Resurrecting Your Nest Egg.

by Natalie Pace.

If you are over 25 and you lost more than 25% of your portfolio, please read this article now.

Photo by: Stacie Isabella Turk, Ribbonhead.com ©2008. Stylist: Arlene Hylton-Campbel, 818-710-0079

If you are over 25 and you lost more than 25% of your portfolio, your nest egg was never set up properly, nor was it "recession-proofed." Many financial professionals are paid on commission to sell you things, not to set up your portfolio according to the well-known plan, called Modern Portfolio Theory – an idea that won Harry Markowitz a Nobel Laureate in 1990 and was written half a century ago. This theory says that you ALWAYS keep, at minimum, a percentage equal to your age SAFE – i.e. not invested at all in stocks, equities, mutual funds, funds of any kind, etc.

During recessions -- something I warned of in my ezine as early as February of 2008 and every month since that time -- you want to keep an additional 10-20% over-weighted into safety. That means that a 25-year old would have 45% safe and would have experienced only 20% losses in her total portfolio today. (Calculated based upon the Dow Jones Industrial Average losing 36% between the high of 14,165 on October 9, 2007 and the October 28, 2008 close of 9,065.12.) A 50-year-old would have 70% safe and would have experienced a maximum loss of 11%. And yet, all around, there are people who are close to retirement who have lost 50% of their nest egg. This is a tragedy. It should not be occurring when there is a better way.

While you are hearing from people you might think are wise -- who are the same ones you listened to when you put too much of your nest egg at risk -- saying that you shouldn’t be doing anything right now because you would be selling low, and that you should have faith in the markets and wait for a recovery, the truth is that if you lost more than 25% of your nest egg and you are over 25, the plan you have was wrong, is wrong and will continue to be a bad strategy going forward – especially considering that the "downturn," which hasn’t been officially announced as a recession yet, is more likely to deepen before our economy improves. There were people who got the message when they lost everything in the DOT COM bust, and made the simple changes that I’ve been reporting on in my ezine since 2002, and are doing great right now.

Bill and Nilo Bolden have lost nothing – ZERO -- employing the strategies that I’m outlining for you below. They rebalanced in February of 2008, overweighting into safety. Even if you have already lost half of your nest, if you want to be on the winning side of investing and prevent further, unnecessary losses in your nest egg and position yourself for a more speedy recovery, it is imperative that you keep reading. This bear market is not over yet – not by a long shot.

It’s a New World. Century-old companies are imploding. Stock returns over the last ten years are at 4% -- only slightly above the rate of Treasury bills, at 3.3%, with significantly higher risk.

Source: Hulbert’s Financial Digest

At the same time, over that same ten-year period, there have been three GIANT bubbles, one in DOT COM stocks in 1999-2000, another in real estate between 2002 and 2006 and another in clean energy in 2007. If you had a strategy to actually capitalize on these run-ups, you would be doing fantastic right now – well above the dismal market average over the last ten years. If you didn’t, as most people didn’t, then you watched the gains and losses gyrate like a rollercoaster in your portfolio without any clue as to what was happening – until recently when the most dramatic downturn in 80 years rattled you to the core.

NASDAQ’s BOOM PERIOD (1998-2000): OVER 200% GAINS

REAL ESTATE’s BOOM PERIOD (2002-2007): OVER 100% GAINS

CLEAN ENERGY’s BOOM PERIOD (2007): APPROXIMATELY 60% GAINS

The Problem with Mutual Funds
Mutual funds in general are old products that don’t allow you to capitalize on industry, sector, size or style gains because they are full of everything and the kitchen sink. Many are invested in some of the worst dying industries on Wall Street – like tobacco companies and corporations that have debt obligations equal to more than ten or even twenty times the value of the company. General Motors’ liabilities total almost $192 billion, while the company’s value on Wall Street is a measly $3.5 billion.

My warnings on General Motors as a "faded" Blue Chip began as early as 2004, at the same time when I was applauding Google as the greatest IPO of all time (something that came to fruition when Google became the first company to go from IPO to over $100 billion market capitalization in under two years). You can view these articles firsthand in vol. 1, issue 50, vol. 3, issue 8 and vol. 1, issue 48, respectively, in the NataliePace.com online magazine archives.

Modern Portfolio theory and ETFs, with proper diversification and asset allocation, offer a strategy that allows you to capitalize on the gains of a particular industry, size, style or index, while keeping an appropriate portion of your nest egg safe. Most people think they don’t have a choice and have to take what the 401 (k) provider gives them. That would be like thinking that the local fruit stand is the only option for food – untrue!

Just as the car made travel easier than riding in a horse-drawn carriage and planes made international travel easier than going by boat, Modern Portfolio Theory and Exchange Traded Funds are relatively new innovations that allow the investor greater security, higher gains with much less effort! The problem is that many Certified Financial Planners and brokerages with old school ways were not offering this way to you because they weren’t paid to sell them to you. They were paid to sell mutual funds, which offer a much higher commission structure to the CFP. The online, discount brokerages are leading the charge for ETFs, however, and with a few minutes of your time, I’ll explain how and why.

Here’s how the strategy of Modern Portfolio Theory (plus ETFs) works:

1. Invest in emerging products, energy and technology, not dying industries
2. Invest in wisdom, not the old way of doing things
3. Diversify and rebalance with a wealth blueprint that is appropriate to your age, instead of blind faith, buy and hold whatever my broker says
4. Know what you own instead of holding a big basket of everything, including companies you despise

It’s easier than you think, faster than you can imagine and more effective than any other strategy on Wall Street for Main Street investors…

1. Invest in emerging products, energy and technology, not dying industries

Bill and Nilo Bolden used the following pie chart which I drew on a napkin to recession proof their portfolio and to date have lost nothing. Here’s why and how.

Asset allocation (always keep a percent equal to your age SAFE)
During a recession, which I began warning of in February of 2008, you want to overweight into safety. This is not market timing; it is rebalancing. Bill is 55. Therefore overweighting an additional 20% into safety for the pending market downturn meant that 75% of his portfolio had to be in T-Bills. (Note that Bill then had 75% of his nest egg safe, not just the 50% outlined in the above pie chart for 50-year-olds during more normal market circumstances.)

Why T-bills and not money markets? We knew money markets were risky and they were losing money! It was easy for Bill to see that T-bills returning 2% was better than money markets at -2% return, which was available right on the first page of his 401(k) plan!

There are always industries, products and companies that are emerging and others that are suffering. A great financial news organization, like NataliePace.com, earns our reputation by keeping you informed. What are the track records of the pundits you are listening to on television?

Industry diversification
The remaining 25% of Bill and Nilo’s nest egg should have gone into small, medium and large caps, value, growth, clean energy, international, biotechnology and gold, however, the mutual funds offered by the 401(k) provider didn’t allow for that kind of diversification. Therefore, Bill and Nilo put EVERYTHING into T-bills while Nilo shopped for a provider that did offer ETFs and industry diversification.

By doing the right thing – demanding good products and not simply doing what was easier by selecting the only products that were offered to her – Nilo hasn’t lost a dime to date during the horrible Wall Street meltdown of September and October 2008. Many of Nilo’s colleagues followed her example and have lost nothing as well. Nilo’s bosses didn’t believe Nilo’s plan was better than the one that their financial advisors were telling them to do, and have lost hundreds of thousands of dollars as a result. You can bet they are listening to her now.

Avoid Dying Industries
General Motors (value: $3.5 billion) and Ford Motor Company (value: $4.9 billion) today, combined, are worth less than one-tenth of Toyota Motors (value: $112 billion). In 2004, when Toyota won Motor Trend’s Car of the Year with its Prius and Ford and GM were still invested in SUVs and Hummers, the companies were about equal in value. While GM and Ford have lost 87% and 83% of their stock market value since 2004, respectively, over the same period of time, Google launched the most successful IPO of all time and is currently one of the biggest corporations on Wall Street. There are Blue Chips that are fading and others that are becoming the new staples of the U.S. economy.

The Dow Jones Industrial Average Components (30 companies) in 2007 included General Motors, Philip Morris Tobacco Company, Home Depot, Morgan Stanley and other corporations that were poised to implode under massive debt obligations and declining sales, customers and/or profits. In 2006, AIG was a top component of the Dow. Fannie Mae was one of the most popular mutual fund holdings in early 2007. These were the same companies that investors were blindly taking ownership in and relying upon for their futures. (Meanwhile, NataliePace.com readers were warned to trim Fannie, Philip Morris, GM, etc. out of the mutual funds beginning in 2003 and 2004).

So, how do you have the stability of blue chips (large cap companies) without the exposure to the faded blue chips?

2. Invest in wisdom, not the old way of doing things
Nilo Bolden is shopping for a new 401(k) provider with products that allow all of the employees at her company to diversify and have proper asset allocation. The investors who attend my Get Rich and Enrich Retreat have learned how to create their own basket of blue chips when they couldn’t find an existing product with the companies they believed would make a strong foundation for their portfolio. Where there is demand, there will be products! Demand better products. Communicate with the ETF providers and let them know what you want.

Check the ETF providers’ websites to find the diversification you need to have a healthy nest egg, and when you don’t find the products you want to see there, email them! Barclay’s Global Investors (Barclay’s Bank) owns iShares.com. PowerShares, WisdomTree and Wilderhill are all ETF providers. Also, check AMEX for more listings.

3. Diversify and rebalance with a wealth blueprint that is appropriate to your age, instead of blind faith, buy and hold whatever my broker says strategies
So, why not just stay all in on T-bills? The Beauty of Rebalancing.
So, why not just stay all in on T-Bills, if that worked so well for Bill and Nilo in 2008? As the charts on real estate, NASDAQ and clean energy above illustrate, there were great gains to be enjoyed by investing in emerging technologies and companies. If an investor were rebalancing twice a year, then s/he could capture the gains of the small caps (NASDAQ stocks in 2000), capture the gains of real estate in 2006 (REITs, which is an industry I’ve not included in the diversification strategy this year), capture the gains of clean energy in 2007 all while rebalancing back to the desired exposure outlined in the pie chart and keeping enough safe, appropriate to your age. In this way, the nest egg grows without additional risk – always keeping a percent equal to a person’s age in safer, yielding products, like Treasury bills. (Money markets, bonds -- not bond funds -- and CDs are safer investments as well, although these options are not desirable this year.)

Brokerages, 401(k) providers and CFPs
You’ll need to find 401(k) providers and brokerages that have switched to the ETF product offerings. Period. The old way was mutual funds with a basket of everything in the kitchen sink. That plan doesn’t work today and it won’t work tomorrow either because there is no way of identifying which industry/sector or style has experienced gains or losses.

