Personal Finance

Accident-Prone Markets: Dave's Daily

twocents@thestreet.com (Dave Fry) — Sat, 11 Feb 2012 00:04 GMT

With volume remaining holiday light and many indicators signaling overbought conditions, we've suggested markets were an accident waiting to happen. This is why what long positions we had were only half-sized. Much of Friday's losses, and the trigger for a decline, were tied to angst and confusion over Greek debt and austerity deals. ...

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Top 10 U.S. Real Estate Sector ETFs

twocents@thestreet.com (Dave Fry) — Fri, 10 Feb 2012 20:58 GMT

There is currently an expanding list of nearly 20 ETFs oriented to primarily REITs (Real Estate Investment Trusts) with more on the way. The following analysis features a fair representation of ETFs available. We believe from these investors may choose an appropriate ETF to satisfy the best index-based offerings individuals and financial advisors may utilize.

Despite the overall poor condition of U.S. real estate markets REITs gain more acceptance given their unique characteristics. REITs are generally divided into commercial and shopping malls, office properties, hospitality and apartment rentals. Most of these sectors are doing just okay while there is a boom in apartment construction and rentals making that sector healthy. Many REITs offer very good yields and demographics in the U.S. especially feature an investor appetite for higher dividends. However, investors should be careful to remember often dividends can be combined with return of principal making for potential tax considerations.

ETFs are based on indexes tied to well-known index providers including Russell, S&P, Barclays, MSCI, Dow Jones and so forth. Also included are some so-called "enhanced" indexes that attempt to achieve better performance through more active management of the index. ...

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Dion's Friday ETF Winners and Losers

twocents@thestreet.com (Don Dion) — Fri, 10 Feb 2012 19:45 GMT

NEW YORK (TheStreet) -- Welcome to Don Dion's "ETF Winners and Losers." Be sure to stop by throughout the week to find out which ETFs are gaining or losing. Winners

iPath S&P 500 VIX Short Term Futures ETN 8.0%

After three days of gains, the fear-tracking VIX index took off at the end of the week as concerns began to resurface regarding in the ongoing Greece debt saga. VXX has relished in the market's weakness, recovering all of its February losses. ...

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What Happens if the Payroll Tax Cut Isn't Extended

twocents@thestreet.com (Seth Fiegerman) — Fri, 10 Feb 2012 18:54 GMT

NEW YORK (MainStreet) -- If Congress fails to approve an extension on the payroll tax cut in the next two and a half weeks, the average household will see their take-home pay shrink by about $20 each week. While that may not sound like much at first, one research group predicts that it will significantly weaken an already fragile economic recovery.

Research firm IHS Global Insight originally forecast that U.S. economic output would grow by 2.1% in 2012, assuming that the temporary payroll tax cut was extended through the remainder of the year. According to Gregory Daco, an economist at the firm, the annual growth rate would fall by 0.3 percentage points to 1.8% if the tax cut expired at the end of this month. If the payroll tax cut expires, it could push the U.S. economic growth rate below 2%.

"The tax cut might seem small, but it does impact the way people are feeling," Daco says. "If after a couple months consumers realize they are being paid a little less, that will start to have a pretty big impact on their spending." That in turn would have a ripple effect on businesses and their ability to hire. ...

3 Things You Should Know About Small Business: Feb. 10

twocents@thestreet.com (Laurie Kulikowski) — Fri, 10 Feb 2012 16:05 GMT

NEW YORK (MainStreet) -- What's happening in small business today?

1. 1099-K reform. Starting with the 2011 tax season, the Internal Revenue Service is requiring businesses, particularly e-commerce retailers, to adhere to the reporting requirements of the 1099-K form on debit and credit card receipts. ...

Homebuilders ETF? Trade ITB

twocents@thestreet.com (Dave Fry) — Fri, 10 Feb 2012 13:56 GMT

Looking to invest in a Homebuilders ETF? I'd recommend trading the iShares Dow Jones U.S. Home Construction ETF (ITB).

