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TO ACCESS A PRINTABLE COPY OF THIS NEWSLETTER CLICK HERE.
JULY 2009: Best of 2009. Quote of the Month: Elizabeth Warren, Professor, Harvard University |
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The Business of Books. by Chellie Campbell, author of Zero to Zillionaire. "Chellie, you’re a successful published author – can I take you to lunch and pick your brain about the book business and how to get my book published?"
I can’t tell you how many requests like that I have had since The Wealthy Spirit and Zero to Zillionaire were released in 2002 and 2006, respectively. After awhile, I was getting too fat from all that lunching out, and wrote it all up in a book publishing report (available free to all Dolphin Club members). Here are some interesting book industry statistics from that report: 1. 2% of the 200,000 books published each year become bestsellers. 2. 84% of the bestsellers are published by the 5 largest New York publishers. 3. 2 out of 10 books published make a profit for the publisher. 4. In 2004, 950,000 titles out of the 1.2 million tracked by Nielsen Bookscan sold fewer than 99 copies. Another 200,000 sold fewer than 1,000 copies. 5. Only 25,000 books sold more than 5,000 copies. 6. The average book in America sells about 500 copies. 7. Only 10 books sold more than a million copies in 2004. 8. Fewer than 500 books sold more than 100,000 copies in 2004. 9. The magic number for a book to be considered successful is 10,000. When The Wealthy Spirit reached 12,000 books sold, my editor called me and said, "We’re ready for your next book!" And so I got the contract to write Zero to Zillionaire. The Wealthy Spirit has now sold nearly 20,000 copies and Zero to Zillionaire is approaching the magic number of 10,000 copies sold. The good news is you don’t have to have a blockbuster like The Da Vinci Code in order to be successful with your books. You only have to sell 5,000 to be in the top 2% of bestselling books. That looks a lot more doable than selling a million, doesn’t it? Royalties on books usually start at 10% - and unless you have a major publisher, they are now based on wholesale price and not retail, and the reserve against returns is 15-25%. So the odds on making your fortune from a book alone are slim. Non-fiction books are like business cards. They are my best marketing pieces, help me spread the word about my seminars and professional speaking, and give me oodles of credibility so I can charge good fees for my work. Many times people have signed up for my workshops just because they were fans of my books. They are one of my "multiple streams of income" and I have ideas for more books to come! Non-fiction book sales are all about PLATFORM. That means, how many people know who you are and will buy your book? That's why you see so many celebrity books - they have huge platforms and so will sell many more books than an unknown author. That is why Jessica Seinfeld got a book deal for her cookbook when the unknown author who pitched basically the same book six months prior to her didn't get a deal. Books are widgets and publishers are manufacturers and their number one goal is to sell a lot of widgets. Never forget that! Here's some insider info: I was a speaker at a conference in Mexico in October, along with Marci Shimoff, author of 6 Chicken Soup for the Soul books. She is a part of a mastermind group of best-selling speaker-authors that do mailings for each other – you’ve seen the "Be a Bestseller on Amazon" promotions with all the free goodies from other self-help authors, yes? Marci’s announcement about her new book Happy for No Reason, which is a fabulous book, went out to 5 million people! That's what I mean by platform, and why she got a big deal with a major publisher. But look, she started small, too. She pitched Chicken Soup for the Woman's Soul to Jack Canfield when there wasn't any idea for a series of "Chicken Soup" books – there was only the one book. But she saw a sequel in meditation and called Jack and pitched her idea. Then she built her reputation by speaking and writing more of those titles and I'm guessing not much money in the beginning. Now she commands big speaking fees and gets big advances for her books. The book business is like every business. People who have made it usually built their brand and their business slowly over time and came into the big money later, after years of hard work. Read the biographies of any famous person and you'll find that same story over and over. Faith Hill became famous with her fourth album. Bon Jovi sold his 50th song demo, and the band didn't make any money until their 3rd album. That's why you have to love your work – your goals have to be so juicy that it’s fun just to work towards them! Because that's all that will sustain you through the failures along the road to success. Look at everything as fun and an adventure along the way and you'll be happy and successful every day of your life. And that’s my secret of happiness.
Chellie
Campbell: 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 Financial Stress Reduction® 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.
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5 Tips for Avoiding Foreclosure Scams. by the Federal Reserve.
2. Don't pay an arm and a leg. You should not have to pay hundreds--or thousands--of dollars. Most HUD-approved housing counselors provide no-cost counseling services and many more provide low-cost counseling. Do not agree to work with a counselor who collects a fee before providing you with any services or who accepts payment only by cashier's check or wire transfer. In general, do not pay money to anyone unless you know exactly what services you will receive. 3. Be wary
of "guarantees." 4. Know
what you are signing--and be sure you sign it. 5. If it
sounds too good to be true, it probably is.
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Life Begins with Li (Lithium). by Natalie Pace. Includes a Lithium Ion Battery Stock Report Card. Altair Nanotechnology, Ener1, FMC Corporation, Maxwell Technologies and Sociedad Quimica y Minera are on the Watch List currently, anticipating that the summer doldrums and September market activity could bring the prices lower. Full Disclosure: I do not own stock in any of the companies mentioned in this article.
Well, if you’ve listened to any of President Obama’s speeches or press conferences or read the American Reinvestment Recovery Act, you should be clear by now that President Obama is a clean energy fiend and he’s willing to back up those beliefs with some mean green. According to President Obama, his budget "leads to broad economic growth by moving from an era of borrow-and-spend to one where we save and invest." The President believes that an investment in clean energy, in education and in healthcare will fuel sustainable prosperity for Americans and that over the last eight years, a boom/bust cycle of inflated home prices and maxed-out credit cards created the "illusion of prosperity." President Obama’s American Reinvestment Recovery Act (ARRA) includes $39 billion in energy investments at the Department of Energy and $20 billion in tax incentives for clean energy. According to the White House Clean Energy Fact Sheet of March 23, 2009, The Obama Administration wants to fund an advanced research agency for energy (modeled after the agency that created the Internet) that will discover breakthroughs in energy storage, super-efficient engines and solar cells as cheap as paint. The plan also calls for supporting "U.S. manufacturing of advanced batteries needed for plug-in hybrids, renewable energy backup, and other applications." In other words, a cleaner/greener American Life in 2009 begins with Li (Lithium) because the "advanced batteries" used to store power on the grid as well as in our electric cars and hybrids are all conducted by this basic element. Some forward-thinking firms have already put plans in play to clean up the auto industry quickly on the federal dime. A group called the National Alliance for Advanced Transportation Battery Cell Manufacturers is already working under the advisory guidance of The U.S. Department of Energy’s Argonne National Laboratory. The Alliance seeks to develop one or more manufacturing and prototype development centers in the United States, which will be shared by Alliance members, jumpstarted by an investment of $1 to 2 billion over five years from the U.S. government. The founding members of the Alliance include 3M, ActaCell, All Cell Technologies, Altair Nanotechnologies, Dontech Global, EaglePicher Corporation, EnerSys, Envia Systems, FMC Lithium, Johnson Controls-Saft, MicroSun Technologies, Mobius Power, SiLyte, Superior Graphite and Townsend Advanced Energy. Now before you take this list to the bank (err brokerage), it’s a good idea to review my Lithium Ion Battery Stock Report Card. Though it is expected that President Obama and his team will begin deploying funds for a green auto industry quickly, and the founding members of NAATBCM are in line to benefit from all that check-writing, the underlying health of the company receiving the aid will be a key factor into how well the investment pays off. After all, General Motors has quietly received $13.4 billion from the Treasury Department since December 29, 2008, but GM continues to trade lower than it was half a century ago, with a market cap of just $2 billion. Government dough isn’t enough yeast by itself to make the company’s share price rise. You’ll see that I’ve highlighted many of the companies listed on the Stock Report Card, namely FMC Corporation (FMC), Altair Nanotechnologies (ALTI), Ener-1 (HEV), Maxwell Technologies (MXWL) and Sociedad Quimica y Minera (SQM). Johnson Controls is the only company on the report card that will not be on my Hot News on Cool Stocks list, and that decision flies in the face of the headlines of other financial media, who are writing that this company is the leader of the pack. (Please note: I did not research all of the companies in the Alliance, and I’ve added a few lithium plays that are not in the Alliance, at least yet.) Johnson Controls and French battery developer Saft are touted as the strongest play in the lithium ion battery field for a few reasons. On February 3, 2009, Johnson Controls inked a deal with Ford to supply lithium ion batteries for a new hybrid car beginning in 2012. (GM inked a deal with LG Chem, based out of China, to supply the lithium ion batteries for their Volt.) Johnson Controls Saft batteries will also power BMW and Mercedes Benz cars. Clearly this company is respected as a leading battery maker and that respect and those relationships have given Johnson Controls an early lead in the game. However, the same issues that plagued the airline industry and the auto manufacturing industry are present in Johnson – namely pension and other Post Employment Benefit obligations, which contribute to $5.2 billion owed in long-term liabilities, in a company with just $7.45 billion market value. Additionally, the profit margins at Johnson are less than 1%, sales were down 23% last quarter and the company announced on Friday, March 27, 2009 that they would be laying off workers and closing 10 manufacturing plants. The goal is to save $200-$215 million annually. While Johnson is downsizing, new companies, like Ener1 (symbol: HEV) and the privately held company A123, have plans to ramp-up lithium-ion battery manufacturing facilities on U.S. soil, using the government’s Reinvestment Act money to do so. Ener1 wants to build a lithium-ion battery manufacturing plant in Indiana, and A123 has asked for $1.8 billion to build a plant in Detroit. Ener1 has a $70 million supply contract with Think Global (an electric car company based out of Oslo, Norway) and a $34 million purchase order from Think, which could certainly catch the attention of the check writers at the Treasury Department. Of course every great story has a few twists and turns, and Think is in the process of "restructuring" its agreements with creditors in the Norway legal system (bankruptcy protection). Ener1’s majority shareholder (parent company), Ener1 Group, has given Think almost $4 million in bridge funding to help the process move forward more quickly. Altair Nanotechnology is already making lithium ion batteries for the Department of Defense, was the battery supplier for Phoenix Motor Cars (before the relationship was terminated by Altair) and recently had a successful test for a 2 megawatt grid capacity battery system for AES Energy (a leading power company, with operations in 28 countries on five continents and the capacity to service up to 100 million people). Altair has 10 U.S. and 29 International patents protecting their lithium-ion battery technology, and they have applied for government money to expand as well. Since Altair is already partnered with the Department of Energy, the U.S. Air Force, the National Science Foundation and the Department of Defense, it is in a great position to expand operations on the Federal dime. Maxwell Technologies is run by CEO David Schramm, who had a long career (over three decades) with General Motors and Delphi Automotive Systems. Maxwell supplies ultracapacitors, which recuperate energy from the braking system. Maxwell currently has over ten times the sales of Altair and Ener1, at $82 million last year. Maxwell’s products are used by hybrid manufacturers, by China in their hybrid buses, by European wind energy producers and even in aerospace applications. The company has also applied for government money. Perhaps the easiest call of all, however, is lithium itself. Lithium is the basic material involved in batteries that fuel almost everything in life – from computers to hybrids to cell phones and even flashlights. Good luck finding lithium mining companies on your own. I’ve scoured the Internet and only found two companies that are publicly traded – FMC Corporation (FMC), based out of Philadelphia, PA, and Sociedad Quimica y Minera, (SQM) based out of Chile. If money is poured into the advancement of lithium ion batteries and electric cars, then these two companies are poised to reap the rewards because the manufacturing of lithium is still a developing field. Demand for lithium should ramp up quickly with a rapid inflow of funding. So L-I-ve and invest in lithium in 2009, as one of the few thriving, hot spots in an otherwise dark and deadly bear marketplace. I added the following companies to the Hot News on Cool Stocks list this month: Ener1, FMC Corporation and Maxwell Technologies. Altair Nanotechnology and Sociedad Quimica y Minera were added previously to the list and remain there. Read this month’s Hot News on Cool Stocks list for additional information on all of these companies. Full Disclosure: I do not own stock in any of the companies mentioned in this article. About
Natalie Pace:
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.
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Stockerblog.com Exclusive: Interview with Natalie Pace – Part 2. by Fred Fuld.
Stockerblog.com’s Fred Fuld had the pleasure of interviewing Natalie Pace, head of her own financial publishing and media company, and author of the book Put Your Money Where Your Heart Is: Investment Strategies for Lifetime Wealth from a #1 Wall Street Stock Picker. She has been a repeat guest on Fox News, Forbes on Fox, Good Morning America, Time Magazine, USA Today, Kiplinger's Personal Finance, and other financial news media. If you missed Part 1 of the interview, you can check it out here. Stockerblog.com: What was your biggest investment mistake and what did you learn from it? Pace: I tend to do well in investments because I take a long-term view of investing. So for instance, my home did go under water. When I bought it, I bought in 1991, experiencing earthquakes, fires, floods, riots, and mudslides, so I was really waiting for the locusts to come. I believed in my home, I had bought it for a good price, I believed in my neighborhood. It was a condo in Santa Monica, it was a good long-term investment. So in the short term, it was underwater. People were coming in and buying one of the condos for half of what I had purchased mine for. I didn't get fazed by it and I held on for the long term, and it didn't even have to be that long. I had pride of ownership, I still lived there, and I made a good ROI when I did sell. If I had freaked out, and you have earthquakes, fires, floods, riots, and all those other things in a two year period, you can really freak out, if I had been the kind of person who had been ruled by stomach acids, I would have lost money if I had gotten out and sold at that time. The big lesson was to do your research up front, make sure you really believe in it, and be able to get through any storms that might arise between you and your ROI. Stockerblog.com: Since you've written your book, have you come up with any new bits of advice? Pace: Yes, because the book was written over a year ago. We were in the galley stage before the crisis hit. The strategies in the book are exceedingly helpful. The book says to diversify into ETFs because mutual funds are too big, they are not real diversification, and rebalance your portfolio twice a year. That strategy is amazing. If people just did that, they would be so protected, because one of the themes is always keep a percentage of your age safe. Now the important thing to remember also, is to get a really great source for ongoing investment information. In February 2008, I had a huge article, "Recession Proof Your Nest Egg" Now, and that article had a key recommendation, take an additional 20% safe. I talked to one couple where I drew a pie chart on a napkin, using the pie charts from the book, and keeping an additional 20% safe during the recession, and they have lost nothing. So it's really key to have ongoing sources. In two years, we will probably be coming out of this recession, and you will want to make sure you are not over-weighted safe, and you will probably want to be over-weighted in another industry. So it's really important to have ongoing news and a basic great strategy. Clean energy is still going to be a great industry to invest in. Each year, the hot industry changes. Stockerblog.com: Do you think that we are close to a stock market bottom? Pace: No, not at all. I do believe that 2009 is going to be another rough year. I think it’s really important to make sure you have a game plan that is both offensive and defensive. People should be aware of the fact that no matter what anybody says, you should have the ability to overweight and underweight. So you can be safe this year: not losing is winning. People are starting to worry about inflation, that is probably on the horizon, but I don't think it happens yet. I think people should be concerned about getting safe. I think they should be concerned about properly diversifying. And they should have some game plan on the four industries that I think are going to be hot this year, and that would be gold mining, clean energy, Australia & New Zealand, and biotechnology. Natalie’s Note: Please note that this interview took place in January 2009 at a time when the Dow Jones Industrial Average was trading 15% higher than it is today.