The easiest way to tell if your broker is a salesperson or a Modern Portfolio Theory person is to ask the question, "Was I properly diversified to begin with?" Did you lose more than 25%? If you did lose more than 25% and determine that you weren’t properly diversified, it is time to find a better financial partner and 401(k) provider.

When interviewing for new partners, the second question should be, "How are you paid?" New brokerages that encourage their associates to take a balanced view for their clients pay them on assets under management, not commission on how many mutual funds they sell you. I have an article on my home page that gives you ten questions to ask when searching for your perfect financial life partner, called "How to Pick a Broker." Interview your CFP as if your life depends upon it because your lifestyle does.

Annuities
Please read what FINRA.org has to say about annuities. They have four articles on the FINRA.org website. In general, annuities are pushed hard by salespeople and are not necessarily the best strategy. Your 401 (k), IRA, health savings plan, college fund, etc., should protect you better than annuities from taxes, from lawsuits and debt collectors and position you for a better upside. So, the idea that annuities are safer is not necessarily the case, especially when the upsides of gains and safety of the well-planned nest egg, and the tax advantages and protections offered for the IRAs, health savings plans and 401 (k)s are considered.

Additionally, the “guaranteed” returns of your annuity are only as good as the corporation underlying the promise. With all of the broken pension promises and bankrupt legacy corporations on Wall Street, investors would be wise to place their faith in a healthier system. (Annuities are part of the old way.)

Rebalancing
After you have interviewed and found the perfect Certified Financial life partner, plan on meeting with her at least twice a year to rebalance. In today’s recessionary environment, meet at the end of October to make sure that you have your investments balanced according to the pie chart. That way you have the potential for earning some gains, while also supporting the companies, products, goods and services you wish to be an owner and a consumer in and of. (Those companies need to be healthy enough to make the stuff you need to live, and your ownership in them helps that.)

Meet again at the end of January to rebalance the portfolio, overweighting any gains you may have made during the Santa Rally (if there is one) into the safer portion of your pie. 2009 is predicted to be another hard year in real estate and the stock market. So, overweight back into safety, keeping a percent equal to your age, plus 10-20%, safe in Treasury bills. Money markets, CDs and bonds will be good safe investments again in the future, but for now, just stick with Treasury Bills.

The balance between ownership in the companies of the future and safety during a recession is critically important, as too many wounded investors are now discovering. Rebalancing twice a year, in October and late January, allows you to do that.

4. Know what you own instead of holding a big basket of everything, including companies you despise
Investing in the future is as simple as investing in the products, goods and services that you need to live and to enjoy your life. How many of you still use turn tables for your music or want to drive a gas-guzzler around? Quite simply, there are better products available and great companies making them.

The person who smashed your nest egg to begin with by not employing Modern Portfolio Theory, by not having investments in strategic, emerging industries, by overinvesting in dying industries and by ignoring sound recessionary strategies is not the person who can resurrect and rebuild your Buy My Own Island fund.

So, if you want to have a very healthy nest egg like Bill and Nilo Bolden, you have to start with opening your eyes very wide, trusting in the sound theories outlined in this article and leaning into the wave of the future, instead of allowing yourself to be swept downstream. The challenges of Wall Street and Main Street are not over yet. Act now to be in the best position possible and to be a beneficial part of the re-emergence of the U.S. economy.

And do your friends a favor as well. If this article makes sense to you, please forward it to at least a dozen friends whom you would like to see prosper as well. Many of these strategies are outlined in my new book, Put Your Money Where Your Heart Is. This book is available now for pre-order on your favorite bookseller, like Amazon.com or Barnes and Noble. Put "Natalie Pace" in the search box or click on the blue-highlighted links.

If you are a NataliePace.com subscriber who read my "Recession Proof Your Portfolio" article and employed those strategies and today are enjoying the beautiful protection these strategies provide, please email me right away. We’d love your testimonial and to hear your story! Email Heather@NataliePace.com or call 866.476.7442.

Gold is a Four-Letter Word.

by Natalie Pace.

...And So is Love. Which is Why I’m Swooning While I Write This.

Includes a Gold Mining Company Stock Report Card.

Well, when the landslide collapses, it wipes out everything, including some of the most fertile soil in hard times – gold. Believe it or not, gold mining companies, which are traditionally a safe haven for investors who have very little confidence in their own currency and banking system, was one of the hardest hit industries during the cataclysmic September/October 2008 downslide on Wall Street.

5- year Performance of the PHLX GOLD AND SILVER SECTOR INDEX

As you can see in the above gold and silver sector index chart, metal commodities have dropped off the end of the world, down from their Olympian heights of April of 2008.

Rio Tinto, a former darling of Wall Street and this stock ezine, has given up all but a few dollars of its colossal gains since 2004. When I first listed the company in May of 2004, it was trading at $89.60. We took it off the Hot News list on November 15, 2006, with gains of 144% (share price: $218.62). On October 27, 2008, Rio Tinto closed at $138.69/share. And if the markets tank as badly on Thursday (10.30.08) as analysts predict after the GDP growth report is released by the Bureau of Economic Analysis, that could be a fantastic buying opportunity to pick up this stock at a five-year low.

5- year Performance of Rio Tinto (RTP)

Google’s still trading at a forward Price to Earnings Ratio of 20. Apple is still at 17 and even Coca-Cola is at 13 P/E. But gold stocks have sunk to the lowest price to earnings ratios on the trading block – at 3.90 for Rio Tinto.

What gives? How do these gold mining companies trade for astonishingly low P/Es when gold is so high (at $743 on 10.28.08, compared to the $350 range in 2003)? According to Motley Fool writer Anders Bylund, "The culprit was a sudden slide in copper prices, touching $4 per pound in late June and ending up below $3 at the end of the quarter. Today, the going rate is around $1.80 per pound. Ouch!"

Now, I have a preference for Rio Tinto, since it was such a rock star for me in 2004 (and thereafter). However, based upon a review of the fundamentals outlined in my Stock Report Card, Rio Tinto is still the best company of the bunch.

The Gold Heart Pin is a product of the non-profit organization, VarietyChildrensCharity.org Variety is dedicated to improving the lives of children around the world

As you can see from the Stock Report Card, Rio Tinto has the most explosive growth, the lowest price to earnings ratio, the highest profit margins and the most brilliant executive team at the helm (achieving all of those milestones). Net Earnings are up to $7 billion in the first half of 2008, +113% over the same time last year. Rio Tinto’s business is finding, mining, and processing mineral resources. Major products are aluminum, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore (not just copper). Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.

Judging from the unsolicited (and rejected) bid of 6.8 BHP Billiton shares for every Rio Tinto ADS that BHP Billiton offered to buy Rio Tinto (amounting to about $230/ADR share) on July 30, 2008, the current price has a lot of uptick potential – just based upon the acquisition activity alone.

In his letter to shareholders of September 8, 2008, Rio Tinto Chairman Paul Skinner wrote, "We rejected BHP Billiton’s pre-conditional offer in February as the offer significantly undervalues your company and its prospects. The outlook for the company has improved further since that time." At the time that the offer was rejected, Rio Tinto’s share price was $325.42.

It’s quite a shock to find a great company that is so undervalued with a bid on the table that represents a 65% premium on the current price. When the landslide takes a beautiful baby downstream with the bathwater, you want to fish her out quickly, before someone else adopts her.

Rio Tinto was added back to the Hot News on Cool Stocks list today. U.S. Gold continues to be a long shot stock with extremely high risk that will either be the investment of a lifetime or a giant goose egg. For more information on U.S. Gold, read the Hot News on Cool Stocks list comments section.

Full Disclosure: Natalie Pace does not own shares in Rio Tinto (yet). She does own shares of U.S. Gold.

Please note: NataliePace.com does not act or operate like a broker. We report on financial news, and are one of the most trusted independently owned and operated financial news corporations in the U.S. This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. The publicly traded companies mentioned in this article are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.

Investors should NOT be using the Hot News on Cool Stocks list or the Cooling Off list to trade their nest eggs. Your retirement plan should reflect a long, safe strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.

IMPORTANT DISCLAIMER: Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

What Lies Ahead?

Financial Services Professionals Offer Their Wisdom on Sound Strategies for Insane Times – in Real Estate, Annuities, Hedge Funds, Annuities, Bank Failings and Stocks.

Will Main Street USA become a Ghost Town? The Historic Town of Bisbee, AZ Photo copyright by Daniel Ter-Nedden. From www.ghosttowngallery.com

On Banks Failing
Failure of badly run big financial and other companies is healthy and indeed necessary for the survival of a robust free enterprise competitive system.

- Gary S. Becker, Nobel Laureate winning economist
University Professor Department of Economics and Sociology
Professor Graduate School of Business, The University of Chicago

On Annuities
A variable annuity's rate of return is not stable, but varies with the performance of the stock, bond, and money market investment options that you choose. There is no guarantee that you will earn any return on your investment and there is a risk that you will lose money.

Your guaranteed return is only as good as the insurance company that gives it. While it is not a common occurrence that a life insurance company is unable to meet its obligations, it happens.

- FINRA.org Investor Alert

On Pot-Holes in the Road Ahead
My prediction: the next few months will see a string of huge hedge-fund failures, which will lead hedge-fund investors to pull their cash out of hedge funds en masse, triggering further hedge-fund blow ups.

I would not want to be holding the same assets that these hedge funds are holding, because they may have to liquidate at fire-sale prices.

- Steven D. Levitt.
Steven D. Levitt is the co-author of Freakonomics (with Stephen J. Dubner) and a professor of economics at the University of Chicago.

On Freedom and American Ideology
The most important "mark to market" will not occur with the portfolios in this crisis, but the people.

When people take stock in themselves, because the stock in others is ruined; when they discount themselves to who they are and not to what they can buy; when they feel compassionate in the common distress they share; then they will stand up, dust themselves off, and go to work making a better life for themselves and their neighbors. It is into that person and that society that, not the last, but rather the next Rockefeller will invest, and it is he who is any one of us today.

- Jim Moglia
Executive Managing Director
Head of Financial Sponsors & Debt Capital Markets
Co-Head of Leveraged Finance
BMO Capital Markets

Real Estate Strategies
In the early 90's the real estate market was devastated with projects that had cost $400/square foot selling for $60-$100/square foot. Even in today's market these were the buys of a lifetime.
 
Some rules that work in real estate include:
        Look for the best value, not the lowest cost
        Buy enduring quality
        Buy cash flow
 
In today's residential market I would add (for those who plan to own for the long run), if you can get financing it may be a great bargain in a liquidity challenged future.
 
