Let There Be Light (Emitting Diodes)

by Natalie Pace.

2010 Company of the Year.

Includes a LED Stock Report Card.

In 2009, Applied Materials was in trouble. Sales were down by 36%. The company posted a net loss of $133 million, compared to net income of $373 million the year prior. Other CEOs might have "weathered the storm" as best as possible until the economic weather changed, but Applied Material’s chairman, president and CEO Mike Splinter had a better plan. In a statement to the press, Mike Splinter promised, "We acted early and decisively to reduce costs... With our leading technology and strong balance sheet, Applied is positioned to weather this recession and invest in new products and services." And a year later, Mr. Splinter has already made good on his promise.

Applied Materials enhanced their product line to include solar energy nanomanufacturing, just at the moment that stimulus funding was becoming accessible to clean energy companies. This market edge in clean energy products quickly added up, and today Applied Materials is back on top of Wall Street, with 90% growth in revenue, $123 million in net income and a big footprint in yet another fast growing marketplace – LEDs (Light Emitting Diodes).

On January 25, 2010, the Department of Energy announced that Applied Materials would receive a $3.9 million grant toward LED manufacturing improvements. LEDs are now used to light-up new laptops, LCD TVs and are even used in the daylight running lights on the latest Nissan, Audi and Porsche cars. But this is still an early stage industry. According to Applied Materials’ Pat Lamey (in a blog from July 2010), "Today’s [LED] manufacturing process is still essentially an ‘art form’, which is too expensive and unpredictable to produce at an appropriate price for commercial success. Some of the challenges are in gas-phase chemistry control, chamber cleanliness, dopant profiles, particulate management, control of thermal cycles and gas flow signatures." (Mr. Lamey heads up strategic marketing and new business development for the Energy and Environmental Solutions (EES) group at Applied.)

Secretary of Energy Steven Chu cuts the ribbon at the U.S. Department of Energy Solar Decathlon 2009 on Oct. 08, 2009. Directly to Secretary Chu’s left is Mike Splinter, CEO of Applied Materials.

Vice President Joe Biden and Department of Energy Secretary Steven Chu tour the Cree laboratory in Durham, North Carolina.

You wouldn’t know there were any behind the scenes challenges for "commercial success" if you were looking at the stock page of another LED company, Cree, a supplier of LED lighting products to consumers and municipalities. Cree’s earnings are some of the brightest on Wall Street, at 59% earnings growth, with a healthy profit margin of 19.58%. And, like Applied Materials, CREE boasts the support and backing of the chief executive team of the United States. This year, Cree also received a $3.7 million Department of Energy grant. 

Anyone who has experienced the subtle, long lasting light of the new white LEDs easily understands that this industry is the next great innovation. LEDs are cleaner and more efficient than CFL or incandescent light bulbs. And with a marketplace as widespread as shampoo and toilet paper, the growth includes the entire developed world.

So what is impeding wide-scale adoption?
Cree’s recent alliance between their LED City Program and the DOE’s Municipal Solid-State Lighting Consortium should push progress forward, but, without attractive government incentives or all-out funding, wide-scale adoption is likely years away in the United States. A handful of cities have switched to LEDs for public streets and areas, including Raleigh, Toronto, Anchorage, Boston, Austin and Huntington Beach, California. However, with city officials wracked with budget constraints and wrangling down costs for police officers, firemen and other emergency services, replacing the light bulbs is not receiving the high priority that the DOE and CREE might desire – at least here in the U.S. U.S. consumers are in a similar waste-tightening position, and few are leaping out of their wallets to purchase a $30 bulb that lasts 50,000 hours when they can purchase a 70 cent light bulb that lasts 5000 hours. Yes, a chart may show that the energy savings adds up in 12,000 hours, but right here and now, it’s 70 cents versus $30.

Currently, 81% of Cree’s revenue is derived abroad, with China buying 40% of Cree’s product. Likewise, Applied Materials sells almost 80% of its products to Asia, with only 13% of sales derived in North America (primarily the United States), and the rest coming from Europe. These distinctions may seem microscopic, but in the world of emerging markets, making sure you’re in good hands and that there is a buying hand across the table is essential. Government incentives and funding are also key. Which is why the management teams at Cree and Applied Materials, with some of the world’s most experienced, well-connected board directors in technology, add an extra layer of protection to the risk of investing in an early stage industry.

Another appealing aspect of Applied Materials is the company’s revenue diversification, which is spread across Silicon Systems Group (solar industry), Applied Global Services (services and software for factory efficiency), Display (flat panels for TV and computer) and Energy and Environmental Solutions (LEDs and other clean technology). By diversifying their product offering to include both emerging and well-developed industries, Applied Materials is positioned to remain profitable, healthy and visionary, even in rough waters.