Valentine's Day Is Dumb and You're Wasting Money

twocents@thestreet.com (Jason Notte) — Fri, 10 Feb 2012 13:00 GMT

NEW YORK (MainStreet) -- Valentine's Day is best illustrated in one series of actions: Withdraw from an ATM what you'd usually spend on date night, withdraw that amount again, show it to the person you love most and then flush the entire sum down the nearest toilet.

That's basically the way every U.S. consumer has spent Valentine's Day since Esther Howland imposed the first mass-market Valentine's Day cards on the American public during the 1840s. Now the whole sordid, red-painted affair is a nearly $18 billion industry that trails only Thanksgiving ($30.5 billion) and Christmas ($135 billion) in holiday spending, according to IBISWorld. That's almost $3 billion more than what's spent on Mother's Day. Sorry, mom, but they just met at a bar two months ago and neither of them are getting any younger. Valentine's Day is a melange of markups and misery, starting with the dozen roses selling for an average of about $59 in early January but around $80 the week before Valentine's day.

That spending is only going up this year. The National Retail Federation estimates that American suckers ... er ... lovers are about to spend an average of $128 a pop to avoid getting the silent treatment or a stern dressing down. That's a nearly 8.5% increase from last year and includes an average $37 worth of flowers and $72 for a night out. It's a heart-shaped box of lovestruck spending that hides a rancid center of markups and emotional extortion. ...

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Buffett Bashes Gold Bugs

twocents@thestreet.com (Don Dion) — Fri, 10 Feb 2012 11:00 GMT

NEW YORK (TheStreet) -- Investors are waiting on bated breath for the release of the Berkshire Hathaway annual shareholders letter.

It is one of the most closely watched and heavily scrutinized pieces of literature in today's business world. Droves of individuals from Wall Street and Main Street flock to this missive to find out what is going on inside the mind of billionaire, Warren Buffett.

In addition to providing readers with insight into the current state, future plans and overall outlook for his firm, Buffett also takes time to lay out his views regarding the global economy and offer wisdom regarding the general investing world. Warren Buffett ...

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Love Your Retirement Plan? Take the Quiz

twocents@thestreet.com (Guest Contributor) — Fri, 10 Feb 2012 11:00 GMT

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

Richard Schmitt ...

Slow Ascent for Market Continues: Dave's Daily

twocents@thestreet.com (Dave Fry) — Fri, 10 Feb 2012 00:05 GMT

Jobless Claims (358K vs 370K expected) continued to show some improvement but inside the numbers was one standout data point--there was no gain in "new hires". So we're still just seeing people falling off the roles. Greece was back in the news with an announcement of an agreement. Later in the day came some grumbling about a lack of details with some saying things won't get sorted-out for another 15 days. (Per the AP: "German Finance Minister Schaeuble. Greek deal on spending cuts appears to not yet fulfill bailout conditions.") The final outcome (for this round) theoretically comes on the March 20th drop dead date. But here's the calendar for what's ahead in the euro zone. ...

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Top 10 Global Real Estate ETFs

twocents@thestreet.com (Dave Fry) — Thu, 09 Feb 2012 20:03 GMT

There is currently an expanding list of nearly a dozen ETFs oriented to primarily to global REITs (Real Estate Investment Trusts) with more on the way no doubt. In the following analysis we stick with our top ten themes while mentioning, where applicable, other choices. Given the limited choices anyway it represents the ETFs available.

The established global REIT market has been volatile and rocked by the eurozone crisis and contagion to other global markets. In the list you'll also note some China related issues which have caused investors concern over apparent property bubbles in both mainland China and Hong Kong. This issue had driven down prices but increased yields which are a staple and attraction for most investors. REITs remain popular with investors seeking greater dividends and income although many current yields remain historically low perhaps misleading some investors expecting more. Further, some with higher dividends feature return of principal which should also be evaluated.

One caution for this list is many of the ETFs in the list are new and/or have lower AUM (Assets under Management) than we would ordinarily prefer. This is a caution most investors should heed particularly when placing trades. "Limit orders" are always an important technique when trading and it becomes more important with less liquid securities. ...