When it comes to the stock market the obvious is to buy companies that do not need to borrow or raise capital.
  
"The Lone Ranger would tell you, "Don't expect the stranger who lead you into the ambush to lead you out of danger."

- Steve Dietrich, President
Financial Research Group
http://financialresearchgroup.com/

What Would Rockefeller Do?

by Natalie Pace.

There are times in history when the ground is cleared for a new future. It happened in the 1500s when Copernicus published his theory on heliocentric cosmology. It happened at the turn of the last century when we switched from horse and carriage to car and train. Just two years before the Great Depression, on May 20–21, 1927, Charles Lindbergh flew his plane across the Atlantic, ushering in international travel and what would become our global economy.

Likewise, we stand today at a moment when history is shifting in an entirely new direction. You know this instinctively. Dying industries are being replaced by emerging technology and forward-thinking corporations today, just as the horse and carriage were replaced by trains, planes and automobiles during the first part of the 1900s. The chaos of those turbulent times created an opportunity for forward-thinking individuals, just as there are opportunities for visionaries today.

So, what would an opportunistic individual, like the billionaire Rockefeller, do with today’s financial mess? At the time of his death in 1937 – eight years deep into the Great Depression -- Rockefeller was still one of the most powerful, rich and influential patricians in the United States. Many believe that his wealth, estimated at $1.4 billion in 1937, was the largest personal wealth ever assembled, when compared to percentage of GDP – above Bill Gates or Warren Buffett.

So, even if all you desire is to have your 2007 lifestyle when you retire, it pays to think like Rockefeller did and employ the sound rebuilding strategies to make sure that your portfolio is rebuilt upon a great foundation going forward and is never exposed to the financial fallout that so many of the world’s citizens experienced in 2008, which are not predicted to abate anytime soon.

What would Rockefeller do?

1. Invest in emerging energy products.
2. Invest in and partner with the transportation business of tomorrow.
3. Preserve his wealth.
4. Protect his personal assets and legacy.
5. Hire competent staff.
6. Invest in education

Incidentally, we see a lot of these qualities in the "triumvirate" at Google – Dr. Eric Schmidt, Sergey Brin and Larry Page, who are investing in solar energy, in electric cars, hiring the best and the brightest and most recently formed their own venture capital unit focused on finding, funding (and buying) the latest and greatest Internet technology creations.

So, how can you apply this to your nest egg?

1. Invest in emerging energy products.
   When Standard Oil began, in 1870, it was a risky venture. Biographer Allan Nevins writes, "The rise of the Standard Oil men to great wealth was not from poverty. It was not meteor-like, but accomplished over a quarter of a century by courageous venturing in a field so risky that most large capitalists avoided it, by arduous labors, and by more sagacious and farsighted planning than had been applied to any other American industry."

There are many reasons to support clean energy, like solar, wind and geothermal. 1) We stop giving the world’s cash to some of the most oppressive regimes with the worst human rights records (where few of us would want to live). 2) Fossil-based fuels are predicted to run out within 30-40 years at the current rate of consumption – faster if we drink more. Quite simply, we have to find alternative energy. 3) Clean and green: wind, solar and geothermal energy are cleaner and more sustainable for our world’s current climate crisis.

According to the Energy Watch Group, in a 100+ white paper released in October 2007, "By 2020, and even more by 2030, global oil supply will be dramatically lower. This will create a supply gap which can hardly be closed by growing contributions from other fossil, nuclear or alternative energy sources."

It’s not just the right thing to do. Those who finance the solving of this problem will profit just as surely as Rockefeller profited from Standard Oil when people were tired of riding horses from New York to California. Invest in what people want to or need to do tomorrow, and have the vision to make it easy and affordable, and you, too, can and will become rich.

2. Invest in and partner with the transportation business of tomorrow.
   Rockefeller’s competitive edge, in addition to monopoly and buying up the competition, was in the railroad system. Rockefeller could afford to ship oil where needed for such a low price that most of the competition couldn’t compete. Their costs were significantly higher than his, partially due to the volume he was shipping, as well as the Joint Venture deals Rockefeller struck with the railroad operators.

How does this affect today’s marketplace? You don’t want to haul your things around on horseback, or schlep your widgets in Hummers that get two miles to the gallon. There is always a new, better technological innovation just around the corner.

General Motors (market value $3.7 billion) and Ford Motor Company (market value $5.2 billion) together -- yes combined -- make up less than one-tenth of the value of Toyota Motors (market value: $115 billion). The Toyota Prius won Motor Trend’s Car of the Year in 2004, when I first warned my readers to avoid GM and Ford. Ford and GM were too late in moving to hybrids and continued to overinvest in Hummers and SUVs even when Toyota was winning awards with their fuel-efficient vehicles.

Invest in fuel-efficient transportation methods, whether that investment is in the car you drive, the car manufacturer that you own stock in, the all-electric city fleet of utility trucks and buses or shipping methods for your business. Understand that the price of fuel does make local manufacturing more attractive than shipping those jobs overseas. Stay current with your transportation costs and habits and you’ll have a competitive edge in business and in life. Rogue Status started a trend of bike-riding in Venice, California and now college kids across the city are biking to work and school to save money on transportation costs. Smart!

3. Preserve your wealth.
   All of the foundations that Rockefeller set up were great ways to preserve his wealth. Through his foundations, Rockefeller was assured of many tax advantages, political advantages (prestige/power), professional advantages (ability to cultivate and hire the best/brightest minds) and social advantages (everyone loves him, plus his galas were world-class, with royalty in attendance).
   
   You preserve your wealth by:
   1. Always keeping a percent equal to your age safe, i.e., not invested in any kind of equity AT ALL – not individual stocks, ETFs or mutual funds. This "safer" money can be allocated to assets such as bonds, Treasury bills, certificates of deposits (FDIC insured), money markets (FDIC insured), etc. (Consider your home to be an illiquid asset – great for living in and increasing your personal net worth, but not very easy to liquidate or rely on for income in your later years, as bonds, T-Bills, CDs and money markets are.) And yes, money markets and bonds are the lesser preferred today, returning a much lower yield than T-Bills and CDs.
   
   2. Diversify the remaining nest egg into at least eight to ten different ETFs, based upon size, style and industry. Again, most mutual funds are too broad-based, which is why targeted ETFs allow for better diversification. Read the article, “Resurrect Your Nest Egg,” in this November 2008 ezine for more details.
   
   3. Tax-Protection. Ask your broker for every tax-protected account that you qualify for. When you do your stock trading in a tax-qualified 401 (k), IRA, health savings account and/or college fund, you are making an additional 15-38% because you are not taxed on capital gains or dividends!
   
   Read the article "Bill and Nilo’s Very Healthy Nest Egg" for more information, including a pie chart on what proper asset allocation and industry diversification looks like. This article is located in the NataliePace.com archived ezine, October 2008, vol. 5, issue 10. Also, be sure to read "Resurrecting Your Nest Egg," in the November 2008 ezine!
   
   4. Protect your personal assets and legacy.
   Ever wonder how O.J. Simpson could keep playing golf and living it up when he had a $30+ million unpaid judgment against him from the Ron Goldman Family? (Before a Las Vegas jury put him behind bars in September 2008.) Certain personal assets, like pension plans and retirement accounts, cannot be levied by debt collectors. Make sure that you are tax-protected and lawsuit-protected now. IRAs, 401(k)s, insurance plans, etc. can be better personal protection devices than limited liability corporations. Ask your CFP how. Make sure that you understand all of the tax advantages of IRAs over annuities before you write the check.
   
   5. Hire competent staff.
   Rockefeller’s university, the University of Chicago, has employed some of the greatest economic minds of all time. There are 73 Nobel laureates who have been at some time faculty members, students or researchers at the University, including economists James Heckman, Milton Friedman, Theodore Schultz, George Stigler, Merton Miller, Gary Becker, Robert Fogel and Robert Lucas. Steven D. Levitt, author of the best-selling book Freakonomics, is on staff there. Incidentally, you can read Dr. Gary Becker and Steven Levitt’s blogs for the latest, greatest economic outlook information – a far better investment of your time than watching television or reading the daily news.

Today, the best ETFs (again not mutual funds) are available through the less-traditional avenues – at online discount brokers – not the full-service, legacy brokerages of the past (many of which are going under or being bought up on the cheap). If your broker did not have you diversified properly before the market lost half of its value in October of 2008 (from a high of over 14,000 in October of 2007 -- just a year earlier), then do not expect the same incompetence that got you into this mess to get you out.

With regard to forensic, investigative financial reporting, it is a rarity these days. That’s because ad revenues for all media must now be shared across the board of Internet, television and print, with each venue receiving less than they have in the past (with the exception of the Internet). Thus, writers have been cut from the staff and those remaining have time constraints and heavy workloads. There is not enough time or money to do the same quality of journalism that was done in the past. Because I’m independently owned and operated and not fearful of operating on a lean budget, I remain committed to fewer articles of much higher quality.

That is how I was able to warn of Fannie Mae in 2003, of GM and Ford in 2004, that housing was poised to pop in 2005, to avoid Lehman Brothers in 2006 and to "recession-proof" your portfolio in February of 2008. Those who had a percent equal to their age plus 10-20% SAFE (like the recession-proof plan called for) lost much less than those who were over-weighted in stocks. Bill and Nilo Bolden lost nothing.

6. Invest in Education
Rockefeller founded the University of Chicago and Rockefeller University. Rockefeller says calls the University of Chicago "the best investment I ever made." When we are at a crossroads, such as we are right now, what will be great tomorrow comes from the brightest and best minds of today. Teach yourself new skills. Send your children to college. Invest in corporations that have divisions for attracting new talent (like Google’s new investment fund) and pro-education policies (like Apple Computer’s field trips). Volunteer to help out at your local neighborhood school. As Dr. Charles Zhang, the CEO and Chairman of Sohu.com wisely notes, "When you have a product that is 10% better than the competition, you will become 10 times more popular."

The United States has been the leader in innovative technologies, products, goods, services and patents. As a nation of free individuals, we are one of the most desirable places to live on Earth. If we are to continue to be, we have to attract the best and the brightest from around the world (like Sergey Brin, one of Google’s founders), nurture the creative problem-solving strategies and entrepreneurial skills of our own youth (like we did with Steve Jobs, Bill Gates, Warren Buffett, Muriel Siebert, Christy Hefner, Kay Koplovitz and more), keep them healthy enough to invent and prosper (need major health care and insurance solutions!) and provide relatively easy access to funding and business licenses through less bureaucracy and an easing of the current credit graveyard.

