportions, and thus attempting to match its performance (before fees and expenses). Partly because of this, a company which has its stock added to the list may see a boost in its stock price as the managers of the mutual funds must purchase that company's stock in order to match the funds' composition to that of the S&P 500 index."

So, if you could just predict which stocks are going to get into the S&P500, you would have great stock picking success and of course make millions, retire early, buy a boat , and say things like, "It's important to take risks" whenever some young person comes to say hi.

Saturday, November 24, 2007

You can make a million too

So, do you want to make a million? Do you want to be a guru?

Take the 10 ideas in this blog post:

and then make a 10 chapter book. Make sure you have a good looking photo of yourself on the front. You get bonus money if you can get on Oprah.

What? you think "how can this possibly work, anyone could do that!" Normally, I would be skeptical too, but if Kiyosaki, Orman, David Bach, etc.. can do it over and over agan over the course of half a decade, why couldn't you?,

Sunday, November 18, 2007

Hey Ebay Man!

Helloooo blogosphere!! Here's a random money making idea:

It's called "" where XYZ can be any product such as magic cards or hummels.

Hummels are these cute little figurines like the one pictured here.

Now lately, I've been selling a bunch of them, and I was noticing how hard it is to find out how much they cost. Also, I noticed if I knew how much a certain hummel cost, and found one for cheap, I could do an "ebay flip".

So let me just get to the idea. I want to build a site It's so simple. It would retrieve the latest prices for all the hummels on ebay. When one is about to be sold for less than the average price, then the software would alert me and I could go buy the thing and resell it for a higher price.

But wait! that means I have to do the work of receiving and selling the hummels. So here's the extra idea, I "sell" access to this list to the highest bidder. For a share of the listings a user can get up to date, last minute, notifications that a cheap hummel is about to be sold. The system does not send notifications to any other users about those hummels until someone else offers me more money for access to the listings.

So here's an example:
Joe is browsing the site, looking at prices for hummels, but the price quotes are delayed by a day. He decides to buy access to the up to date prices for 10 types of hummels at $5 per month. During the month, the system alerts him that 5 hummels are cheap. Joe buys them and flips them for a profit of $5 per hummel. Joe is very happy. That is until Harry comes along. Harry wants in on the action and is willing to pay $10 for the alerts. The system let's Harry do it and kicks Joe out of the action. Then Harry begins to get notifications and Joe does not.

And the great thing is that this pattern can be repeated for many, many types of items without extra work.

What do you think?

Tuesday, November 13, 2007

Sux but I'm happy

This is an update on the previous post. All these negatives are really depressing. That aside, -1.81 is artisan and -1.03 is dodgx so there I can at least feel good about owning the big companies right now. I guess these things turn around eventually.

Friday, November 9, 2007

Why you shouldn't check your mutual fund balances every day

Ok. This is some advise just for everyone else besides me. Don't check your mutual fund gains every day only look at 3 to 5 year performance.

Of course I never do that. I personally like to look every day just so I can feel that pain and guilt for making the wrong investment changes.

Anyway, so I'm finally happy with a day's returns. I want to capture it here so I can feel good. Observe the following gains:

A while ago, after Artisan went up 10% I sold a bunch and bought Dodge. Then Artisan went up 10 more percent and Dodge went up like 1. I has been hard, since I am obsessed with watching the totals every week, to not buy Artisan back.

Well look at the chart. Notice how Dodge & Cox has gone up while Artisan Mid Cap has gone down 1%? Take that Artisan, you volatile pile of junk. I will not surrender to you. I will not come back and buy you just because you are doing well now. I am better than you. I will not be controlled!

Tuesday, October 30, 2007

The red sun rises over the dragon

Five letters: NTDOY

That is the stock symbol for Nintendo. During the months of July-September it sold 3 times more units than PS3 and XBox. The demand is still higher than supply. The holiday season looks good, but the biggest news is this: Nintendo will begin selling in China for the first time ever in 2008.

With the Chinese market exploding the Wii should also. China is making millionaires percentage wise faster than most other countries in the world.

I only wish I had joined in sooner. I think this is a good example for dollar cost averaging up.