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Dion's Thursday ETF Winners and Losers

twocents@thestreet.com (Don Dion) — Thu, 09 Feb 2012 19:32 GMT

NEW YORK (TheStreet) -- Welcome to Don Dion's "ETF Winners and Losers." Be sure to stop by throughout the week to find out which ETFs are gaining or losing. Winners

Market Vectors Solar Energy ETF 7.9%

Solar energy ETFs are gaining ground, helping KWT and the Guggenheim Solar ETF punch through its highs in October. Today's action extends TAN's winning streak to seven days. ...

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How to Adjust Your Budget if the Payroll Tax Cut Isn't Extended

twocents@thestreet.com (Seth Fiegerman) — Thu, 09 Feb 2012 17:13 GMT

NEW YORK (MainStreet) -- The payroll tax cut extension is set to expire at the end of this month unless Congress can agree on a plan to renew it for the remainder of the year -- something looking increasingly unlikely.

While the Obama administration and many in Congress agree the tax cut is worth the $100 billion or more it would cost the government to extend it, legislators are split on how to fund it. Unfortunately, without an extension, many Americans may soon be struggling with their monthly budgets. Here are a few ways to adapt to the possible reduction in take-home pay.

Just how much a person saves with the tax cut depends on one's income, but the typical family earning $50,000 a year pockets an extra $80 each month from money that would otherwise go toward Social Security and Medicare taxes. As one woman noted in December before the latest extension, that extra money is "the difference between having food on the table the next week and not." ...

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Get It for Less: Smartphones

twocents@thestreet.com (Matt Brownell of MainStreet.com) — Thu, 09 Feb 2012 16:22 GMT

NEW YORK (MainStreet) -- Most high-quality smartphones cost at least $200 when they first come out (and when paired with a new two-year service contract), but with a few notable exceptions, there's no reason to ever pay that much.

Louis Ramirez is a senior features writer for DealNews, a money-saving Web site that frequently gathers deals on new phones, and he shared his expertise with us to pass along the best strategies for finding a good deal. You once needed to wait at least a few months before you saw any kind of deal on a new smartphone, but the time frame for price reductions is much shorter than it used to be.

Wait a few weeks It used to be that you needed to wait at least a few months before you saw any kind of deal on a new smartphone. But with the market flooded by so many new Android phones on a weekly basis, the time frame for price reductions is much shorter than it used to be. ...

Volatility ETN Offers Portfolio Hedge

twocents@thestreet.com (Gary Gordon) — Thu, 09 Feb 2012 14:20 GMT

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (ETF Expert) -- Volatility ETNs can serve as tools to protect assets that you already have in your portfolio. For example, 80% of the time over the last year, the iPath S&P 500 VIX Mid-Term ETN moved in the opposite direction of the S&P 500 itself. It follows that an active investor could purchase exchange-traded note protection if he is concerned about the magnitude of this seasonal stock rally.

How should you do it? Rather than sell economically sensitive U.S. stock ETFs in your mix -- possibly subjecting yourself to short-term capital gains or potentially throwing off your allocation -- you might purchase VXZ with a weighting of 5% to 10%. ...

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China ETFs Navigate Tricky Housing Bubble

twocents@thestreet.com (Don Dion) — Thu, 09 Feb 2012 11:00 GMT

NEW YORK (TheStreet) -- When it comes to global investing, one of the biggest and most closely watched stories over the past few years has been China's handling of its red hot housing industry.

This week, it appears as though a new chapter has begun to take shape. While interesting to watch, this is a story that conservative ETF investors would likely be best off following from the sidelines.

Fearing a bubble, government officials have taken a myriad of steps to reign in the breakneck growth of the real estate market. In the past, these proposed policies, which have included higher down payments, bans on third-home purchases, and placing limits on bank lending, had little impact on cooling expansion. ...