Thus the platforms of both parties are truly important. Education, healthcare, good business policies, social, business and individual freedom and low taxes are all key to a robust, free economy. It isn’t either or. And we need to be brave enough to let bad businesses fail, even when they are some of the largest corporations on Wall Street. As Dr. Gary Becker wisely notes, "Failure of badly run big financial and other companies is healthy and indeed necessary for the survival of a robust free enterprise competitive system."

Freedom is the foundation of America and our greatest strength. We fought to give all people the right to vote. We are finding ways to give every citizen the right to get any job. And individuals in the U.S. are now able to invest freely, whereas in the past, corporations did it for them. Corporations did a lousy job of managing the individual retirement plan. It was an idea as "caveman" as allowing a select few to govern, like monarchies, or giving up the freedom to choose your life path, as Communist countries employed.

Now, the next wave is the freedom to make better choices with your 401(k). Please read "Resurrecting Your Nest Egg" in this ezine for tips on how to become the CEO of your own success. If you are over 25 and you lost more than 25% of your nest egg, your nest egg is not set up properly. The tips outlined in that article will resurrect your future and put it on track to never experience those kinds of losses ever again.

Please note: NataliePace.com does not act or operate like a broker. We report on financial news, and are one of the most trusted independently owned and operated financial news corporations in the U.S. This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. The publicly traded companies mentioned in this article are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.

Investors should NOT be using the Hot News on Cool Stocks list or the Cooling Off list to trade their nest eggs. Your retirement plan should reflect a long, safe strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.

IMPORTANT DISCLAIMER: Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

Why Are Hedge Funds Not Blowing Up All Over the Place?

by Steven D. Levitt.

Steven D. Levitt is the co-author of Freakonomics (with Stephen J. Dubner) and a professor of economics at the University of Chicago.

This is a reprint of Dr. Steven Levitt’s October 23, 2008 Freakonomics blog on the New York Times website.

Steven D. Levitt, author of Freakonomics.

There are many things I do not understand about the financial crisis, but the one thing that currently puzzles me the most is how there have not been dozens of huge hedge-fund failures over the last few months.

I am sure there are plenty of hedge funds that are long mortgage-backed securities. Moreover, hedge funds are often highly leveraged.

Even if a hedge fund was just fully invested in equities — not mortgage-backed securities, but leveraged five times — it might have lost everything.

On top of this, the money in many hedge funds is "hot money." In other words, if things start to go south at a particular hedge fund, many investors pull their money out as quickly as they can. This compounds the hedge fund’s problems, because it means it needs to liquidate positions to pay out the investors who withdraw their money.

I suspect there are two reasons why we have not yet seen massive hedge-fund failures. The first is that most hedge funds have "lock up" periods, so that investors can only get their money out with a lag of a few months or maybe up to a year.

My guess is that many hedge funds are facing huge redemptions; they just haven’t reached the end of lock-up periods yet so they haven’t had to pay out. A lot of lock-ups are probably timed quarterly, which means the next chance out is at the end of the calendar year.

The second reason that hedge funds might not yet be blowing up is that they are nearly unregulated, so they don’t face "mark to market" rules or required capital ratios. So these hedge funds could be in terrible shape, but might be able to hide that fact — at least until the redemptions hit.

My prediction: the next few months will see a string of huge hedge-fund failures, which will lead hedge-fund investors to pull their cash out of hedge funds en masse, triggering further hedge-fund blow ups.

I would not want to be holding the same assets that these hedge funds are holding, because they may have to liquidate at fire-sale prices.

[Addendum from Dubner: Levitt is such a smart guy that he doesn’t even have to read the newspaper. If he did, he’d have seen today’s front-page article in The Times about how hedge funds are blowing up all over the place, or at least will be soon.]

Meltdown.

by Paul Woods, President, CEO and CIO, Odyssey Advisors.

The third quarter of 2008 witnessed an unprecedented financial meltdown. Investment bankers became extinct, the largest insurance company and the two biggest companies in the mortgage industry were nationalized, and other financial giants were either forced into shotgun weddings or filed for bankruptcy. At the end of the quarter, a bailout of real estate lenders with a record price tag that could reach $700 billion was still being negotiated.

This disaster was made possible by the savings and loan bailout two decades ago. At that time, financial instruments were created that allowed real estate lenders to market their loans. These mutated into something that allows lenders to be paid for making loans while transferring the risk of that lending decision to someone else. The ability to transfer risk meant that the real estate lending process eventually focused on maximizing fees by making increasingly risky loans. In what is supposed to be the most sophisticated financial system on the planet, common sense was no match for greed.

When politicians attempted to transfer this risk to taxpayers, all hell broke loose. The public sent an emphatic message that the last thing they wanted was to have good money thrown after bad, particularly when it’s theirs. The defeat of this attempt to socialize risk produced the largest one-day drop in the stock market in history a day before the quarter ended.

The massive destruction of wealth has left most people furious and Wall Street is now considered a four-letter word. Between politicians that considered houses another entitlement for the poor, lenders who made loans they couldn’t get rid of fast enough, and investors who created a market for these mortgages when they should have known better, there’s plenty of blame to go around. What’s obvious is a problem that took decades to create isn’t going to be fixed in a few months. The only suspense is whether politicians will finally succeed in handing the bill for this cleanup to taxpayers or if what finally becomes law will be something that attempts to resolve the preventable problems that created this meltdown.

In the third quarter of 2008, the stock market again defied conventional wisdom. Market declines usually produce a flight to bigger companies, but in this environment, smaller was better. Midcap companies that had led the market for the last few years were hit the hardest, and value significantly outperformed growth. For reference, here’s the stock market segment scorecard for the second quarter of 2008:

Source: Thomson One Financial, Thomson Baseline

Within these market segments, the industries least likely to be hurt by an economic downturn were the best performers while declining oil prices made anything related to energy the worst performers. For reference, here’s the stock market index and industry group scorecard for the second quarter of 2008:

Source: Thomson One Financial, Thomson Baseline

In the bond market, a drop in stocks coupled with the meltdown in mortgages produced a flight to quality. The bond market ignored our last letter and U.S. Treasuries extended four months of gains as yields declined. Also boosting Treasuries was speculation the U.S. will enter a recession regardless of whether lawmakers approve a plan to rescue the financial system. Agency bonds had a good quarter and spreads versus Treasuries tightened after the takeover of Freddie Mac and Fannie Mae. Corporate bonds, particularly in the financial sector, were underachievers in the third quarter as spreads widened versus Treasuries.

Source: Bloomberg LP

Municipal bonds have become bargains because Bear Sterns and Lehman Brothers exited the muni market and are in the process of selling, which has created an imbalance between supply and demand. The yields on A quality (California) municipal bonds are now higher than Treasuries across the board. With taxes likely to go up after the election, tax-free bonds are likely to become more valuable and we view this as a buying opportunity. The rally in Treasury bonds has left them with yields well below the inflation rate, but futures contracts show that traders believe the chances of another interest rate cut by the Federal Reserve are high. Overall, we’re keeping bond maturities in the intermediate range and continue to emphasize quality and liquidity.

The trillions of dollars of unregulated capital in hedge funds seem to increase the volatility of stocks on a monthly basis and huge daily moves are becoming the norm. This increase in volatility coupled with deteriorating fundamentals, has pushed valuations lower while earnings expectations are also declining. Although we’ve been cautious all year, 2008 has been more difficult than we expected for equity investors. However, although there is no shortage of economic problems right now, the recent sell off appears to have discounted the most negative scenario. While major uncertainties remain, there are a lot of bargains in the stock market at present, and we wouldn’t be surprised to see stock prices stabilize in the next few months. We’re still finding companies able to expand their business in the current environment, and that remains our primary focus.

Paul A. Woods
President & CEO, Odyssey Advisors

ABOUT PAUL WOODS

Paul Woods, President & CEO, Odyssey Advisors LLC.

Paul is the President, Chief Executive Officer, and Chief Investment Officer of Odyssey Advisors. He has over 35 years of experience in the investment management and research analysis of common stocks. He manages the Odyssey Clean Energy Portfolio, which produced a return of 141.9% before fees in 2007. Paul has done a great deal of independent research on clean energy and has written multiple articles on various segments of this industry. He can be contacted at pwoods@odysseyadvisors.com

NataliePace.com Note: Please note that the returns and statistics regarding the Odyssey Clean Energy portfolio were provided by Odyssey Advisors. Since Odyssey is not followed by an independent tracking firm, such as Hulbert's Financial Digest, the results, which the company provided, have not been verified with an independent source.

Information has been obtained from sources believed to be reliable however Odyssey Advisors LLC does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this material and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

The Green Goddess Investment Club.

by Shelley Silver Whizin.

Kavi Ladnier, Green Goddess Investment Club member KaviLadnier.com

It was May 15, 2008, not so long ago, when I first attended Natalie Pace's "Get Rich and Enrich" workshop in Santa Monica. Little did I know it would change my life FOREVER.

Stepping into the door I was both excited about learning how to invest in the stock market and totally intimidated because I knew NOTHING about investing. My (soon to be) ex husband and "our" stockbroker took care of everything. (Sound familiar, women?).

As Natalie explained the different terms, concepts and philosophies about investing in the stock market, and why it's so important to gauge your "nest egg" according to your age, I began to "get it". We actually had hands-on experience with what she was talking about by learning online (in the moment), utilizing our own computers. We practiced and practiced at navigating and evaluating different stocks according to the criteria Natalie set forth.

By the third day, Natalie asked if anyone could "review" what we had learned. To my surprise, my hand went up so fast, I didn't even realize it. I was actually able to reiterate what we had learned, and frankly, I couldn't believe it myself. I was shocked and proud. Natalie had certainly done a great job of turning me into a fairly knowledgeable person (who at least became familiar with the terms and formulas for successful investing). One of the areas I'm most proud of was my ability to have an INTELLIGENT conversation with "my" (soon to be) stockbroker. I think he was surprised that I could "hold my own" in that conversation. (I felt like a grown up who was empowered instead of intimated).

Anyway, during that weekend, we went on a tour of a Santa Monica "green house", which we all fell in love with. Two other women (Brianna Brown and Cindy Ciskowski) and myself were chatting about how "one day" we would LOVE to BUY a house like that and turn it into a retreat center or rental property to conscious renters. We all got very excited and exclaimed in that moment, "Why don't we START AN INVESTMENT CLUB like Natalie did?"