Thursday, October 25, 2007

REITs Could Take Biggest Hit In Decade - Economists

"American REITs are forecast to suffer their worst decline in almost ten years and could drop up to 20% within the next year, Bloomberg reported Thursday. Economists cited by the New York Times estimate that problems in the mortgage markets could ultimately cost financial firms and investors up to $400 billion. REIT stocks have outperformed the S&P 500 every year since 2000, but are expected to suffer as higher borrowing costs put the brakes on takeovers and slash property values. "REITs are overvalued by 25-40% relative to stocks and bonds, and cash flow yields are too low," said University of California economist Kenneth Rosen. Investors are steering clear of bonds backed by subprime and commercial mortgages, and their reluctance to lend is affecting the value of trusts that own commercial properties, apartment complexes, hotels, shopping centers and mortgages. The Bloomberg REIT Index has fallen 16.5% since the Blackstone Group bought Equity Office Properties Trust for $39 billion including debt. Bloomberg notes that the last time the Index sank more than 10% was in 1998, when investors were pouring money into Internet stocks. The only segment of the Index not to lose value this year is warehouse and industrial, which rose 11.5%. Public storage REITs suffered most with a 19% decline. "There is plenty more shakeout to go in the REIT market," said American Century Investments fund manager Jeffrey Tyler. "Property values are going to be under pressure, and by extension that will move to REITs."

a lot of speculation there, but still, it might be a good idea to be ready to jump in when the housing market bottoms out in 2008 or 2009.

Wednesday, October 24, 2007

I've had it! (for now)

I just listened to

Mad Money Machine on the 12 Steps

I'm so depressed. It totally trivialized active investing as a childish and useless behavior. I feel like a loser.

I'm going to go index, target retirement fund crazy now, It was nice knowing you!

Tuesday, October 23, 2007

Greg goes on a learning quest and obtains deep understanding!

Have you ever wanted to believe something was true? So much that you kept searching the internet until you found enough articles that backup up your position? Do you remember finding what you desired and not seeing the any contrary information? Did you tell you friends how wrong they are by citing fact after fact and anecdote after anecdote?

Well I have been on such a quest, but my results are different, I have actually found the truth. (The previous paragraph does not apply to me, obviously) I have correlated results from 3 sources. So what is my new found belief:

You can do better than just blindly rebalancing to your target allocation.

The first source is the Money-guy podcast. In one of his podcasts, Brian mentioned how he reduced his allocation of commodities because oil is overpriced. Then, 2 weeks later, he responded to criticism that his commodities trade was market timing. On the contrary, he states that he was "taking advantage of opportunity." He explained that if you make these decisions based on market valuation, you can increase your profits. Wow! Cool. He also gave us a hint that small stocks are overvalued now and large stocks aren't. Start selling!

Now the second source is the entire book I read called "The Intelligent Asset Allocator" This book was mostly a horrible, "go buy index funds," boring read, but it actually did make a few points about asset allocation. 1. You should buy asset classes which have been down recently. 2. Since trends are persistent for some time, you shouldn't rebalance often, maybe once per year or when the auto-correlation(Don't ask me to explain it) is a certain way. 3. Maybe increase your exposure by 0.1% for every 1% the asset goes down. 4. How about value cost averaging instead of dollar cost averaging? and 5. All this is psychologically difficult.

Phew. sorry about that boring synopsis. Are you still with me? We are talking about a new found belief!
The last source is an entire book written about asset allocation called: Book coverUnderstanding Asset Allocation: An Intuitive Approach to Maximizing Your Portfolio

I have only read the introduction, but it claims it will actually explain asset allocation in more detail and 300+ pages!

Ok so to recap. I believe now that I can change my asset allocation based on "valuation" of certain assets to increase my returns, but I just don't know how to do it.

Do you believe me or shall I start citing facts and anecdotes?

Robin Hood

I watched the movie "Maxed Out" last night. It's about how people get saddled with debt and have to declare bankruptcy. There were a lot of crying people in the movie saying that they didn't realize that they were getting into trouble. That they trusted the credit card companies to only lend them money if the credit card companies thought they could pay them back. I know I know, what idiots! They balanced out those losers with some people who seemed to have legitimate claims against the credit card companies.

In any case, the real good part was when this professor from Harvard said something like "Credit is sooo lucrative" then she repeated "You don't understand just how lucrative it is, it's excessively profitable"

That made me think, it's our job as financially responsible people to take as much money from the credit card companies as possible: every free offer, every 0% interest deal, every free mile. We should extract every last penny of cash back. We must make the credit card companiespay for exploiting others.

We have the gift of being able to pay our debts on time and to be able to add. Let's put that to good use

Thursday, October 18, 2007

Book: Intelligent Asset Allocation

I am listing to a 4 CD book called "Intelligent Asset Allocation" thinking it would tell me something about asset allocation, but it turned out to be another "buy index funds and here's why book"

I hate that.