In fact, the Energy and Environmental Solutions division is the only cash negative business at Applied Materials. At Cree, LED is the only business.

There are several Applied Materials competitors that received DOE funding in 2010 to further develop LED manufacturing processes, including KLA-Tencor (symbol: KLAC) and Veeco (symbol: VECO). KLA-Tencor is a respected nanotechnology company with a strong board and leadership. Where Veeco lacks the big name board credentials, it makes up in big sales, with 370% earnings growth in the last quarter. Click here to view a LED Stock Report Card.

Another nanotech company in this space, Kulicke and Soffa (symbol: KLIC), was passed over by the DOE, but remains popular with investors, trading 2 million shares per day, on average. Kulicke and Soffa is in the process of moving their headquarters from Pennsylvania to Singapore, under the leadership of a new CEO and CFO. The company recently provided massive downward earnings guidance. The earnings in the most recent quarter topped $259 million, but the next quarter will only see $125-$135 million in sales, according to Bruno Guilmart, Kulicke and Soffa’s new President and Chief Executive Officer (a haircut of almost 50%). Insiders, including the CEO and CFO, have been selling shares en masse. And the company website has a number of links that go to error pages. All this adds up to too many red flags for me to want to jump in and swim to Singapore with KLIC.

The next decade could well be the LED Decade and Applied Materials is positioned to be the company that gets us there, with its superior nanotechnology products. So, let there be light! Applied Materials is my 2010 Company of the Year. Click here to view a LED Stock Report Card.

I added Applied Materials to my Hot News on Cool Stocks List today. Kulicke & Soffa was moved to the Cooling Off List. Cree, KLA Tencor and Veeco remain on the Watch List. While I am impressed with the potential of all three companies, I prefer to be a patient about purchasing them at a lower price.

About Natalie Pace:
Natalie Pace is the author of You Vs. Wall Street and host of the Pace and Prosperity radio show on BlogTalkRadio.com/NataliePace. She is a repeat guest on Fox News, CNBC, ABC-TV and a contributor to HuffingtonPost.com, Forbes.com, Sohu.com and BestEverYou.com. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on http://www.facebook.com/pages/NWPace, and on YouTube.com/NataliePaceDOTCOM. For more information please visit, http://www.nataliepace.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 all in on any asset class or individual stocks. 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.  

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.

Smart Gift Giving on Any Budget.

by Staff.

Including No Budget. And That Person Who Already Has Everything.

This holiday season everyone is on a budget. A recent survey showed that over half of Americans are spending less than last year. But love is just as rich as ever. So, how do you express appreciation for those special people in your life without getting buried in debt? Below are great gifts for any budget, from the Rich at Heart to the Just Plain Rich.

For other tips on what s/he really wants this year, check out our survey page, where readers are voting for the Best Gift this holiday season.

Rich at Heart (But on a Budget)
There is always something to give, and often the gift that isn’t "store bought," is the one most treasured.

1. Gift: You. There is something that you do better than anyone else you know. So, why not gift a free certificate to those you most love? Gift Certificates for massages, babysitting, cooking classes, interior design, landscape design, moving, His Favorite Meal, A Day Doing Whatever You Desire… All of these can be the spark that creates one of the most memorable moments in life.

2. Host a party. One holiday party can be a lot less expense than individual gifts. And if throwing a party is too much time, money or trouble, host a potluck with a theme! A friend of mine hosts Potluck Yoga parties. He doesn’t have to cook, clean or even lead the yoga session. And since the yoga instructor is paid by donation, even that is covered by the guests.

3. Clap & Celebrate. It was inspirational to see Jamie Lee Curtis at Dancing With the Stars each week supporting her friend Jennifer Grey during her quest to win the mirror ball trophy. Jennifer was stunning, so agile, making 50 look like the new 20! But, given her injuries and challenges, having a friend there clapping and cheering and celebrating each milestone was powerful fuel to keep her pushing on. This holiday season, give more clapping and celebrating. Showing up is one of the greatest gifts that we give our friends.

4. Share Secrets. Are you the envy of the neighborhood for your dinners, cakes, cookies? Why not host a cooking class? Or write a booklet of gardening tips, interior design strategies, songs, poems and/or recipes? This might become a keepsake for generations…

5. Buried Treasure. Sometimes lean years are the inspiration for raiding the long, forgotten safe deposit box. Do you have a keepsake or collectible to gift to your children? (Prince William just gave his fiancée Kate Middleton the engagement ring that belonged to his mother, Princess Diana.)