Brianna Brown, Green Goddess Investment Club member Brianna-Brown.com

We instantly clicked and the three of us got together to work out the details, coming up with our name, THE GREEN GODDESS INVESTMENT CLUB and gathering all the information we needed to begin. Using Natalie's templates and her fantastic printed materials, we followed her lead! Within one month, we developed our goals, our philosophies, our rules, and sent out invitations to our friends whom we thought would be a great fit. We then set up an account at TD Ameritrade, with everyone contributing $100 per month. We were on our way! Thirteen women ready to go!

Our official meeting was held in July, and we have met every month since that time. We all look forward to years of educating ourselves and making money in conscious endeavors. We are all like-minded, like-hearted and have a great desire to help our planet, contribute to our world and love getting together for delicious food and fabulous educational opportunities.

Our directive was to read Natalie's newsletter every month, do our own stock report cards and follow Natalie's picks, even though we would do our own homework. Each month someone different presents a suggested investment. These are all considered "stocks on steroids" and NOT part of our individual "nest eggs". Well, the formula has paid off and we are officially in the investment club business.

Note from Natalie: Their first investment paid a return of almost 40% -- in this crappy marketplace. Look at how well they learned my strategies!

I am forever grateful for Natalie's style of imparting her brilliance to us all, her dedication to the truth of our economy and to her love of what she does and how she does it. I will NEVER be the same again. I am growing by leaps and bounds every day in every way and becoming more sophisticated in my knowledge base of investing. I just love the process of learning and am so proud of the growing intelligence of our GREEN GODDESS INVESTMENT CLUB.

Thanks for this opportunity to share my story and thanks to Brianna Brown for being our first treasurer. It was she who figured out the logistics for all of us. And thanks to Cindy for volunteering to be our first President. She too is doing a fantastic job! And thanks to all of the women who are committed to this growing entity. You go girls!

Note from Natalie: We offer investment club startup kits FOR FREE to new investment clubs who have at least five members subscribing to my ezine. Email Heather@NataliePace.com with a list of your subscribers to receive information on how to download your own investment club startup kit!

Other Articles of Interest:
"Investment Clubs: Girls' Night Out (or Date Night) with Benefits!" By Natalie Pace.

Please note that there are still a few seats in the November 20-22, 2008 Get Rich and Enrich Retreat in Santa Monica, California. This is the last retreat scheduled because next year, Natalie Pace will be on book tour, promoting her new book. So, if you want to change your life FOREVER like Shelley did, sign up NOW online at the JOIN NOW link and enjoy the early bird rates, which have been extended NOW through November 8, 2008 ONLY! The special price of just $199/night at the Sheraton Delfina is available now through November 2, 2008 only, so act quickly to enjoy this great retreat at the lowest possible price.

Buy the Latte! Retirement is a Lie.

by Chellie Campbell, author of Zero to Zillionaire.

Chellie Campbell, author of Zero to Zillionaire

Here’s how to calculate the amount of money you’ll need at retirement: 1) Whatever you have now; plus 2) Ten million dollars.

That sounds like enough to make you feel safe, right? Financial advisors estimate that the percentage of Americans who can actually save enough money to afford a reasonable lifestyle for 25 years without working is about 3%.

Here’s the problem: over time, the retirement game has warped beyond any reasonable shape. It was invented in the 1930s along with Social Security, which set the retirement age at 65—because most people died at 63. It was only supposed to support the few people who lived beyond the average life expectancy for a few years. Now life expectance has risen to 78, so retirement should start at 80. Most people can save enough to last 5-10 years.

I spoke with a 50-something man the other day. He was burned out at his job and wanted to retire. But he was afraid. "I have enough money to last twenty years," he said. "But if I live longer than that, it’s a problem."

Living too long is a problem? No—the problem is working too hard and burning out. The problem is too much work and not enough vacation. The problem is not having work you love.

When was the last time you heard a movie star say, "I can’t wait until I have my pension funded so I can retire and stop making all these movies?" You never hear that. Because actors love their work. At ninety years old, they’re trying to convince insurance companies how healthy they are so that they can make a movie. They die onstage. They want to die working because they love their job.

The game of richest man in the world has been won already. Bill Gates is still working. The number two richest guy, Warren Buffet, just gave the number one guy all his money. He’s still going to work every day. The number three guy, Sheldon Adelson, is still working, too – he has a five-year plan in place to become the number one guy. He’s 83 years old!

"Why bother?" You might ask.

Just for fun is the answer.

Find work that you love doing and you won’t want to retire from it. Retire to do what? Lie on the beach? For how many days would that be interesting? You only think you want to lie on the beach because you haven’t had a good vacation. So go to Hawaii or Cabo or the Caribbean or someone’s backyard in Malibu now.

And enjoy a latte on the beach while you’re at it.

Chellie Campbell is the author of Zero to Zillionaire and The Wealthy Spirit. She created the Financial Stress Reduction® Workshops, on which her book is based, and is currently teaching other franchisees how to teach these wealth empowering workshops around the world.

If you are stuck in a rut in your business or life and/or having too much "month at the end of your money," Chellie’s workshop might be just what you need to get things on the right track. You can sign up for Chellie's Ezine and workshop at www.chellie.com. If you’re interested in earning hundreds of thousands of dollars teaching Chellie workshops in your city, franchise opportunities are available.

 

Finra.org INVESTOR ALERT: Equity-Indexed Annuities—A Complex Choice.

Why an Alert on Equity-Indexed Annuities?
Sales of equity-indexed annuities (EIAs) have grown considerably in recent years. Although one insurance company at one time included the word "simple" in the name of its product, EIAs are anything but easy to understand. One of the most confusing features of an EIA is the method used to calculate the gain in the index to which the annuity is linked. To make matters worse, there is not one, but several different indexing methods. Because of the variety and complexity of the methods used to credit interest, investors will find it difficult to compare one EIA to another.

Before you buy an EIA, you should understand the various features of this investment and be prepared to ask your insurance agent, broker, financial planner, or other financial professional lots of questions about whether an EIA is right for you.

What is an Annuity?
An annuity is a contract between you and an insurance company in which the company promises to make periodic payments to you, starting immediately or at some future time. If the payments are delayed to the future, you have a deferred annuity. If the payments start immediately, you have an immediate annuity. You buy the annuity either with a single payment or a series of payments called premiums.

Annuities come in two types: fixed and variable. With a fixed annuity, the insurance company guarantees both the rate of return and the payout. As its name implies, a variable annuity's rate of return is not stable, but varies with the performance of the stock, bond, and money market investment options that you choose. There is no guarantee that you will earn any return on your investment and there is a risk that you will lose money. Unlike fixed contracts, variable annuities are securities registered with the Securities and Exchange Commission (SEC). To learn more about variable annuities, read our Investor Alert, Should You Exchange Your Variable Annuity?

What is an Equity-Indexed Annuity?
EIAs are complex financial instruments that have characteristics of both fixed and variable annuities. Their return varies more than a fixed annuity, but not as much as a variable annuity. So EIAs give you more risk (but more potential return) than a fixed annuity but less risk (and less potential return) than a variable annuity.

EIAs offer a minimum guaranteed interest rate combined with an interest rate linked to a market index. Because of the guaranteed interest rate, EIAs have less market risk than variable annuities. EIAs also have the potential to earn returns better than traditional fixed annuities when the stock market is rising.

What is the Guaranteed Minimum Return?
The guaranteed minimum return for an EIA is typically 90% of the premium paid at a 3% annual interest rate. However, if you surrender your EIA early, you may have to pay a significant surrender charge and a 10% tax penalty that will reduce or eliminate any return.

How good is this guarantee?
Your guaranteed return is only as good as the insurance company that gives it. While it is not a common occurrence that a life insurance company is unable to meet its obligations, it happens. There are several private companies that rate an insurance company's financial strength. Information about these firms can be found on the Pennsylvania Insurance Department's Web site.

What is a market index?
A market index tracks the performance of a specific group of stocks representing a particular segment of the market, or in some cases an entire market. For example, the S&P 500 Composite Stock Price Index is an index of 500 stocks intended to be representative of a broad segment of the market. There are indexes for almost every conceivable sector of the stock market. Most EIAs are based on the S&P 500, but other indexes also are used. Some EIAs even allow investors to select one or more indexes.

How is an EIA's index-linked interest rate computed?
The index-linked gain depends on the particular combination of indexing features that an EIA uses. The most common indexing features are listed below. To fully understand an EIA, make sure you not only understand each feature, but also how the features work together since these features can dramatically impact the return on your investment.

* Participation Rates. A participation rate determines how much of the gain in the index will be credited to the annuity. For example, the insurance company may set the participation rate at 80%, which means the annuity would only be credited with 80% of the gain experienced by the index.

* Spread/Margin/Asset Fee. Some EIAs use a spread, margin or asset fee in addition to, or instead of, a participation rate. This percentage will be subtracted from any gain in the index linked to the annuity. For example, if the index gained 10% and the spread/margin/asset fee is 3.5%, then the gain in the annuity would be only 6.5%.

* Interest Rate Caps. Some EIAs may put a cap or upper limit on your return. This cap rate is generally stated as a percentage. This is the maximum rate of interest the annuity will earn. For example, if the index linked to the annuity gained 10% and the cap rate was 8%, then the gain in the annuity would be 8%.

Caution! Some EIAs allow the insurance company to change participation rates, cap rates, or spread/asset/margin fees either annually or at the start of the next contract term. If an insurance company subsequently lowers the participation rate or cap rate or increases the spread/asset/margin fees, this could adversely affect your return. Read your contract carefully to see if it allows the insurance company to change these features.

Indexing Methods. As described in the table below, there are several methods for determining the change in the relevant index over the period of the annuity. These varying methods impact the calculation of the amount of interest to be credited to the contract based on a change in the index.

* Index Averaging. Some EIAs average an index's value either daily or monthly rather than use the actual value of the index on a specified date. Averaging may reduce the amount of index-linked interest you earn.

* Interest Calculation. The way that an insurance company calculates interest earned during the term of an EIA can make a big difference in the amount of money you will earn. Some EIAs pay simple interest during the term of the annuity. Because there is no compounding of interest, your return will be lower.

* Exclusion of Dividends. Most EIAs only count equity index gains from market price changes, excluding any gains from dividends. Since you're not earning dividends, you won't earn as much as if you invested directly in the market.

Can I get my money when I need it?
EIAs are long-term investments. Getting out early may mean taking a loss. Many EIAs have surrender charges. The surrender charge can be a percentage of the amount withdrawn or a reduction in the interest rate credited to the EIA.

Also, any withdrawals from tax-deferred annuities before you reach the age of 591⁄2 are generally subject to a 10% tax penalty in addition to any gain being taxed as ordinary income.