I listened to 2 whole cds which lead up to that statement. Duh! The funny thing is that there was a chapter on asset allocation, but it was really shallow. It told me the following:
  • Invest in many asset classes invest at least 3, but you can add more!
  • Spread your assets among the assets. Own more large cap stocks if you want your returns to mirror the market return, the less large cap stocks you own the more change your returns will be different from every one else's
Note: it doesn't tell you specifically how to calculate how much you should allocate to each asset, only that you should get a bunch, maybe do equal allocation, maybe not, depends on something that you can't make a decision on: "how much you will freak out if you don't get returns like the S&P 500"


Well there are another 2 CDs left. But what is 2 hours wasted in the million ours of commuting I do.


Monday, October 15, 2007

Trust your Mechanic

Here is the plan for a new kind of car repair shop.

The main problem with car shops is there is no way you can trust them. Ever time I take my car in, I can picture the person at the front desk getting his training. "Don't you dare let that customer out the door without getting them to fix something. Even if everything is fine, find something that you can repair, for example, the drive belt always looks warn, customers are a sucker for changing the drive belt!" (I won't mention how many times I've changed mine)

The problem here is this: The mechanic is not on your side. His incentive is to find as many things wrong with your car as possible.

So here is what I suggest: A subscription-based car care. The way this works is you pay a monthly fee to your mechanic and in return he will charge you only for the parts he needs to fix your car. That way, his incentive is to make your car go as long as possible without needing repairs. He has no motivation for changing your drive belt if it's perfectly fine, he doesn't make any extra money as a result.

Now the trick is, how much would the monthly fee need to make it worth it for consumers. Certainly customers would be willing to pay a premium for having a trust worthly Mechanic, but not that much of a premium.

I think you have to base this calculation on how much an oil change costs. If you could make the price not that much more than an oil change, consumers would buy it up.

Let's say it costs on average $35 for an oil change at place like Jiffy lube and any car needs to change it's oil about every 3 months or 4 times a year. It also takes a person about 15 minutes to change some oil. The question is: How many cars do you need to have enrolled and how much money do you have to charge in order for it to be worth it?

A scenario: You have 3 employees. A mechanic (4000 per month), an oil change kid (costs 2000 per month), and you. You get 800 cars and charge them 15 per month, equivalent to a $45 + $15 for parts oil change. Not that bad for the consumer. You make a total of 12,000. Paying your self a pretty good salary of 6000 minus garage expenses.

You get the oil change kid to do all the oil changes, you have the mechanic do any complicated work, and you sit at the front desk and say hello to people. Your oil change kid can change the oil for 160 cars per week, giving him plenty of slacking off time since only about 100 cars will need to change their oil each month.

Would people actually pay $15 per month for that? I certainly would.

Oh well so much for living in a fair world. If one of you out there is reading this and knows when you really need to change a drive belt, quit your job and start a business! Or maybe I'll quit my job and start a computer maintenance business.

Thursday, October 11, 2007

candy vending machines - a sweet/tart/sour quarter-laden cash-cow:

3 reasons for posting this:
- talks about passive income
- talks about candy vending machines, which we've mentioned before
- shows an example of seeing value where others don't ("one man's trash is another man's treasure"), a subject near and dear to my heart, since i've easily saved over $1000 during the first year of home ownership by buying on craigslist and curb-shopping

thoughts, comments?

Tuesday, October 9, 2007

Free mocca-latte-double shot

Ok so here is the plan...


My money blog, just posted about the discover card's 0 percent for 12 months plan. Plus you get 5% cash back on certain purchases like airlines at certain times of the year. If you want more go check out:

Do something practical with that:

say you take a 10000 balance transfer.
option 1: put it in a CD and make 500 in interest, pay taxes on it, pay fee to discover, and at the end you might have 300 bucks. Not bad and not too risky so long as you can make the monthly payment
option 2: pay off some debt, risky because this represents extra money you would not normally spend. You still have to pay the minimum payments! Just calculate how much extra money you have for the debt and then that's how much you take out with the card.

With either option, if you are smart, you will make some money.

Now that you have a reason to get the card, think Latte!

So the card gives you 5% cash back on various things at different times of the year. If you spend 1000 on a flight for work, you will get reimbursed and get a $50 cash back! What's more, you can get a $40 gift card to Starbucks by cashing in only $20 of cash back. So that's like a 10% cash back amount! Phew!