6. Family Memorabilia. Shutterfly, Snapfish and Kodak make it affordable to turn favorite pictures into coffee mugs, photo albums and even wall art. One of the funniest (and free) gifts I've seen is an Elf Yourself video that my niece created of her family. What fun! Takes time, but, thanks to Office Max, costs zero out of pocket expense.

Thriving: Shopping within Reason
In the event that you have enough money for gift buying, chances are you know what you want to gift. However, below are few novel, nouveau rich and nice ideas that might not have crossed your mind.

1. Novel: If you are inspired by the incredible rescue of the 33 miners in Chile on October 12, 2010, you can literally own a piece of it.  CafePress.com is printing the phrase, "Estamos bien in el refugio los 33" on everything imaginable -- from tee-shirts and flags to boxers, coffee mugs, baby blankets and stickers.  Sales go to the author of the phrase (and copyright holder), Chilean miner Jose Ojeda.

2. Nouveau Riche: Priceline’s Name Your Own Price is my favorite not-so-secret tip. Each day is a new opportunity to stay in a five-star resort at three star prices. If you’re thinking of a get-away, check it out! I found Expedia to be more helpful when traveling abroad. And it’s worth checking out Orbitz as well.

3. Ferraris and other Collectibles. With so many people struggling financially, non-essential items are being sold off for a song. So, if you’ve always wanted to own a collectible car, now may be the best time ever. I know more than one person who is liquidating a vintage Ferrari in excellent condition for less money than you are spending on a new car. Your favorite online site will have a few Ferarris to choose from, if you want to buy direct from the owner. Ferrari lists pre-owned, guaranteed cars on their website at Ferrari.com.

4. Nice: Stocks & Dependent IRAs. One holiday, after years of toys and game systems, I decided to give my son a dependent IRA (Individual Retirement Account). He got to choose where to invest the money, and he chose to invest in U.S. Gold. Since U.S. Gold has gained 12X, you can imagine how beloved this gift has become!

Just Plain Rich
Wonder what to give those who have everything? Below are a few exclusive experiences that even royalty might be pleasantly surprised by.

1. Get Rich Retreat. You can get smart and have a once in a lifetime vacation, when you give the gift of financial literacy and attend the NataliePace.com Get Rich and Enrich Retreat, located in the sunny beach town of Santa Monica, California. In fact, a high percentage of Get Rich and Enrich Retreat attendees love it so much that they return again and again. Some very smart, dedicated investors volunteer at almost every retreat! Why? Because playing the Billionaire Game on the Beach, learning easy-as-a-pie chart and Stocks on Steroids investing strategies in a boardroom with just a dozen other people and having one-on-one access to Natalie Pace for three full days is life transforming. Walk in without a clue or with a cracked nest egg. Walk out with an investing plan for stocks, bonds, real estate, gold, income property, budgeting and much more that will work for the rest of your life. Holiday with a kick of wisdom!

2. Necker Nymph. Be the first kid on the block to try out the new Necker Nymph. Two passengers sit on either side of the captain of a 3-person aero submarine. The Necker Nymph is available when booking a stay on Necker Island or during the winter months when hiring the exclusive catamaran Necker Belle. Necker Island is Sir Richard Branson’s "home and favorite hideaway," located in the Virgin Islands. Pricey, but unforgettable…

3. Shopping trip to Italy. If you really want to experience something extra special, try a shopping trip to Italy. While you’re there, you’ll find some amazing ruins to see as well! Travel light, so that you have plenty of room to fill up your suitcase with new clothes, purchased at some of the finest shops in the world. Be sure to sample gelato at Giolitti in Roma! Don’t miss L’Opera in Verona, where you’ll sit in an ancient Roman Coliseum and listen to the songs of the gods under the stars. To plan the trip of a lifetime, be sure to check out all of the articles on Italy, from the August 2009 NataliePace.com ezine, volume 6, iss. 8.

20 Questions: Investor IQ Test.

by Natalie Pace.

Photo by: Stacie Isabella Turk. Ribbonhead.com. Stylist: Melody White. Art Direction: Arlene Hylton-Campbell.

Do you think you’re a rock star investor? A complete novice? Check your Investor IQ in the quiz below.

1. What is the average return of stocks over the last 30 years?
   
   
2. What is the average return of stocks over the last 10 years?
   
   
3. What is the average return of gold over the last 30 years?
   
   
4. What is the average return of gold over the last 10 years?
   
   
5. What is the average return of real estate over the last 30 years?
   
   
6. What is the average return of real estate over the last 10 years?



7. What was the top performing investment in 2009?
   
   
8. How long will it take for you to have a nest egg as big as your annual salary if you put 10% of your income into a Buy My Own Island Fund and invest in stocks?
   
   
9. How long will it take for your nest egg to earn more than you earn, if you you put 10% of your income into a Buy My Own Island Fund and invest in stocks?
   