Dow Jones Industrial Average Index Performance January 1, 2009 through March 31, 2009
Natalie’s latest book, Put Your Money Where Your Heart Is: Investment Strategies for Lifetime Wealth from a #1 Wall Street Stock Picker is available at Amazon. You can also check out Stockerblog's review of the book. Interview by Fred Fuld at Stockerblog.com. . |
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Couch-Surfing and Other Creative Solutions for Distressed Americans. by Natalie Pace. Learn how Steve Jobs, Gloria Allred and I turned our breaking points into “Tipping Points.”
Hardship, adversity, challenges, devastation — in other words having a big reason why we have to act fast and boldly — is often the fuel of our most important, lasting and positive change. So often, our finest moments are not born of our own doing, but life's hardships, that provide the inspiration, or even necessity, for the journey in the first place. "Tough times" are just that - a period of our life - not forever, and believe it or not, they provide the opportunity to reinvent ourselves, if we're willing to: 1. Reach out You will be surprised, as you read below, of the VIPs who employed these ideals during the "tipping point" of their lives, and lived to enjoy new opportunities and achievements that are worthy of bragging rights. Below is a list of eleven out-of-the-box solutions and resources to help stop the drama, and start the renaissance of your life and our world. So, think of these as temporary solutions to shelter us from the financial storms and bridge us to a better tomorrow, so that we might, as President Obama says, "Come together and lift this nation from the depths of this crisis and perform something worthy to be remembered." 1. Couch-Surfing. It may be hard to imagine, but some of our most beloved billionaires were once just couch-surfing college dropouts. According to Steve Jobs, CEO and co-founder, Apple Computer, the seeds of Apple were quite humble! In his 2005 Stanford Commencement Speech, Jobs said, "It wasn't all romantic. I didn't have a dorm room, so I slept on the floor in friends' rooms, I returned coke bottles for the 5¢ deposits to buy food with, and I would walk the 7 miles across town every Sunday night to get one good meal a week at the Hare Krishna temple. I loved it. And much of what I stumbled into by following my curiosity and intuition turned out to be priceless later on." (You can watch Mr. Jobs' entire commencement address by clicking on the Stanford link above.) Even if you don't invent the iPhone, and your couch-surfing period returns little more than drool on a pillow, let Steve's story give you just the inspiration (and humor) you need to meander your way into a better life. Incidentally, the activist/attorney Gloria Allred and I both used house-sharing with another single mother when we had young children, in order to cut our expenses in half, have help with the parental responsibilities and to give ourselves a little time to think and breathe. Check out CoAbode.org, if you're interested in finding another single mother in your area. Don't overlook family members who might benefit from temporarily sharing their home with you. Everyone needs a little extra dough these days! 2. Loan Modification: HopeNow.com is an alliance between HUD approved counseling agents, mortgage companies, investors and other mortgage market participants that provides free foreclosure prevention assistance. FREE! Hope Now has already helped over one million homeowners modify their loans and avoid bankruptcy. 3. Complaints about any Shady Business: FTC.gov. The Federal Trade Commission handles consumer complaints about scams from shady business owners. There are plenty of untoward shysters in the "loan modification" business these days. Learn how to avoid these scams by reading the consumer alerts on the FTC website. 4. Investing Strategies for Lifetime Wealth: Buy and hold doesn't work. Mutual funds don't work. The Blue Chip Index has become the Bailout Index. What does work? Modern Portfolio Theory. Exchange Traded Funds. Rebalancing twice a year. Avoiding dying companies. Investing in products and services of tomorrow. It's as easy as pie - a pie chart that is (on page 92). All this and more is outlined in my new book, Put Your Money Where Your Heart Is. Access a link to buy the book by going to NataliePace.com. 5. Broker and Investor Education: FINRA.org FINRA is the regulatory authority for broker dealers. They have a fantastic investor education center online, as well as Broker-Check, which allows you to see if your Certified Financial Partner has had any complaints in the past. Get more information on bonds, stocks and brokers at FINRA.org.
6. Investment Education Seminar: Blind faith and buy and hold has lost you hundreds of thousands, if not millions of dollars, so why not spend $1300 and three days recession-proofing and resurrecting your nest egg in a plan that has worked for the last 10 years and will continue working for the rest of your life? The nest egg strategies you put in place at the Get Rich and Enrich Retreat allowed investors to capture the gains of NASDAQ 2000 (before the bust), real estate 2005 (before the bust), clean energy 2007 (before the bust in 2008) and more. Bill and Nilo lost nothing in their nest egg in 2008 and 2009, and the Green Goddesses earned top gains on Wall Street (40% and 150% in their last two trades) in 2008 and 2009, in a market that dropped over 46%! If these novices can do it, so can you. Be one of just 14 people at the Memorial Day Retreat in Santa Monica, CA, on May 21-23, 2009 in an intimate boardroom setting learning directly from me. Register before March 15, 2009 and receive EARLY BIRD PRICING and a FREE one-year Premium Subscription, valued at over $2000. Get more information on the home page at NataliePace.com under the blue banner ad that says, "Buy and Hold Doesn't Work." 7.Recently unemployed? One investment analyst has decided to volunteer her time at a local nonprofit organization. She is going to keep her skills sharp and learn some new chops, so that when she does go back to work, she can get a raise and a promotion to boot! Think creatively for ways that you can use the extra time to benefit something or someone or some organization that you've always wanted to help, with the eye that you can also improve your skills in the process. An investment in improving your skills, expanding your network of friends and helping humanity is an investment that pays off in ways you can never imagine, including on your resume, even if you must endure some time without a steady paycheck. 8. Stuck in a dead-end job. I know of a very successful Chairman/CEO type who turned the most challenging time of his life into a springboard. He exited an exciting, but low paying career. Moved back into his parent's house so that he could get training in a more lucrative profession, while still supporting his ex-wife and children. In a short time, he exited the training program at the top of his class and then charged up the executive ladder to become CEO and Chairman of a company worth more than $7.5 billion today. Sometimes the worst moment of your life is leading to the best - if you are willing to meet the challenge, humbly, even when those around you might think you're crazy. 9. Recently unemployed, home foreclosed, wife left with the kids. Another father studied engineering through online courses and is now working at a dream come true job in aerospace! His kids are all grown-up, living their own lives and have benefitted from having a dad who loves them and is willing and able to fly across the country to celebrate the birth of their kids. 10. Avoiding layoffs: Taking a forced day off for the team. There is a city in Connecticut where the staff has volunteered to take one day off every two weeks to cut costs. This has reduced expenses across the board and prevented lay-offs. 11. The Currency of the Smile. Don't underestimate the value of your positive energy and willingness to give. Mario, a waiter at a restaurant that I frequent, gets free L.A. Laker seats, avocados and hands to move, while his colleague goes empty-handed. Learn more about the Currency of the Smile in my YouTube video. As Steve Jobs says, “You have to trust in something--your gut, destiny, life, karma, whatever--because believing that the dots will connect down the road will give you the confidence to follow your heart, even when it leads you off the well-worn path.” .
Share your story of Hope and your seeds of wisdom on the Sharing Wisdom bulletin board, under the topic, Solutions for the Financial Crisis. How are you turning today's crisis into a better tomorrow?
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The Top Twelve Investing Mistakes. by Natalie Pace.