Take that David Bach! (note: do a web search for David Bach's Latte factor and then you will LOL)

So then you can drive up to a Starbucks every morning, stress free knowing that you are not burning away you retirement money with a nasty habit. Bring on the mocca-latte-double shot espresso-pumpkin spice soy chai beverages!!

Monday, October 8, 2007

sector investing, got any courage?

If you go there you will see a whole bunch of sectors going up and the financial sector going way down. So, it's time to buy it up! Buy that loser sector! If it goes down in price buy more! The more money you lose the better. What a bargin!

In fact, I am so committed to this plan that I bought 100 fake shares and put it in my google finance portfolio.

Wednesday, October 3, 2007

The "Real" DOW

Whereas I have previously ignored opinions as the one presented in the link below, I'm not so dismissive anymore - not when every morning's WSJ bring more news of home sales falling.

Even if these predictions will prove to be only partially correct, right now seems to be a good time to discuss strategies for staying afloat or succeeding in a high-inflation market.

More Ideas from book: The Wisdom of Crowds

Here's another idea: Look at the top 10 holdings of all the mutual funds in a category, then buy only those stocks that are rated the highest, but all of the managers.

Combine those ratings with the view points of all the random boneheads on the internet like me who know "nothing" but yet recommend stocks and you have the golden combination.

That is, a bunch of experts (ie. the mutual fund managers) with the added wisdom of a bunch of dummies (bonehead bloggers).

Tuesday, October 2, 2007

Reaction to book Wisdom of Crowds

So I am reading this book called "The Wisdom of Crowds." It's a great book. One of the points is that under the right conditions, a group of people can be way smarter than individuals. Furthermore, it goes on to say that a group of experts does worse than a group of one expert and several dummies.

Ok so what does this mean? Well, it means that experts aren't so amazing. It means that you shouldn't go look for an expert to solve your problem. You should look for a group.

Ok so what can we do to make a million dallas off of this? (You were waiting for me to speak about this weren't you?) Well it's simple, start "Wisdom of Crowds Funds"
. This is how it would work:
1. Hire a few stock picking gurus
2. When they have a theory like: Will Coke's new drink sell or will every one slurp Pepsis instead? You survey every one in the fund. They come back with a yes or a no and the stock gurus use that to make their decision on which company to buy.
3. Retire to island in the pacific.

It's as easy as that!

The genious is that the public will have information about the product of service in question that the stock guru's will never have. Each person adds their tiny piece of information and it aggregates together to be a really smart assessment. Thus, we've made the situation where the expert is teamed with a big group of dummies, and so the group decision should be better than any team of highly paid stock maniacs.

I'm suprised no one has taken advantage of this. There are millions of people who hold any given fund. Every single one of them is motivated to make the fund succeed. No one has bothered to get them involved in the stock evaluation! Amazing.

Anyway, I'm going to go back to paying my dumb experts 1% of my money so they can use their all-mighty powers to know which way the market will turn. Wish me luck!

Frustration at the fireside

Here is a simple, but genius idea I came up with while trying to make a smore on a really terrible gram cracker (side note: I paid $0.50 extra for the dam things because they had "a good source of calcium" but it's not worth it because they taste like cardboard!, ok back to the idea):

Gram crackers should be shaped like mini bowls in order to properly hold the marshmallow and chocolate.

Duh! How come no one has created such a thing! So next time I venture out to a fireside, I will have my home made vegan marshmallows, plus bowl shaped gram crackers I cooked in my cupcake pan! Wish me luck!

sector investing? the way to do asset allocation?

So, if one sector is doing bad, then why not buy a ton of it because it is bound to go up, then when it has peaked, sell!

here are some bad links: (junk)

Well that has a term its called "sector investing" or "sector rotation" It's an interesting idea, but I wonder how hard it is.

The conventional wisdom is to set your asset allocation based on your risk tolerance and age until retirement. However, I don't think the professionals stick to that, and I wonder if you can do better. Sector investing might be one way, but what is the real way?

Anyway, case in point: I was listening to and Brian P said the shpeal about not trying to time the market. Well, then if you listen closely, you will see that he says "I'm keeping my real estate allocation low because it's getting killed right now" or "I'm taking some profits from commodities because oil just had a huge run from $50 per barrel to $80." He's tweaking the asset allocation! How does he do that?

Free trading?


Check this out free trades!

Are you excited?

I wonder if it would be worth it to use the account to buy ETF's
Or even I could just throw my $2500 into Bank of America and other dividend paying thingies and earn my 5-8%.

If you use it to buy mutual funds, I think there is a fee