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Central Bank Liquidity Props Markets: Dave's Daily

twocents@thestreet.com (Dave Fry) — Wed, 08 Feb 2012 23:59 GMT

I would advise most to forget PEs, current earnings and dividends, global economic indicators and even Greece (if only temporarily). The number one factor driving global stock indexes higher are monetary policies and liquidity impact from the three central bank amigos. Sure markets are overbought and volume remains scant. The first condition is readily viewed by any number of respectable indicators: McClellan Summation Index (featured near the end of this posting), DeMark Indicators, Relative Strength Index and so forth). Light volume is due to ongoing investor flight as many sit on their hands. ...

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Top 10 Technology ETFs

twocents@thestreet.com (Dave Fry) — Wed, 08 Feb 2012 20:18 GMT

NEW YORK (ETF Digest) -- Currently there are nearly three dozen ETFs oriented to the technology sector with more on the way. The following analysis features a fair representation of ETFs available. We believe from these investors may choose an appropriate ETF to satisfy the best index-based offerings individuals and financial advisors may utilize.

We're not ranking these ETFs favoring one over another so don't let the listing order mislead you. Although we may use some of these in ETF Digest portfolios it's not our intention to recommend one over another.

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Dion's Wednesday ETF Winners and Losers

twocents@thestreet.com (Don Dion) — Wed, 08 Feb 2012 19:36 GMT

NEW YORK (TheStreet) -- Welcome to Don Dion's "ETF Winners and Losers." Be sure to stop by throughout the week to find out which ETFs are gaining or losing. Winners

Guggenheim Solar ETF 4.2%

Solar energy stocks are ratcheting higher, pushing TAN to its sixth consecutive day of gains. This multi-day rally has propelled the fund to levels last seen prior to its November sell off. ...

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ETF Mid-Week Peek

twocents@thestreet.com (ETF Digest) — Wed, 08 Feb 2012 19:14 GMT

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By David Gillie

NEW YORK (ETF Digest) -- This week the market launched into a state of euphoria that we haven't seen since the announcement of QE2 and pre-crash highs of 2007. Better-than-expected jobs number was the main catalyst. Bernanke testified before Congress and although he didn't say where, when or how, traders heard the market will never go down. Perhaps he blinked it with his eyes in Morse code. ...

Technology Mutual Funds That Look Enticing

twocents@thestreet.com (Stan Luxenberg) — Wed, 08 Feb 2012 16:23 GMT

NEW YORK (TheStreet) -- Technology stocks have been rebounding. So far this year, technology funds have returned 12.4%, outpacing the S&P 500 by 5 percentage points, according to Morningstar.

Has the sector gotten expensive? No, say some fund managers. "Technology is just about as cheap as it has ever been," says Ian Warmerdam, portfolio manager of Henderson Global Technology.

Portfolio managers say that for much of the past two decades, technology stocks sold for price-to-earnings ratios of more than 15, a premium to the S&P 500. But now managers say that the forward P/E is 12, about the same as that for the S&P. ...

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Government to Tighten Grip on Investments Three Years Too Late (Update 1)

twocents@thestreet.com (Frank Byrt) — Wed, 08 Feb 2012 16:01 GMT

(Adds that shares of several big money market fund managers slipped Tuesday on the report of the SEC's proposed industry changes.)

BOSTON (TheStreet) -- The Securities and Exchange Commission is floating several ideas about how to protect money market fund investors in the event of a financial panic. What has been proposed so far has the $2.7 trillion money market fund industry in a lather.

The SEC's proposals, still in the early stages, are seen hurting fund investor returns and likely precipitating big withdrawals, say fund industry representatives. ...

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A Plea for Help From 401(k) Land

twocents@thestreet.com (TheStreet Guest Contributor) — Wed, 08 Feb 2012 14:07 GMT

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By Richard Schmitt

NEW YORK (TheStreet) - Dear Uncle Sam, ...

Why UNG Is Worst Investment in the World: Opinion

twocents@thestreet.com (Daniel Dicker) — Wed, 08 Feb 2012 13:44 GMT

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (TheStreet) -- The worst investment in the world, the United States Natural Gas fund has again revealed how cruddy it is by announcing a four-for-one reverse split as of Feb. 22. Anyone who still holds this turkey expecting it to even approximate the price movement of natural gas should be convinced by this last move to get out of this horrible fund.