So, let wisdom be your path to prosperity instead. The Top
Twelve Investing Mistakes
Mistake #2. Commission Based Brokers. They are paid to sell you things and most don't have the ability to offer you ETFs and no incentive to incorporate Modern Portfolio Theory. Commission-free brokers are paid for "assets under management," meaning they want to keep you happy. Ask how your investment professional is paid, and whether or not her company has contests on who the top salesperson is. Mistake # 3. Trading on Analyst Recommendations. Following analyst recommendations is a losing proposition. Researchers at the University of California and Stanford found that, in the year 2000, the stocks most highly rated by analysts lost 31 percent for the year. Even more incredible is this finding from the study: The stocks least favored by the major analysts soared 49 percent. This study examined 40,000 stock recommendations from 213 brokerages. This is mostly just a case of supply and demand, not dumb, corrupt analysts (though there are a few of those). Analysts are not all crooks, but they are definitely not fortune-tellers when it comes to returns. Mistake # 4. Bankruptcy Buying. Think buying General Motors at $2.25 a share is a great idea because even if they file Chapter 11, they will come out of bankruptcy? Guess again. Reorganization plans commonly call for the cancellation of the existing common stock, with holders receiving nothing. Nada. When the company emerges from bankruptcy, new stock is issued and the old stock becomes toilet paper. Lawsuits are a difficult and costly way to try to recover losses. Mistake # 5. Pet Rocks. It's very tempting to buy stock after shareholders have earned seven thousand times their investment, or real estate after the industry has posted intergalactic gains, but that is called chasing money. There were people, lots of them, who bought real estate at peak prices in 2005. Too bad losing weight isn't as easy as losing money. Mistake # 6. Hot Tips. Hot tips are often merely "Pump and Dump" or Ponzi schemes. Shysters and scam artists prey on you through this mechanism - from Madoff to the penny stock ads that you receive in your email. Beware these days of loan modification scams. If anyone demands money up front, money within 72 hours, money before you can do your due diligence, etc., just say no, even if they do hang out with Kevin Bacon (allegedly). Mistake # 7. Sure Shots. If someone promises to double your money in a set period of time, or to give you annual returns that are double or more of what the average person can achieve, assume that you're dealing with a novice or a scam artist. This tip ALONE would have saved you from Bernard Madoff. Even though he had a good pedigree on Wall Street (like other VIP scum bags before him), he was notorious for providing no backup documentation of how he achieved his astronomical gains. Beware anytime someone wants you to hand over money before you have a chance to read between the lines and look at the details of their business plan. Mistake # 8. Buying on Headlines. Headlines are written by editors to catch your eye. If you don't read the fine print, you could be missing the most important information, and sometimes the story itself is so poorly written that is little more than a company press release (see below for mistake #9). Stocks trading beneath their cash or other technical screens masked as headline stories rarely do the kind of forensic, investigative analysis required to determine if a stock is really a worthwhile investment. Mistake # 9. Press Releases. Press releases are written by professional writers, who are employed by the company they are writing about. A company can talk about an increase in revenue without ever mentioning that increased revenues don't mean the company is profitable or that, due to cash constraints, the company's fiscal health is on the ropes. If you read anything that is from PRNewsWire or BusinessWire - services that distribute press releases written by corporate PR people - ask yourself, "What aren't they telling me?" Press releases can have valuable data and information, but they are designed to give you a snapshot of something newsworthy, not to draw out the full picture. Press releases are all over the web these days and look quite a lot like articles, so be meticulous with determining the source of the writer. Mistake # 10. Placing all your chips on one sector. Diversify with Exchange Traded Funds so that you can see and capture your gains, with your semi-annual nest egg rebalancing! The former Blue Chip Index has become the Bailout Index, so it is more important that ever that you know what you hold in your ETFs. Mutual funds are too big to be diversified, which makes it impossible to know what you own and to take profits when one segment of the stock market - industry or size or style - has a rapid run-up in gains. Mistake # 11. Keeping too much stock in your employer's company. Rule of thumb, according to ERISA guidelines: no more than 10 percent of stock in your own company. There's one exception to this rule: if you're the owner of the company, you may need a dominating percentage of the stock for voting/power reasons. In the early days of Apple Computer, Steve Jobs was booted out of the company he had co-founded. Mistake # 12. Handing your investments over to a loved one, relative or friend. I've spoken with women executives who have commanded billion dollar corporations, and others who have multi-million dollar salaries, who turned over their personal investment portfolios to a husband, in order to make him feel like "more manly." With men, it's more likely to be the guy at the country club who convinces his poker partners to come in on a sure shot investment of his. Interview your Certified Financial life partner as if your life depends upon it, because your lifestyle does!
This is an excerpt from Put Your Money Where Your Heart Is by Natalie Pace. This book includes easy-to-read and implement pie chart strategies for Buying Your Own Island in your lifetime. No matter where you are in life or how much money you have, if you start investing now and increase your financial wisdom daily (starting by reading this book), you will become more rich and you will enrich the world in the process. Come to a retreat, if you wish to set up your nest egg with a prosperity strategy that works for the rest of your LIFE!
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Green: The Secret to Resurrecting Your Nest Egg in 2009. by Natalie Pace Date: January 27, 2009
In his first White House blog, dated January 24, 2009, President Obama wrote that his Recovery and Reinvestment Plan will "invest in our most important priorities like energy and education." The details of the plan, which President Obama is currently lobbying with Congressional members, is available online at WhiteHouse.gov and include the following target expenditures: Recovery
and Reinvestment Plan of 2009 Now, for those who are skeptical of Washington’s ability to get anything done before the next Ice Age, returns on green investing are not just dependent upon the President’s ability to win votes with Congress. There is a worldwide push for clean energy. In fact, Europe, Eastern Europe and China are far more proactive about greening their grid than the U.S. Germany was one of the first countries to embrace solar energy with its "family program." Solar panels were installed on many homes in that country over the last five years. Germany’s team, Technische Universität Darmstadt, even won the U.S. Department of Energy’s Solar Decathlon competition in 2007! The next Solar Decathlon will be held on the Washington Mall in Washington D.C. October 9 through 18, 2009, where 20 international teams will compete to design and build the most attractive, energy-efficient solar-powered house.
China launched a new clean energy initiative, "Electric Vehicles for Ten Cities," on January 6, 2009, which will put 1000 electric cars per year for three years in each of ten target cities. (Now if those were Tesla Roadsters, I might just move to one of those cities myself!) On Monday, January 26, 2009, the Chinese Academy of Sciences announced a plan to achieve solar energy as China’s dominant energy source by 2050. Other European and Eastern European countries are modeling Germany’s incentives to jumpstart their own clean energy plan and are committed to powering their grid with renewable energy with large-scale solar harvesting projects. Europe, Eastern Europe and China are the biggest clean energy customers to date, accounting for the strongest sales growth in any industry on Wall Street over the past three years. Solar giants, like Suntech Power Holdings, MEMC Electronics and LDK Solar are profitable, with a strong backlog of orders and high profit margins, at 12%, 20% and 24% respectively. MEMC Electronics (a silicon manufacturer) sales were $2 billion in 2008, up from $1.5 billion in 2006. Suntech’s 2008 sales were $1.8 billion, compared to $600 million in 2006. LDK Solar’s sales have exploded from $105 million in 2007 to a projected $750 million in 2008. On January 5, 2009, Xiaofeng Peng, Chairman and CEO of LDK Solar, reported, "Our operations remain at full capacity, with contract backlog remaining strong for 2009." The LDK Solar sales expectations for 2009 are $2.3 to $2.5 billion. So, while most industries worldwide are contracting, and many, like real estate and banks, are showing catastrophic losses, solar energy is profitable, growing – largely on worldwide government incentives and investment -- and healthy. Electric cars and component industries, like lithium ion battery makers, aren’t profitable yet, but the winds are favorable for growth and government incentives worldwide there as well. Lithium mining companies, like Sociedad Quimica y Minera de Chile (SQM), have strong backlogs, sales and profit margins, with relatively low debt. There is one trick to investing green, however. As I outline in my new book, Put Your Money Where Your Heart Is, the challenge of investing in an industry that is exploding with potential and new technology innovations, is that when innovation is occurring rapidly, it’s difficult to predict a clear winner because tomorrow’s invention could create a new breakout technology. Additionally, clean energy has been around since the 1970s and some legacy corporations are carrying too much debt to compete with the new stalwarts, many of which are based out of China. For these reasons, a clean energy Exchange Traded Fund (ETF), which owns a basket of clean energy companies, is a better policy for most investors than picking an individual stock. 4
Key Steps to Adding Green to your Healthy Recession-Proofed Nest
Egg: Check out the below pie chart for an example.