Do EIAs and other tax-deferred annuities provide the same advantages as 401(k)s and other before tax retirement plans?
No, 401(k) plans and other before-tax retirement savings plans not only allow you to defer taxes on income and investment gains, but your contributions reduce your current taxable income. That's why most investors should consider an EIA and other annuity products only after they make the maximum contribution to their 401(k) and other before-tax retirement plans. To learn more about 401(k)s, please read Smart 401(k) Investing.

Is it possible to lose money in an EIA?
Yes. Many insurance companies only guarantee that you'll receive 90% of the premiums you paid, plus at least 3% interest. Therefore, if you don't receive any index-linked interest, you could lose money on your investment. One way that you could not receive any index-linked interest is if the index linked to your annuity declines. The other way you may not receive any index-linked interest is if you surrender your EIA before maturity. Some insurance companies will not credit you with index-linked interest when you surrender your annuity early.

If You Have Questions
If you have questions about EIAs, you can contact your state insurance commissioner. You can check out whether the person selling an EIA is registered with FINRA. Check FINRA BrokerCheck or call our hotline at (800) 289-9999.

Additional Resources
* FINRA Investor Alert: Variable Annuities: Beyond the Hard Sell.
* FINRA Investor Alert: Should You Exchange Your Variable Annuity?
* FINRA Investor Protection: Protect Yourself from Early Retirement Scams.
* National Association of Insurance Commissioners' Buyer's Guide to Equity-Indexed Annuities.
* Securities and Exchange Commission's Variable Annuities: What You Should Know.

To receive the latest Investor Alerts and other important investor information sign up for Investor News at Finra.Org.

Could the Dow Drop to 5,000?

Op-Ed by Geraldine Weiss, founder and Publisher Emeritus, Investment Quality Trends.

Investors today are looking for answers to the demise of the bull market.  It is true that some of those answers can be found in the ineptitude and duplicity of Congress, mortgage companies, banks and some branches of the investment community.  I believe, however, that the potential election of Barack Obama is weighing heavily on the stock market and has extended the bear market further than it otherwise would have gone.  Either consciously or subconsciously investors are thinking, "If Obama keeps his promise to raise taxes on capital gains, dividend income and inheritance, why risk my capital in the stock market?  Is the risk worth the reward?"  When the answer to that question is "No," stock prices fall.  And that is what has happened in the stock market and what is perpetuating the decline.
 
How far will it go? A look at history may provide some answers. Historically, from the early days of the stock market, the Dow Jones Industrial Average fluctuated between dividend yield extremes of 6.0% at Undervalue and 3.0% at Overvalue. That profile of value guided the stock market through every bull and bear market, the worst of which in modern times began in 1966 at Overvalue and was not completed until 1974.  Then, from 1974 to 1982 the market fluctuated between dividend yield extremes of 5.0% and 6.0% until a new bull market was launched. The bull market began at Undervalue in 1982 and rose to Overvalue in 1992. Then an incredible thing happened.  For the first time in history, the D.J.I.A. continued to rise above its historically etched low yield and formed a new profile of investment value.  What formerly was the yield at Overvalue (3.0%) became the new floor of Undervalue.  And a rise to 1.5%, identified a new selling area.
 
According to the current composite dividend for the Dow Jones Industrial Average ($323.47) the price at Overvalue is a far distant 21565 and the price at Undervalue where the dividend yield is 3.0% is 10782. When the price of the D.J.I.A. recently broke below 10000, the 3.0% yield was violated significantly. One wonders if the Average now will revert to its long-time profile of value and decline again to yield 6.0%.  Based on the current dividend, that would indicate an eventual price area of 5,000.  If the composite dividend is reduced, that price at which the yield is 6.0% will be lower.  
 
The good news is that in the current price area of 8000, the dividend yield is about 4.0%, which should provide temporary relief and could provide a good trading rally.  However, I would not trust the rally to reverse the primary trend, which is down.  But this, too, will pass.  And as day follows night, bull markets follow bear markets.
 
I encourage investors to keep their eyes on investment value.  Now is the time when quality and value are most important.  Blue chip companies that have long-established records of dividend growth can be purchased and held by investors. They provide a return on investment capital and are well positioned to move quickly upward when the trend turns.  Continue to check important statistics in I.Q. Trends.  Dividends should be well protected by earnings, and debt levels should be low.  Eventually you will even see stocks priced below book value, below the net asset value of the companies they represent.  This can be an important opportunity to construct a portfolio of blue chip stocks that will provide financial security for the rest of your lives.

Geraldine Weiss. Investment Quality Trends

The stock newsletter Investment Quality Trends is currently performing at the top of risk-adjusted stock newsletters on Wall Street for the past 20 years and is ranked #4 in risk-adjusted performance by Hulbert’s Financial Digest. IQTrends.com is earning 10.7% in annualized gains over the past 20 years, according to Hulbert’s, compared to general stock market performance of 9.9% (as of October 2008). IQTrends.com also has lower risk and volatility than the market average. To subscribe, go to IQTrends.com.

Please note: This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. The publicly traded companies mentioned in this article are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.

The political opinions expressed in this article belong to Geraldine Weiss and are not endorsed by NataliePace.com. (She is a brilliant woman, however, who founded one of the most successful stock newsletters of all time.)

Haunted Halloween. Negative GDP Growth Statistics Are Predicted to Drag Down the Dow.

by Natalie Pace.

Includes my Hot News on Cool Stocks list.

October 29, 2008

General Stock Market Performance

Market Commentary

Original Photo by: Stacie Isabella Turk, Ribbonhead.com ©2008. Stylist: Arlene Hylton-Campbel, 818-710-0079.

(This is a reprint of the October 11, 2008 Market Commentary. Still Relevant.)

LOOK FOR AN ELECTION UPDATE ON THE SHARING WISDOM BULLETIN BOARD OR ON THE HOME PAGE ON November 11, 2008!

There was a time in U.S. history – not so long ago -- when slavery was legal and women were not allowed to vote. Countries experimented with monarchies and communism and found out that freedom works better. Religions experimented with oppression and Earth-centric views, only to find that the Sun, not the Earth, is at the center of our galaxy and that individuals could be spiritual even when they felt lost -- like star dust in the vast unknown.

We are today at the crossroads of another social evolution – this time in the way we take ownership in corporations (previously merely known as your pension plan, retirement fund, IRA, annuity, insurance policy, et. al.). And if you are stuck in the old way of doing things -- whether knowingly or unknowingly -- you are probably one of the many people who are hurting big time right now. As I outline in my article, "Resurrect Your Portfolio," in this month’s ezine, if you lost more than 25% and you are over the age of 25, your nest egg was cracked to begin with. My recession proof nest egg strategies would have cost the 25-year-old a maximum of 20% in losses and the 50-year-old would not have seen more than 11% drop from the value of her nest egg. Bill and Nilo Bolden lost nothing at all.

Yes, you heard me right. Not every one is hurting. Bill and Nilo Bolden didn’t lose anything in their nest egg by using the recession proof strategies that I outlined in my February 2008 article entitled, "Recession Proof Your Portfolio." (See Bill and Nilo’s story in the October 2008 ezine.) If you lost more than 25% of your nest egg and you are over 25, you need to take ten minutes to read this article and the "Resurrect Your Portfolio" articles RIGHT NOW.

If your financial guru or certified financial life partner did not give you the information that is outlined in my new book, Put Your Money Where Your Heart Is, and is briefly summarized in the two articles highlighted above, then you need to get a better source of information NOW and going forward. The strategies I used to help Bill and Nilo Bolden NOT LOSE ANYTHING AT ALL in the most recent downturn are based upon Modern Portfolio Theory, which was first outlined by Nobel Laureate winning economist Harry Markowitz in his University of Chicago Ph.D. thesis in 1955. So, if your CFP or guru wasn’t employing a strategy which has been around for HALF A CENTURY last week, don’t count on her employing it now to get you out of this mess.

The truth is that many CFPs, brokers and mutual fund providers do not employ this strategy at all because the system wasn’t set up to reward them for doing so. I want to stress that your 401(k) provider and/or broker are not necessarily "bad guys," any more than people who insisted on hand stitching when the sewing machine was invented or the people who sold you an 8-track player in the 70s were "bad." They are, simply, "old school" or under-informed, and there are "new, improved" plans available that both your and your Human Resources provider need to know about RIGHT NOW, if you wish to enjoy the steady gains that are provided to the diversified stock portfolio, when the investor takes a long term view.

Thankfully, Roger Cooper and the Vanguard Press had the vision to believe me when I outlined my book, Put Your Money Where Your Heart Is, over a year ago. That book is available NOW for pre-order at your favorite online book retailer and will be on bookshelves at the end of the year.

There are literally millions of "experts" out there claiming they are the be all and end all to help you become a millionaire. So how do you know who is really giving you the best information and why should you listen to me? The proof is in the pudding. Bill and Nilo lost nothing. If you lost a lot, then keep reading.

Some so-called "experts" are shysters and scam artists. Some are trying to sell you expensive software that they say can "do everything for you with 85% acucracy." (Those sites usually have misspelled words, which is why I left accuracy misspelled.) I have heard many, many stories of newbie investors who spend tens of thousands of dollars on expensive software, only to lose hundreds of thousands of dollars on the market. Some financial services providers are just stuck in the old way.

Some "pundits" are forced to be on television everyday and try to sound smart. An enlightened few have studied Modern Portfolio Theory and communicate with the brightest economists in the world – who advise our policymakers. Certainly NY Times journalist Stephen Dubner is in a better position to write on the economy, being a co-author of Freakonomics, than most of the pundits. Dr. Gary Becker, Nobel Laureate winning economist, and Steven Levitt, economist, bestselling author of Freakonomics and University of Chicago professor, have blogs, making it easy for you to get great information in an easy-to-read format. FINRA.org, the financial industry regulatory authority, offers extensive, easy-to-read content and alerts for investors, as does the Securities and Exchange Commission (SEC.gov).

I am the only financial pundit whose book receives an "enthusiastic" recommendation from a Nobel Laureate winning economist, who is one of the most respected economists in the world – Dr. Gary Becker.

You are the architect of your life plan, and your CFP and financial guru of choice should be helping to guide you with sound and wise strategies that work in bull and bear markets. It is your money and your life and if you don’t pick a great partner and they don’t advise you well, you lose, not them. They still get paid for doing their job, regardless of whether or not they do it well. You have to choose your partners carefully because your lifestyle depends upon it!