Futures-based ETFs start with a grave disadvantage in the ETF world: instead of using various groupings of stocks to replicate the movement in a sector, they must use futures contracts and over-the-counter swaps to try and capture the price movement of an underlying commodity. While there may be a terrific appetite for investors afraid or unwilling to engage in the futures market to bet on prices of natural gas or crude oil, there is really no good way to represent these commodities like stocks. Most of these ETFs are programmed to fail. ...

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Newt Must Channel Saul Alinsky to Win

twocents@thestreet.com (Kevin Baker) — Wed, 08 Feb 2012 11:00 GMT

NEW YORK (TheStreet) -- Most Americans, including myself, had never heard the name Saul Alinsky before Newt Gingrich accused President Barack Obama of being a "Saul Alinsky radical." Ironically, if Newt embraces Saul Alinsky's focus on empowering the voters that Mitt admits he does not care about then Newt can still win the Republican Party nomination.

A quick Google search convinced me that I needed to read Saul Alinsky's 1971 book "Rules for Radicals". Skipping past the $8.80 offer from Amazon.com, I borrowed the book from my county library as I had already purchased it with my tax dollars.

Newt Gingrich ...

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Greece Keeps the Lady Waiting: Dave's Daily

twocents@thestreet.com (Dave Fry) — Wed, 08 Feb 2012 00:05 GMT

"Never put off until tomorrow what you can do the day after tomorrow" ...

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Dion's Tuesday ETF Winners and Losers

twocents@thestreet.com (Don Dion) — Tue, 07 Feb 2012 19:57 GMT

NEW YORK (TheStreet) -- Welcome to Don Dion's "ETF Winners and Losers." Be sure to stop by throughout the week to find out which ETFs are gaining or losing. Winners

iShares Gold Trust 1.5%

Safe haven asset classes are taking a hit, indicated by the nearly 1.5% losses seen from the iShares Barclays 20+ Year Treasury Bond Fund. Meanwhile, gold is pushing higher, sending IAU and the SPDR Gold Shares to the winners list. ...

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Top 10 Industrial Sector ETFs

twocents@thestreet.com (Dave Fry) — Tue, 07 Feb 2012 18:43 GMT

NEW YORK (ETF Digest) -- There is currently an expanding list of 20 ETFs oriented to the industrial sector with more on the way. The following analysis features a fair representation of ETFs available. The list comprises basic manufacturing mixed with large defense sectors. We believe from these investors may choose an appropriate ETF to satisfy the best index-based offerings individuals and financial advisors may utilize individually or in a portfolio.

Where competitive issues exist and/or repetitive issues available at a fee cost saving we mention those as other choices. New issues are coming to market consistently (especially globally) and sometimes these issues will need to become more seasoned before they may be included at least in our listings. ...

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India at Critical Inflection Point

twocents@thestreet.com (ETF Digest) — Tue, 07 Feb 2012 17:13 GMT

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By David Gillie

NEW YORK (ETF Digest) -- India, Asia's third largest economy and the world's most populous democracy, is at a critical inflection point as it ends the fiscal year in March. The government announced an anticipated growth rate next year of 6.9%, down from 8.4% the previous fiscal year. Much of the weakening economy has been related to the struggles of it European trading partners. India's growth rate had been explosive prior to the 2008 crash. However, the Indian stock market had a 25% slump in 2011 even with an 8% growth rate. Much of the pressure on the Indian economy was excessive inflation. The government took strong measures to not only curb inflation but to draw outside investment. A further sign of positive monetary policy is an anticipated rise in interest rates. WisdomTree India Earnings (EPI) was the first all India ETF. ...

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Will More Jobs Mean More Taxes?

twocents@thestreet.com (CNBC) — Tue, 07 Feb 2012 13:05 GMT

By John CarneySenior Editor, CNBC.com

NEW YORK (CNBC) -- The better-than-expected jobs numbers released Friday may mean rising taxes for many workers.

January saw 247,000 new jobs added to the economy. Unemployment fell to 8.3 percent. ...