Remember to "overweight" 20% safe in 2009, since we’re in a recession, keeping 70% safe if you are 50, and 50% safe if you are 30, etc. For more nest egg strategies that work in bull and bear markets, buy and read my new book, Put Your Money Where Your Heart Is. Full Disclosure: I own positions in Suntech and LDK Solar. About
Natalie Pace: 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.
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by Natalie Pace, author of Put Your Money Where Your Heart Is. Includes my Hot News on Cool Stocks List. February 1, 2009 General Stock Market Performance
Same
old story. Same red flags as Enron. New Poster Child for Greed. Madoff’s hedge fund, like Enron before him, was one of the most highly respected companies in America prior to its demise. Madoff was on the board of NASDAQ. Enron won Fortune magazine’s Most Innovative Company award six years in a row and consistently topped analysts’ recommendation lists. Investors can swoon over a company’s grand achievements, invest manically in what they think is a once-in-a-lifetime opportunity, and end up bitter and broke from the whole sordid affair. This isn’t just a trap for the uber-wealthy. Everyday folk have plenty of stories of how they invested with this or that Certified Financial Planner (who was probably a rodeo rider or actor a few months back), who came recommended from a trustworthy friend, who ended up losing a lot of their money. (These shysters give the great, hard-working CFPs a bad name, just like Madoff, Lay and Skilling give visionary, ethical CEOs a bad rap.) The warning signs are the same for both traps – the trap of a major Wall Street player or just your local broker/salesperson – and are detailed extensively in the following chapters of my new book, Put Your Money Where Your Heart Is: "Brokers are Salespersons, Not Surgeons," "Lessons from Enron," and "Top 11 Investing Mistakes." So, how could you have sniffed out Madoff and how can you make sure that you are protected against shysters like him in the future? Below are a few very important tips to help you attract quality, experienced financial partners who keep abreast of the latest innovations, and avoid the salespersons who are really only interested in how they can line their wallets with your dough. Red Flag
#1: A company executive or money manager asks for blind faith. Madoff, like many hedge fund managers, closely guard their investments and their strategies and when they do provide reports, the reports may be quickly outdated because the nature of a hedge fund is "active management," meaning that the manager is paid to get in and out of deals to maximize Return On Investment. This is why some of the most respected economists in the world recommend that people steer clear of hedge funds altogether and instead take a long term strategy that protects their assets, while also providing upside potential. Dr. Gary Becker, Nobel Prize winning economist and professor at the Chicago Business School, writes: "I recommend buying a diversified portfolio of stocks and other assets that controls risk while providing decent returns. Some money managers may be able to beat that in the long run, but it is extremely difficult to discover who they are." Red Flag
#2: The company makes unreasonable growth claims. By the time a company is fat enough to attract $40 billion in revenue (Enron) or $50 billion in assets under management (Madoff), the market is well established, competitors have found a way to yank some of the customers to their corner, and the staff of inexperienced newbies has grown substantially. Madoff’s massive trading was a "market mover." His firm’s trading would have dramatically affected the price of the stocks he purchased and sold, making it even more difficult to achieve above average returns. The average returns on Wall Street for the last ten years have been less than zero, -0.6% according to Hulbert’s Financial Digest, while Madoff claimed to achieve returns above 12% with almost no losses. That was unlikely enough to compel a securities executive to alert the Securities and Exchange Commission as early as May of 1999 and to continue to hound them until the Madoff scheme was announced, almost a decade later, in 2008. In an anonymous document to the SEC, dated November 7, 2005, the complainant writes: "The key to a successful Ponzi Scheme is to promise lucrative returns but to do so in an unregulated area of the capital markets. Hedge funds are not due to fall under the SEC’s umbrella until February 2006." The document has 18 pages of argument, including returns of the funds, to support the complaint against Madoff Securities. After a decade of duping, it finally caught the Feds attention enough to pursue and press charges. Red Flag
#3: ACT NOW (in secret) It is not just hedge funds that wear a cloak of secrecy. A lot of annuities operate in the same manner – promising a guaranteed rate of return while keeping the investments and fund managers a secret from the investor. Secrecy is the hallmark of all kinds of scams, not just the largest Ponzi scheme uncovered to date – Bernard Madoff. Basically, if you have to write a check before you can "receive" your lottery winnings or get help with your foreclosures or those millions that need to be gotten out of Nigeria or Iraq, you’re likely looking at a fraud. If you are expected to hand your money over without properly evaluating what you’re investing in, you’re more vulnerable than you realize. Even if the person/company promises outstanding returns, legitimate looking documents and a guaranteed return. One of the most common scams in 2009 is the person who claims to be able to save your home from foreclosure. (If you need help, go to HopeNow.com, a government sponsored homeowner help agency.) This is the year that insurance companies, century-old brokerage houses and banks are failing. You’ve got to be VERY aware of where your money is and what it is being invested in. (The Dow Jones Industrial Average Blue Chip Index has become the Bailout Index, with some of the most unhealthy companies in the nation listed there, including Citigroup, Bank of America, General Motors and more.) Never ACT NOW before fully examining the pros and cons with your family and trusted advisors. The Bottom
Line: Three Takeaway
Tips 2. Secrecy is the hallmark of foul play. 3. The products and services of the corporation tell you a lot more about how well the company is doing than the awards that the company might be receiving or the Index it might be included in. If you don’t know what products and services your company is engaged in, then let Takeaway Tip #2 be your talisman and refuse to become involved until you get the information you require to make a reasonable, informed decision. Go to the NataliePace.com home page for a link to buy Put Your Money Where Your Heart Is on Amazon.com.
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. |
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Teaching Your Teens to Thrive by Natalie Pace. ...with Healthy Money Habits You Never Learned.
Since we’re not taught how to budget in high school or college, it really is up to you to teach your kids how to thrive, instead of merely surviving. Most people pay bills and then try to scrape a life together on what’s left over. This recipe for the rich life has you savoring life first -- before you pay the bills! Let’s say that your teen’s allowance is $100 a month… The
Thrive Budget: 50% to thrive and 50% to survive With electronic banking, this should be fun and easy to do each month! Essentially, you set it up once and then everything happens automatically.
The Thrive Budget is a great way to teach your kids healthy money habits, where the focus is on building a better life, rather than just paying bills. These budgeting strategies are explained in greater detail in Put Your Money Where Your Heart Is, my new book! Buy it now on Amazon.com, or in your favorite bookstore or website! Play the Billionaire Game and discover that it is possible right now to live as if you had all the money in the world (though, perhaps, on a smaller scale, initially). Subscriber
Feedback: What we’re doing with the Thrive budget is teaching the average person exactly what it takes to get ahead in life – to live like a billionaire. Self-made billionaires, like Steve Jobs, the co-founder of Apple Computer, understand the flow of money. They sleep on couches to launch their dream businesses. They sit on non-profit boards to meet the great minds and deep wallets who will invest in their dreams. They never overspend on basic needs or fleeting fantasies. So, tell your teen that this is Billionaire Boot Camp! S/he’s never going to get rich by burning through her dough and/or blowing her charitable contributions on movies. If s/he wants more money for fun, there is one easy way to do that while remaining in the dream come true life budget -- increase income. If her basic needs are out of whack – which is easy to do with high gas prices – there’s a solution for that – get creative with cutting back on basic needs spending! My teenage son discovered that he was spending over $50 a week on gas going to work and college. The second week, he bought a bike and pedaled around town for free. That was an instant reduction in basic needs! Get creative. Carpool. Take public transportation. Buy a hybrid or an electric car. Ride a bike. The best solution to a surly teen, however, is to start these money habits earlier – when they are in middle school. Teens are so busy trying to buy more freedom from you that they’ll forget to attack the family traditions that have been ingrained since elementary school. In other words, if you establish this thrive way of life early enough it becomes the norm — the natural way that things just are -- rather than something that the teen gets to argue with you about.