You don’t have to get a Ph.D. in reading mind-numbing charts. Bill and Nilo Bolden took less than an hour to realign and save their portfolio. Read that again. Bill and Nilo Bolden took less than an hour to realign and save their portfolio, based upon a pie chart that I drew up on a napkin. Nilo is now working to find a new 401(k) provider that can offer the employees at her law firm better options to diversify their portfolio as well. Some of the staff listened to her and employed my pie chart and are extremely pleased. Those who didn’t have lost hundreds of thousands of dollars unnecessarily.

As a person who recently signed up for my retreat says, “I first saw the flyer for Natalie's workshop in about March. I was interested, but I still trusted my financial advisor at that time and the weekend workshop seemed expensive....oooh, nothing in my life, including buying a house in Venice, has ever been as expensive as trusting that advisor!”

I have heard people saying that they are just going to ride this one out and that everything has to get better now. However, you cannot afford to bank on the same unenlightened, uninformed person who is stuck in the old ways of investing to resurrect your portfolio, or think that since you’ve already lost so much, you may as well just keep everything the way that it is. That would be akin to saying that you should just walk to NYC, when there are planes to take you there, or stay invested in the horseless carriage when the car was invented, or that you want to have square wheels instead of the rolling kind. This is a NEW WORLD. General Motors and Ford Motor Company together, combined, are worth less than one-tenth of Toyota Motor Company. Wake up!

I warned to avoid GM, Fannie Mae, Lehman Brothers and to trim back on housing years ago. These articles were published in my ezine as early as 2004, 2003, 2006 and 2005 respectively. Subscribers who have been religious about reading and acting on my news and information are doing great right now. You can click on the blue-highlighted words to read those articles first hand, or go to vol. 1, issue 50, vol. 1, issue 38, vol. 3, issue 6 and vol. 2 issue 5, respectively. The Lehman Brothers’ warning was in BOLD CAPS at the top of the Investment Banking Stock Report Card. (Bear Stearns ranked so poorly in the Stock Report Card that I didn’t even bother including it.)

Below are a few changes that have Revolutionized Investing and truly empowered the individual -- provided you educate yourself and become the architect of your money!

So, the first steps in resurrecting your portfolio are:

1. Get a New Guru: Stop listening to anyone who did not warn you about Recession Proofing your portfolio at the beginning of 2008 (or prior). Start reading the NataliePace.com ezine religiously. Dr. Gary Becker, FINRA (the regulatory agency of brokerages), SEC Investor Alerts and more reputable sources are published monthly in our ezine, alongside my own commentary, which has saved nest eggs and brought prosperity to many traders as well.
   
   
2. Hire a new ETF 401(k) provider and invest in ETFs: Search out better companies and brokers for a new 401(k) package at work and your new personal IRA, insurance package, annuity, etc.. Any plan that you currently have which is invested in mutual funds can and should be able to be invested in ETFs. Don’t expect the current provider to give you this information. They don’t want to lose you as a client, and if they had the information (or the incentive to offer it), you would already be invested in ETFs. The competing providers will help you to roll your old plan into their company WITHOUT PENALTY.

It may take awhile for the old school brokerages to catch up. General Motors was still focused on the SUV and Hummer when Toyota won Motor Trend’s Car of the Year for its Prius.

3. Educate yourself now from a reputable source ONLY: Educate yourself enough to know investing basics. Those basics include: the ability to pick a great certified financial life partner, the strategies of Modern Portfolio Theory and fundamental information on why the top mutual fund holdings of 2007 – like Lehman Brothers, Fannie Mae and Philip Morris tobacco company – were the worst investments to be so mired in (something I warned readers about years before the current tragedy took place). Start by reading the October ezine online now at NataliePace.com. Come to my retreat in November, 2008. Sign up before November 8, 2008 and receive the early bird pricing. (We’ve extended the pricing through that time.) Three luscious days of learning in the seaside resort of Santa Monica, California are all you need to start on a new path of enlightened, effective investing and a resurrection plan for your nest egg.
   
   
4. Buy Put Your Money Where Your Heart Is, which is available now for pre-order at your favorite online bookseller. Read "How to Pick a Broker" in the Investor Edu section at NataliePace.com. Send this article to at least a dozen friends that you wish to empower.

The "Resurrect Your Portfolio" article in this month’s ezine outlines a new "napkin" pie chart strategy for your asset and industry diversification, now that the big hit has occurred. The new strategy will be different going forward than it was before the big drop. Be sure to read it. If you keep things the way they are, you are sticking with a bad plan that has probably cost you half of your nest egg already. If you stick with Treasuries and bonds, you’re not positioned to recover well. And if you stick your head in the sand and keep things exactly the way they are, you could be left in the dust of dying industries and corporations, while others are profiting.

If you have a degree and certainly if you have an advanced degree, you have spent a quarter of a million or more learning how to earn income. No one ever taught you how to invest. As a result, unfortunately, last week you may have lost half of your nest egg. If you did lose that, or anything close to that, then you need to shift into the new paradigm NOW and you need someone to guide you into that new territory. For less than one percent of what you spent to get your degree, you can be well on your way to earning gains in your nest egg while you sleep – and having a more restful night during the hard days ahead. This financial crisis is not over yet – not by a long shot. Sign up NOW for the November 20-22, 2008 retreat at the Join Now link on the home page at NataliePace.com.

Again, please forward this article to at least a dozen friends that you wish to empower. All they need to register for 30 days free and access the article is an email address at the JOIN NOW link at NataliePace.com.

Track Record of our Reporting
While the markets have fallen in 2008, the Hot News and Cooling Off lists below have a winning track record – in bear and bull market years. 34 positions listed below – 60% -- have delivered impressive gains this year, even while the Dow Jones Industrial Average is down 36% over the past year! Only twenty-four of our listings went in the opposite direction of the reporting, which is quite impressive given the market drop of late September and early October. Yes, many, but not all, of our top performers were shorts, which is why we added options training to the retreat. Remember that the trading portfolio should be a small portion of your nest egg, equal to your experience. If you’re new, you should be using education or fun money, not your nest egg, to learn on. Take your profits early and often in this volatile, down-trending year.

Even during the flat year of 2007, our featured companies had outstanding performance between Oct. 2006 and June 2007! 4 out of 9 companies – almost half – doubled or more from the time they were featured to the time they were taken off of the list. 48% of the companies featured in my stock newsletter between 2002 and 2005 – 25 out of 52 companies – DOUBLED as well, and the majority of the remaining 52% well outperformed the marketplace. (See the chart in the article, "25 of Our Companies Have Doubled," from vol. 4, issue 4, the April 2007 ezine, for a listing of companies.)

3 out of 5 Company of the Year selections more than doubled.  My 2003, 2004 and 2007 Companies of the Year have posted up to 9000% gains (Taser), up to 690% gains (Opsware) and up to 215% gains (Suntech Power Holdings), respectively.  MySpace, my 2006 Company of the Year, was a large part of News Corp’s success with shareholders that year.  Even OSI Pharmaceuticals, my 2005 Company of the Year, which was the only company that lost money after being featured, is back on track for gains!  So three out of five are superperformers, one is performing well above the market and one is down. That’s the kind of record that puts you on top on Wall Street.  (I launched my first publication on 11.15.02, and featured the first Company of the Year on 1.1.03.)

TipsTraders.com continues to list me as a Highly Recommended Stock Picker, with their independent ranking system, where I’ve repeatedly occupied the #1 position. Some of our best picks include: Bioteq Environmental (BQE) +144%, Blockbuster Video (BBI) +82.5%, Genentech (DNA) +415%, Google (GOOG) +545%, Las Vegas Sands (LVS) +139%, LifeCell (LIFC) +180%, Macerich (MAC) +150%, Opsware (OPSW) +690%, Rio Tinto (RTP) +145%, Sohu (SOHU) +150%, Suntech Power Holdings (STP) +107%, Taser (TASR) up to 9000% gains and World Water & Solar (WWAT) +181%. (Some of the best picks in 2008 were put options – on the Cooling Off list. Look there for details.)

Market Movers:
The Federal Open Market Committee and Monetary Policy
The Fed funds rate was cut on October 8, 2008 to 1-1/2 percent. The Fed funds rate was cut again on October 29, 2008 (the day before the GDP growth estimates are to be released by the Bureau of Economic Analysis) by 50 basis points to 1 percent. A joint statement on the October 8, 2008 cut was released by a number of global banks, stating, "The Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, Sveriges Riksbank, and the Swiss National Bank are today announcing reductions in policy interest rates. The Bank of Japan expresses its strong support of these policy actions."

In the 10.29.08 press release, the Federal Reserve Board further elaborated on the reasoning behind the rate cut, writing: "The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures. Business equipment spending and industrial production have weakened in recent months, and slowing economic activity in many foreign economies is damping the prospects for U.S. exports. Moreover, the intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit."

Final GDP growth rates for 2Q 2008 were released on September 26, 2008 at 8:30 a.m. ET.  The BEA final estimates were much higher than estimated, at 2.8%. By comparison, the GDP growth rate in 4Q 2007 and 1Q 2008 were anemic GDP growth numbers of .4 and .9%, respectively.   

Advance GDP growth estimates for 3Q 2008 will be released on October 30, 2008 at 8:30 a.m. ET. For more BEA release dates, go to the BEA.gov website and be sure to visit the NataliePace.com calendar section often. This one is not predicted to be good. Incoming projections show the GDP growth numbers to be negative.

EDUCATIONAL OPPORTUNITES AND INFORMATION:
1. FOMC Information: Interested in reading the press release of the October 29, 2008 FOMC meeting for yourself? You can. The official Federal Reserve document is available online. Click on FOMC, or go to FederalReserve.gov to read!

The tentative FOMC meeting schedule for the 2008-2009 calendar is: December 16, 2008 (Tuesday), January 27-28, 2009 (Tuesday-Wednesday), March 17, 2009 (Tuesday), April 28-29, 2009 (Tuesday-Wednesday), June 23-24, 2009 (Tuesday-Wednesday), August 11, 2009 (Tuesday), September 22, 2009 (Tuesday), November 3-4, 2009 (Tuesday-Wednesday), December 15, 2009 (Tuesday).

2. Calendar Section: Conferences, Online Chats and more: Check out the Calendar section of NataliePace.com regularly. There are many wonderful opportunities to chat one-on-one with millionaire money managers, life coaches, economists, respected money gurus, real estate veterans and CEOs! Be sure to check out the dates of the mid-month Hot News on Cool Stocks Update and the publication date of our next ezine. Get more information on how to best use our articles in the FAQs article, located under the Investor Edu link on the home page of NataliePace.com. Don’t miss the Get Rich and Enrich Retreat in Santa Monica, California, from November 20-22, 2008. More information on the retreat can be found on the home page at NataliePace.com under the Get Rich and Enrich banner ad, and you can register NOW and still receive the early bird price on the Join Now link at NataliePace.com.