Natalie Pace knows what it's like to be flat broke and to work her way out of it. Now one of the premier financial pundits in America, she reports on the news, information and education you need to succeed at NataliePace.com. Her first book, Put Your Money Where Your Heart Is, is available now on your favorite bookselling website. Get more tips, news and information at NataliePace.com.
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Suffer-Purge-Recover-Better Than Ever! by Chellie Campbell, author of Zero to Zillionaire. "The
season of failure is the best time for sowing the seeds of success."
Well, there’s nothing like a bout of illness to get you to appreciate good health. And it gives you time that we don’t often take in our hurry-scurry lives - time to rest and reflect and reset our habits, intentions and goals. As I pondered my fate between groans, I saw that the cycle of learning is always the same – with the economy, with health, with relationships, with work. First
you Suffer: Got up to go to my niece Marissa’s fantastically fun "Fairy Party" for her little girl Kara Lynn, who turned one. All of us family and friends gathered ‘round for a backyard barbeque, piñata, presents, and a scrumptious cake made out of individual cupcakes all frosted together in beautiful hot-pink icing. But somebody had the stomach flu. Within 24 hours, ten people who had been at the party were throwing up. (And then the people who lived with them got it, so we know it wasn’t food poisoning.) Somehow, I escaped and didn’t catch it. Whew. I congratulated myself on my good fortune and joined the family for Thanksgiving dinner, love and blessings. Then
you Purge: I was a mess, I tell you, a complete mess. But I did manage, in a few lucid moments, to apply the Law of Attraction, and focus on radiant, glowing, life-affirming Health. I held to that vision and knew the only thing standing between me and that reality was Time. Next
you Recover: The
Opportunity to be "Better-Than-Ever": Relate
This to the Economy When the force of all the bad habits caught up with us and the economy got sick, there was a lot of pain and suffering. We’re in the purge cycle now, as failed institutions crash and burn, people lose homes and jobs, and retirement dreams recede. But it is bad habits that are dying here, creating the opening for better ones. Have faith – better days are coming! It may be winter now, but spring always comes again. We’re headed for recovery every day, and our best and brightest minds are working to facilitate it and choose better habits for the future. Cheer them on. Hang on. Help where you can. Give where you can. Believe in your bright future and see it as yours today. Keep a smile on your face, confidence in your step, and love in your heart. The fearful world needs joyous dolphins to light the way to love, peace, and prosperity. It is already yours. Love and blessings, Chellie As a professional speaker and author of The Wealthy Spirit and Zero to Zillionaire, Chellie has been teaching Financial Stress Reduction® Workshops since 1990. The Wealthy Spirit was a book-of-the-week on the Doctor Laura Schlessinger radio show and a GlobalNet book-of-the-month selection. She has been quoted in Good Housekeeping, Lifetime, Woman's World, and Essence, and more than 30 popular books. Chellie has also been responsible for helping countless people to increase the profitability of their businesses. If you are stuck having too much month at the end of your money, learn Chellie's time-proven strategies to success in her Financial Stress Reduction® Workshops. If you are interested in becoming a certified coach/owner in Chellie's workshop franchises, be sure to contact her right away. Space is limited. Go to Chellie.com for more information.
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by Natalie Pace. Q&A with Lawrence Yun, Chief Economist and Senior Vice President at the National Association of REALTORS®. Lawrence Yun is Chief Economist and Senior Vice President at the National Association of REALTORS®. He writes regular columns on real estate market trends, creates NAR’s forecasts, and participates in many economic forecasting panels, including Blue Chip and Harvard University Industrial Economist Council. Dr. Yun has been quoted on the real estate market and the economy in the mass media, including the Wall Street Journal, the New York Times, NataliePace.com and the Washington Post. He also appears regularly on CNBC and Bloomberg TV. Dr. Yun received his undergraduate degree from Purdue University and earned his Ph.D. from the University of Maryland at College Park.
Home sales for both existing and new homes rose in September. Inventory dropped a bit, though still remain elevated. Existing home sales were up in September from the same month a year ago. It was the first such year-over-year increase in nearly three years. It seems a little hard to imagine that sales are up when the headlines are screaming foreclosures, prices are falling and no credit is available. About 35% of current sales are related to people buying foreclosed homes or requiring short sales. Ah ha! So, it’s mainly smart buyers, who are out there getting deals. Are you optimistic about the increase in home sales? Foreclosure rates will continue to rise deep into 2009, but the bigger question is whether there are more buyers to easily absorb the foreclosed homes reaching the marketplace. Buying is most active in areas with significantly lower prices. Buyers are taking advantage of these lower prices. Homeowners are feeling the pain, but buyers are getting a great deal. What areas are the prices "significantly lower" and just how much lower are they this year, than say, three years ago at the high? California, Florida, Nevada and Arizona are states with much lower home prices and these are the areas where we are seeing a strong return of homebuyers. What’s your economic prediction going forward? Have we hit the bottom yet? We are in a recession. The question is over whether we will have a short mild one or a deep prolonged one. That depends on whether the housing market can recover. The economy will not recover without a housing market recovery. Note from Natalie: Wow, an economist who is honest about the "r" word! When I used that word back in February, people came out of the woodwork to remind me that we have to have two quarters of negative GDP growth (even though we had two quarters of .9% and .6% wink wink). Thanks for the honesty. So far, we have not had two quarters of GDP contraction. However, a third quarter GDP is due tomorrow and it will be negative, and the fourth quarter will also be a negative in my prediction. How do you know that foreclosure rates will continue to rise? Do you have the statistics on distressed homeowners who are ready to fold? Foreclosures generally lag other housing indicators. Given that larger numbers of homeowners are underwater, some of these people will choose to foreclose if facing mortgage payment difficulty. Also job losses from recession will force additional people to foreclose. Do you think the Hope Now Alliance will do a good job of keeping homeowners in their homes? Hope Now claims it has modified up to 2.5 million loans in the past year. That is sizable, though I do not know to what extent the loans are being modified. Generally, modified loans are less costly for lenders than having to go through foreclosures. Note from Natalie: So, if we have any distressed homeowners reading, at minimum, that statistic of 2.5 million loans getting modified with the help of Hope Now is a good enough reason to log onto HOPENOW.com and find out how that agency can assist you through troubled times. What areas are experiencing the greatest reduction in home values? Riverside, California, Sacramento, California, Bakersfield, California, Ft. Myers, Florida, Phoenix, Arizona, Las Vegas, Nevada, DC suburbs are some key areas that have experienced sizable declines in prices. Some neighborhoods have seen prices drop to the tune of 40%. Many in excess of 20%. And then we have areas in Michigan, right? What other states are having trouble more as a result of the economic downturn (job losses) hitting their town hard? The industrial Midwest is also hard hit. Michigan has lost jobs for seven straight years and is still shedding jobs to this day. It is a very difficult environment for housing or for any business when job losses pile on this high. Very difficult indeed. There was a headline that someone couldn’t sell her home for a dollar in Detroit. Very sad. But there is a lot of manufacturing infrastructure and talent there and hopefully, there will be an industry that can come in and rebuild. The right business climate will lead to smart people creating new businesses and hiring people. I have a couple of houses in the San Diego area that are underwater and that don’t have cash flow. Do you have any suggestions on how to get out of this mess? There is less help for investor property owners. But National Association of Realtors pushed for a higher loan limit so Fannie and Freddie can buy more loans in high cost areas like San Diego. Buyers returning to the market will help stabilize home prices. Many California markets are now seeing inventory conditions returning close to historical normal. That correlates to about 3-5% home price appreciation a year. Now, let’s say the San Diego real estate investor wants to try and survive. How long will he need to hang on? Perhaps this isn’t your area, but with more people coming on the market to rent, do you think he might get some relief with rental prices coming up a bit? (I know a Malibu homeowner who is supplementing her income by renting her home for weddings and vacation rentals.) San Diego is a pretty desirable vacation destination, if the locations of his particular property are good. The long-term outlook for San Diego is bright. Baby boomers – the wealthy ones – will seek out good climate areas as they retire. That’s good to hear. I just need a way to hang on until the market turns. The short-term concerns are over buyer hesitancy and how to absorb and limit foreclosed homes reaching the marketplace. Currently, what are some stable markets for real estate investors? I see price gains in Denver, Dallas and Houston. I also like affordable places like Indianapolis, Cincinnati and Pittsburgh, if jobs come around in these markets. There is more risk in California, Nevada and Arizona, but the long-term fundamentals are solid. Dr. Yun, one thing you mentioned was "more traditional" housing returns. What is the statistical annual return of housing? It was crazy 2002-2005 and it seems a lot of newbie real estate investors thought that increasing 20%+ per year was average… Normal returns have been 1-3 percentage points above consumer price inflation. Inflation runs about 3% per year, so home prices generally rise 4-6% per year. I know you are housing more than stocks, but just how bad do you think investors will react to the negative GDP numbers on Thursday and how will the stock market reaction to that affect housing over the next 6-12 months? The recession for the U.S. and the world economy is already priced into the stock market. I believe if we have a short recession, we could see respectable gains in the stock market because corporate profits are running about double the rate of what it was in 2000. You indicated there are housing indicators that help to determine whether foreclosures will continue to rise in a community/state, etc. What are the real determinants of whether your city is ready to recover and move forward, is experiencing a "boom/bust" or is headed for a prolonged and painful period of slow growth? Housing indicators on vacancy rates showed steady conditions in the third quarter. It is still high, but no longer rising. Also, new home inventory has fallen sharply because builders have cut back production. We are moving in the right direction in controlling inventory. There is still more risk because of foreclosures. But if you can pick up properties at "bargain" prices, then the risk is minimized. Sometimes people forget about the Big Kahuna challenges of real estate, like high cost to carry, illiquid, natural disasters (drought and earthquakes in California and Nevada and hurricanes in Florida). Can you speak just a little bit to that? Even with "insurance" you have higher insurance costs in riskier areas and people in New Orleans were being denied claims because the "flooding" when the levies failed was not covered. (Only wind damage from the hurricane was.) This was eventually challenged in court, but it took years and in the meantime, many people lost their homes and were unable to hang on long enough to rebuild. Florida is hampered with high insurance costs related to hurricanes. So many second homeowners could not carry the cost of mortgages and insurance and put their homes on the market. If the insurance cost falls, then home prices will pick up. It is an inverse relationship. What have we learned from the real estate bubble and what lessons can real estate investors now carry as their wisdom talisman going forward? Any time there are strange new behaviors – watch out! No income/no document loans – that is a clear warning sign. People buying with the intention of selling in a month or two. That is not normal and suggests exuberance and the "finding of the next fool." Abnormal new trends = be very cautious. I know one investor who was saved because she refused to lie and say she would be living in the home. Any last words of wisdom? Real estate has proven to be a solid long-term investment for homeowners and investors. Short-term is always a difficult call. But long-term returns have been consistently solid. With that in mind, best of luck, everyone.
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Treasury's Guarantee Program for Money Market Mutual Funds: ...What You Should Know. Investor Alert from FINRA.org (the Financial Industry Regulatory Authority)
We are issuing this Alert to help investors better understand money market funds and to answer some of the questions investors may have about Treasury's guarantee program. What
are money market funds? The federal securities laws set limits on the types of investments a money market fund can make. Money market funds have traditionally attracted investors seeking to preserve their principal or who need a short-term place to invest their cash. As with any securities investment, investing in money market funds involves risk—and while rare, investor losses are possible. In contrast to bank money market deposit accounts and other bank savings accounts, money market funds are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration. However, as explained below, for an initial three-month period, money market funds can participate in a guarantee program offered by Treasury that will insure assets held in money market mutual funds as of September 19, 2008. What
does it mean to "break the buck"? A money market fund is said to "break the buck" when its NAV falls below $1.00 per share. In the nearly 40-year history of money market mutual funds, this has happened on only two occasions—in 1994, when a fund lost approximately four cents on the dollar, and in September 2008, when the NAVs of money market funds issued by The Reserve Fund fell below $1.00. Typically, there has been an expectation that when a money market fund reaches a point where it might break the buck, the investment management firm that sponsors the fund will take action to infuse the fund with cash so that the fund can maintain a stable NAV of $1.00 per share. Most money market funds in the U.S. are sponsored by large financial institutions that may provide assistance in the case of instability. What
is Treasury's Guarantee Program? The program will insure shareholder assets in participating money market funds as of the close of business on September 19. In other words, if a money market fund that participates in the guarantee program subsequently fails to maintain a stable $1.00 NAV, the program will provide coverage to shareholders up to the amount they owned on the date the program was announced. This action is intended to enhance market confidence and alleviate investors' concerns about the ability of money market funds to absorb a loss. Investors cannot sign up for the guarantee program on their own. Instead, each money market fund must decide whether to participate in the program—and, if so, must [have applied] by October 8, 2008. You can find out whether a money market fund participates in program by contacting the fund directly or checking their Web sites. In
addition, you should be aware of the following features of the guarantee
program: -- Let's say you owned 200 shares of ABC money market fund on Sept 19 and bought 100 more on September 30. Let's also assume the fund is participating in the guarantee program and breaks the buck on October 10. Under the guarantee program, you would receive a guaranteed $1.00 per share for the 200 shares you owned on September 19--but your remaining 100 shares would be redeemed at NAV. -- Now let's say you owned 200 shares of ABC on September 19, sold 100 on September 22, and purchased 50 on September 30. If the fund breaks the buck on October 10, all 150 of your shares would be covered under the guarantee program-even though some of those shares were purchased after September 19. As long as it remains in effect, the guarantee program will protect your investment in ABC up to the amount you held as of September 19. 2. Tax Issues—Participation in the program by a tax-exempt money market fund will not jeopardize the tax-exempt status treatment of payments. The Treasury and the IRS have issued guidance confirming this point. 3. Duration—Initially, the program will be in effect for three months, beginning September 19, 2008. After three months, the Secretary of the Treasury will assess the program, including whether to extend it (up to September 18, 2009). The bottom line is that whatever amounts you held in a participating money market fund as of September 19 will be protected under Treasury's guarantee program for as long as the program remains in effect. For more information, see Treasury's Fads. Information
for Reserve Fund Shareholders In the meantime, investors who need cash but cannot access their holdings in the affected funds should understand their alternatives. These include awaiting implementation of the Reserve's liquidation and distribution plan, liquidating other investments, or arranging for a loan from their broker (which might require signing a margin agreement). Each of these choices has consequences that investors should carefully consider before acting. Where
to Turn for Help ADDITIONAL
RESOURCES To receive the latest Investor Alerts and other important investor information, sign up for Investor News.
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Get Rich and Enrich Workshop Truly Makes a Splash in Santa Monica ... for Sixty Plus Lucky People (Including Lucky Me)! by Shelley Silver Whizin. 11/23/08.