3. Survey Results: Who will be the next President of the U.S.? What is the most important issue facing the world today? Our subscribers are more concerned about the environment than any other issue — but the financial crisis is a close second.   Vote and view on the home page at NataliePace.com. Simply click on the survey that is currently on the home page, and you will be taken to a page with all three of the current surveys. Cast your vote there!

4. Euro interest rates: At the European Governing Council meeting on October 2, 2008, it was announced that the rates of 4.25% (main refinancing), 3.75% (marginal lending) and 3.25% (deposit facility) would remain unchanged. The next meetings and interest rate announcements are scheduled for November 6, November 20, and December 4, 2008 at 2:30 p.m. CET.

Hot Stocks List
Investors who "never pay retail," note that the BOLD highlighted stocks are trading at their 52-week lows or near the price featured in NataliePace.com’s article. This may be a good buying opportunity. (If the stocks are not highlighted, then in our estimation, this is not a good time to buy. Reasons are explained in the news commentary.) The companies that are listed below which are not highlighted may not be in a good buying range, but they appear to be poised to continue performing well (if you have already purchased them). There are never any guarantees in life, and all stocks are risk-based investments. Consult your certified financial planner before making any changes to your investment strategy. And remember that these "Stocks on Steroids" are not intended to be part of your nest egg strategy. If you’ve never traded individual stocks before, this is your "fun" or "education" money. You should not stake your future on anything that you don’t have mastery over.

Hot News List (highlighted).  Be sure that you are buying low.
Rio Tinto (RTP)
U.G. Gold (UXG)

The GDP growth statistics (preliminary) report on October 30, 2008 are predicted to be less than favorable — even recessionary.  So, we’re on the sidelines until November 1, 2008 with all stocks – even Rio Tinto (unless you can pick it up for under $138/share))!

DELETIONS (Remember to take your profits early and often):
LDK Solar (9.2.08)

HOT NEWS on COOL STOCKS LIST

Recently Deleted/2008 Companies featured:
Echelon +20%, GE, +13% and +18%, Google, +15% and +31%, Johnson & Johnson +10%, LDK Solar +18%, Microsoft +12%, Satcon +13%, Suntech +35%, Trina Solar +22%, World Water & Solar +22%. Genentech (8.1.08) +40%. Altair (deleted on 8.7.08) posted gains of +3% and +57%. Zoltek (deleted on 8.18.08) lost 30% before being removed. LDK Solar was deleted on 9.2.08 with 46% and 29% profits.

Deleted from the Hot News list:

Stocks to Watch
Some of these are great companies that we’re thinking of adding to the Hot List and some are stinkers we’re thinking of adding to the Cooling Off List.  Read carefully to identify which is which!  

Note that right now most of our favorite companies are on the Watch List, anticipating continued weakening of the stock market, and share prices.

Recent Additions:
Big Lots (BIG) (added 9.2.08)
First Solar (added 9.30.08)

Recent Deletions:
Fannie Mae (deleted on 9.12.08). Taken over by the Feds.
Genentech (added back to the Hot News list on 10.10.08)
Google (added back to the Hot News list on 9.30.08)
EUROX Mutual Fund (added back to Hot News list on 10.10.08)
LDK Solar (added back to the Hot News list on 9.30.08)
MEMC Electronics (added back to the Hot News list on 9.30.08)
TREMX International Mutual Fund (added back to Hot News list on 9.30.08)

Cooling Off Stocks List (may be Poised for a Decline in Share Price).
Note: The companies listed in bold have recently been added to this cooling off list and/or may be currently poised for a decline in value. Investors who have them in their portfolio should read the recent news and consider whether it is time to sell and take profits, dump losses, short the position and/or simply weather the storms, while keeping the company in their long-term portfolio. At any rate, always consult your certified financial partner before making adjustments to your portfolio. (Again, note that the stocks on this chart are expected to go DOWN in price.)

Highlighted Companies (Cooling Off List):
Wells Fargo (10.29.08)

Recent Deletions:
Boston Properties (on 10.9.08)
Las Vegas Sands (on 10.09.08)
Macerich (on 10.09.08)
First Solar (deleted on 9.30.08)
Mentor Corporation (deleted on 9.30.08)
Medicis Corporation (deleted on 9.30.08)

Recently Deleted in 2008:
Fannie Mae was deleted on 2.11.08 after losing -50% and -56% of its share price value, and then again on 7.1.08, after losing another -40%. (Both puts more than doubled.) Novastar Financial (NFI) was deleted on 6.2.08 with -95% share price implosion. Sears Holding Corp. was deleted on 7.1.08 with 64% gains on the put option. Wells Fargo was deleted on 7.1.08 with 83% gains on the put. Apple was deleted on 8.1.08 with 35% gains on the put. The Google put, deleted on 8.1.08, was another great performer, with over 50% gains. First Solar, gains of over 32-34%. Mentor was deleted on 9.30. with 75% gains on the put option (-17% on the share price); Medicis was deleted with gains of over 37% on the share price (down direction). Boston Properties, Las Vegas Sands and Macerich were deleted on 10.9.08 with gains of 16-30%, 66% and 28-42% respectively.

Please note: NataliePace.com does not act or operate like a broker. We report on financial news, and are one of the most trusted independently owned and operated financial news corporations in the U.S. This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. The publicly traded companies mentioned in this article are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.

Investors should NOT be using the Hot News on Cool Stocks list or the Cooling Off list to trade their nest eggs. Your retirement plan should reflect a long, safe strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.

IMPORTANT DISCLAIMER: Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

NataliePace.com Calendar.

Don’t miss Natalie Pace’s November 2008 Get Rich and Enrich Retreat in Santa Monica, CA. Your last chance to resurrect your nest egg this year!

The NataliePace.com Calendar section features conferences, teleconferences, retreats, educational opportunities, cultural events, galas, market events and online chats with executives and VIPs. Stay plugged in! Visit our calendar section often.

See below for just a few of the amazing educational and networking opportunities that world-class organizations are offering for you. To access links to the event website and registration, go to the Calendar section at NataliePace.com.

Put Your Money Where Your Heart Is, by Natalie Pace. Natalie Pace's first book is available for pre-order now! Be the first to own it!

Get Rich and EnRich Retreat, Santa Monica, CA
Thursday, November 20-22, 2008
3-day retreat with Natalie Pace. Recession Proof Your Portfolio. Learn how to profit in downtrending, turbulent times. Invest in the companies of tomorrow and avoid dying industries. Early bird registration NOW through Oct. 15, 2008 ONLY. The October Retreat SOLD OUT, so be sure to ACT NOW to ensure your seat at this life-changing, transformational, educational retreat.

21-day Get Rich and Enrich Coaching Call Series
Saturday, November 1st, 2008
7:00AM through 7:30AM
How would you live if you had all the money in the world? Wake up to Natalie for 21 days in a coaching call series designed to activate and maximize the creative, abundant potential in your life. Live your dreams starting right now! Sign up for Natalie’s Get Rich and Enrich Retreat November 20-22, 2008 in Santa Monica, CA NOW and receive this extraordinary, life-changing 21-day call series FREE. (value: $595). Register online at the Join Now link on the home page at NataliePace.com before November 8, 2008 and receive the early bird discount rate of just $1895 per person and $2850 per couple (half off for the second person). Get more details on the retreat on the Home page at NataliePace.com, under the Get Rich and EnRich Retreat banner ad. Get information on the call series on the Sharing Wisdom bulletin board. Please know that the retreat also includes a free upgrade to the Premium Subscription, offering you ongoing education and news for the next 12 months. Value: $2000. All totaled, you receive over $11,595 in value when you attend the retreat in November!

SACC NY Women's Conference, NYC
Thursday, November 6th, 2008
The Swedish American Chamber of Commerce presents Women Leaders in the 21st Century. A day-long conference focused on empowerment, education and networking with some of the most admired VIPs in NYC and Sweden.

Opportunity Green Conference 2008 at UCLA
Saturday, November 8th, 2008
Opportunity Green 2008 is focused on being green + being profitable. Explore Product Innovation & Design for Sustainability, How Fortune 500's are Implementing Sustainability for Growth, Raising Investment Capital, Branding and more…

SPECIAL ELECTION Hot News update
Monday, November 10th, 2008
NataliePace.com SPECIAL ELECTION update of the Hot News on Cool Stocks list will be available on the home page between noon and 9:00 p.m. PT.

Teleconference with Natalie Pace
Friday, November 14th, 2008
7:00AM through 7:30AM PT
Participants in the 21-day coaching call series get a free interactive question and answer session with Natalie Pace. 21 days to prosperity and abundance. A complete shift in how you look at and do everything!

LA Opera: Carmen by Bizet
Saturday, November 15th, 2008
7:30PM through 11:00PM ()
One of the sassiest and most entertaining operas of all time! Don’t miss it! Mezzo-soprano Viktoria Vizin, who was hailed as a "ravishing Carmen" by the Chicago Tribune in her appearance at Lyric Opera, makes her Company debut as the sensuous Gypsy diva.

Greenbuild Conference, Boston, MA
Wednesday, November 19th, 2008
Revolutionary Green: Innovations for Global Sustainability, hosted by the Green Building Council. This year, the keynote speaker is Archbishop Desmond Tutu. Experts on the green building movement and green collar jobs.

Premium Subscriber Teleconference with Natalie Pace
Tuesday, November 25th, 2008
5:00PM through 6:00PM PT
Wonder how to resurrect your portfolio? Want to hear more details about the strategies that saved Bill and Nilo Bolden's portfolio. To date, they haven't lost anything. If you lost more than 25% of your portfolio and you are over 25, you need to make this call a priority. Premium subscribers only. (Note that you receive a FREE premium subscription when you attend the Get Rich and Enrich Retreat. Value: over $2000)

Transportation Conference and Expo in DC
Tuesday, December 2nd, 2008
An open forum for research and development of electric drive including: battery, plug-in, hybrid, and fuel cell. researchers, educators, designers, policy makers and end-users to promote sustainable vehicles.

Federal Open Market Committee Meeting
Tuesday, December 16th, 2008
8:00AM through 5:00PM
The Feds meet for one-day to determine whether or not to increase, pause or lower the Fed funds rate. Is the Santa Rally in full swing this election year?

Put Your $ Where Your Heart Is by Natalie Pace!
Tuesday, December 23rd, 2008
Natalie Pace's first book will be released just in time for Christmas and the New Year, New You gift-giving. Pre-order now!

NOTICE: NataliePace.com is NOT a stock brokerage service, and does not operate or act as one.