Santa Monica, CA. Yep, Natalie has done it again! She has taken sixty people on a journey of showing them how to save their financial "ass-ets" during this "recession". Natalie is probably one of the smartest, most intuitive investigative financial journalists in today's economic community (not just my opinion). She tells it like it really is, without the hype. No wonder she has been a number one stock picker for some time. Natalie has a sure grasp on the stock market, the economy in general, and knows excellent ways to hedge bets in the "worst possible financial climate". "In today's economy, NOT LOSING IS WINNING," Natalie emphasizes. "These are very different times. We cannot do things in the same way we always have, nor can we look at the stock market the same. The markets return 12% a year in the past, but for the last ten years, only 4% per year, only slightly above the returns of Treasury bills at 3.3% (with almost no risk)." In Natalie’s model, however, investors are able to capture their gains, rely on a blueprint that is appropriate to their age and always keep a percent equal to their age safe. In fact, her strategies are "enthusiastically" recommended by Nobel Laureate winning economist, Dr. Gary Becker, a professor at the University of Chicago. Despite the blue chip endorsement, Natalie’s goal is to make investing as much fun as shopping and to get rich while enriching the world – to enjoy life, know what you own in your retirement plan and make the world around you more beautiful in the process. Sixty of us were sitting in the room at the beautifully remodeled Sheraton Delfina Hotel in Santa Monica. Nine of us were volunteers, assisting the participants in Natalie's amazing process of teaching subjects on (to name a few):
Natalie revealed one of her jewels: "Look at your investments like a pie, " she explained. "Make sure that whatever age you are, have that amount invested in "safe" financial instruments, then add another twenty percent to the "safe" category just during this recessionary time. You can re-allocate it later when the tide turns. Cash is king and you’ll be in the best seat for returns going forward if you protect and diversify now." Sound advice for sure. This is one smart, beautiful woman. Her words rang true in everyone's ears. I have to admit, as I sat in the room, I observed everyone's faces and energy (I'm like that woman on Star Trek that senses emotions). A light kept clicking on in each person's eyes at different times. I could almost "hear" them saying, "Wow, I get it. I understand what I need to do. I am so relieved." Yes, we were given a LOT of valuable information to take in. Yes, it all seemed overwhelming at first (especially for the first timers, like myself in the previous workshop...I was like a deer caught in headlights). But, more importantly, everyone KNEW they were taking control of their own financial futures...standing up and taking charge, one by one. It was wonderful to witness. For some participants, it was an eye opening, heart-awakening experience. For others, it was a matter of fine-tuning the knowledge base they walked in with...leaving with a more in-depth understanding of their own circumstances and WHAT TO DO about their financial circumstances. This was no ordinary "dry" financial three-day workshop. This "Get Rich and Enrich Retreat" was a spiritually-infused, heart-warming, intuitive rally...raising everyone's consciousness to their own endless possibilities. Natalie does not "just" cover statistics, nor does she "just" teach the language of the stock market industry. Natalie does much more. She gets to the HEART of WHY we want to make money in the first place from a soul perspective (my favorite motivating factor, by the way). And, she presents analogies of those models who have MADE billions of dollars, like Bill Gates, Steve Jobs, Warren Buffet and Oprah Winfrey. She created and offered a brilliant process, called the "BILLIONAIRE GAME", designed to challenge us to think BIGGER...to expand our level of awareness and to literally step out of our comfort zone into a world maybe we never took the time to IMAGINE. So, ask yourself this question: "How would you live if you had all the money in the world?" When we got back in the room, Natalie showed us that by stepping into that picture we envisioned today we don't have to wait until we "make all that money"...We just have to live it NOW and scale it back. Simple and profound? Absolutely. (And believe me, "stuff" came up for everyone, especially for those who believe that it's not okay to "make money." Natalie calls these people the "philanthropist mentality"). Let me tell you, "stuff" really did come up (even for me, who was facilitating my group. Thank you guys for creating such a safe environment to reveal each other's deepest unspoken thoughts). For lucky me, by volunteering my time, I got to help others learn Natalie's systems, (which as you all know, is the best way of learning and reinforcing something yourself). I shared with everyone what a great mentor of mine once told me years ago, that "an expert is someone who knows just a little bit more than someone else." We all laughed at that one. Then throughout the seminar, when everyone broke up into partners to do STOCK REPORT CARDS, each person helped another and they instantly became "experts". You could feel the joyous energy in the room. Each day we walked away with precious gems from the mine of Natalie's brain. We were given the resources for finding particular pertinent information online. (Thank God for computers, we all had our laptops and information was simply a "click" away. What did we ever do before laptops? Well, that's another story). Anyway, we were taught how to navigate the Internet for those resources she gave us and how to use her brilliantly conceived (and user-friendly) website to access the information necessary to learn about the companies we were researching for our stock report cards. Offering simple recipes, Natalie has a way of getting to the point and sharing her philosophy of investing: Always
Remember: 2. Pick the leader in the sector. (In real estate, it’s location, location, location!) 3. Buy low and sell high. (This sounds obvious, but knowing when the low is low and the high is the high is another story). So, the "RICH AND ENRICH RETREAT" is over and we are fully equipped to know what to do and how to do it with regards to our investments and in addition, what we have walked away with is the knowledge that living a life of BEING ENRICHED starts NOW. No one has to "wait" until they manifest ooh-gobs of money (and maybe you don't even want ooh-gobs of money, that's not the point). Just playing the "Billionaire Game" gave us the tools of imagining ourselves with all the money in the world and what it feels like to live the life of BEING ENRICHED RIGHT NOW! I think I can speak on behalf of all the participants, we are ENRICHED, feel GRATEFUL and look FORWARD to making our lives even better than they are now. I would highly recommend that EVERYONE sign up for her next retreat in February. (Details are posted on the home page at NataliePace.com under the Get Rich and Enrich Retreat banner ad). Only twelve (12) people will be allowed to attend. And believe me, if you are one of the lucky twelve, you will thank your lucky stars that you signed up and attended. Save your "ass-ets" NOW before you watch your boat sink to the bottom with the low tide. I'm sure glad I attended. It has changed the way I THINK about my finances and how I can truly make a difference in our world of TOMORROW. Thanks Natalie!
Shelley Silver Whizin is an "Eclectic Renaissance Woman." She has training as a certified yoga teacher, as well as a master results coach, and NLP practitioner. While her background is as a marketing designer Shelley is a professional speaker and trainer bringing illumination to those looking for success in the arenas of health, finance and relationships. Shelley has traveled worldwide and studied a multitude of cultures and traditions, and as a result she has always felt naturally inspired successfully imparting spirituality and integrating the spiritual substance of life—the soul of living—into the personal and professional lives of those she touches. Her aspirations include creating a non-profit organization acknowledging those who actively do something to make a difference in this world.
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VISION: To build
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1.
Work only with a nonprofit, HUD-approved counselor.
It
was during his couch-surfing days that Steve Jobs learned some of
the coolest applications on the Apple computer, such as the beauty
of calligraphy, which led to Apple's mastery of font styles.
Investing
mistakes are easy to fall into because it's what everyone else is
doing and it feels like a time-saver. In fact, these common mistakes
are not time savers at all. They are money losers, stomach acid
burners and often even relationship hell!
Did
you know that clean energy was the top performing industry in 2007,
returning almost sixty cents on the dollar for investors? That was
almost double the returns of the 2nd highest performing
industry -- oil and gas -- at 32 cents for each dollar invested.
And, thanks to President Obama’s American Reinvestment and Recovery
Plan, clean energy is poised to be the top performer again in 2009.
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How
everyday investors can avoid shysters and scam artists.
Whether
you are a billionaire, a thousandaire or a widow with only one mite,
when you are buried in basic needs, you are not living a very rich
life. The trouble is: how do you escape the rut of basic needs when
most of your income is eaten up by housing and transportation and
you’re always running out of money before the end of the month!
Is
there any good news in Real Estate today?
Money
market mutual funds play an important role in America's financial
markets, offering a relatively lower-risk alternative for investors
who seek stability and liquidity. Recent market events put a spotlight
on the money market fund industry—including the U.S. Treasury Department's
announcements on September 19 and 29, 2008, of a temporary guarantee
program for the money market fund industry. In creating the guarantee
program, Treasury seeks to address temporary dislocations in the
credit markets.
WOW!
That about sums it up. 