   
10. What’s the better investment strategy, Dollar Cost Averaging, Buy and Hold, or Modern Portfolio Theory with annual rebalancing? Why or why not?
    
    
11. Which countries hold the most gold?
    
    
12. How long did gold remain over $800/ounce between 1980 and 2006?
    
    
13. What was the average price of gold between 1980 and 2002?
    
    
14. What’s safe and how much of your Buy My Own Island Fund should be allocated there?
    
    
15. What is the 3-Ingredient Recipe for Cooking up Profits?
    
    
16. What are the Four Questions for Picking Winning Stocks?
    
    
17. What was the top performing month for stocks in 2009?
    
    
18. What was the top performing quarter (3 months) in 2009?
    
    
19. What earned more in 2009, NASDAQ, gold, the Dow Jones Industrial Average or high yield bonds?
    
    
20. Which year is expected to perform better, 2010 or 2011, based upon historical returns of election years?

Answers are listed at the end of this ezine.

About Natalie Pace:
Natalie Pace is the author of You Vs. Wall Street and host of the Pace and Prosperity radio show on BlogTalkRadio.com/NataliePace. She is a repeat guest on Fox News, CNBC, ABC-TV and a contributor to HuffingtonPost.com, Forbes.com, Sohu.com and BestEverYou.com. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on http://www.facebook.com/pages/NWPace, and on YouTube.com/NataliePaceDOTCOM. For more information please visit, http://www.nataliepace.com.

Rebecca’s Mentoring Journey:

by Rebecca Searleman.

Keeping Things Conversational and Sharing Personal Challenges.

Rebecca Searleman.

Rebecca Searleman is a mentor with the Global Give Back Circle, a nonprofit organization founded by Managing Director Linda Lockhart. The Global Give Back Circle (GGBC) is an Empowerment and Enablement Process whereby disadvantaged girls are guided, inspired, encouraged and motivated through a Mentoring Model and Methodology that facilitates Gratitude, Goals and Giving Back. Kenya's GGBC connects over 300 disadvantaged girls to mentors from nine different countries, including Kenya. Through a structured Five-Phase Mentoring Process, that includes Workshops, Journaling, Letter Writing and Personal Visits, the girls are guided to articulate their goals and dreams and supported to make them realities.

Elizabeth's first letter was truly amazing: I expected a bare minimum sort of document, particularly since she was writing to a complete stranger.  Instead, Elizabeth wrote about her goals to go to university and become a journalist, and confessed her struggles with math. Reflecting her interest in journalism, that first letter included descriptions of the political campaigns in Kenya, which would haunt me months later when Kenya was gripped with horrific post-election violence.  I was stunned to have been connected with a mentee who enjoyed writing as much as I do, and who at 15 already had a conversational tone in her letters.

Keeping things conversational is what I have strived for in my mentoring of Elizabeth.  I respond to her letters as quickly as I can; when life prevents that, I re-read her most recent letters to ensure that I answered every one of her questions and followed-up on any questions I had for her. Because I'm an executive with ten direct reports I frequently write to Elizabeth about the challenges and achievements of my work team, drawing lessons from my work that will apply to her studies and extracurricular activities.  Even though you may think that your life is completely alien to a Kenyan student, it isn't difficult to identify situations in your own life that can illustrate behaviors that will help your mentee develop as a student and as a young woman, without seeming to lecture.

Finding common ground with Elizabeth happened during our second letter cycle due to the passing of my father. Because she had lost her own father when she was very young, Elizabeth comforted me and for the next few letters, it was almost as if she was mentoring me through my loss. That taught me to identify experiences in my own life that could be relevant to her.             

I have helped Elizabeth overcome her hatred of math, and to understand that in so many fields, math is a key metric in decision-making. Recently, Elizabeth won a math prize, and has been tutoring younger students as part of her give back commitment. I have coached Elizabeth to get over her anxiety about taking tests by sharing my way of viewing tests as challenging and a fun game that you play with the test writer.  Now that Elizabeth is near the end of high school, we have been writing about life after school.  She still hopes more than anything to go to university (a wish I profoundly share!), and develop a fulfilling career.

Rebecca Searleman is an executive at Macy's in NYC.  She started mentoring Elizabeth Kwamboka during her first year in high school.  Today, Elizabeth is a member of the graduating class of 2010 and she recently learned she is part of a MasterCard Foundation Scholarship Grant that will enable her to attend the 9-month Microsoft ICT Course in 2011.

Visit the GlobalGiveBackCircle.org website to sponsor and/or mentor a young woman in Kenya to become financially and socially independent.

Appreciation.

by Alvin Tam.

Alvin Tam.

Lynn Twist, in her presentation about her book called The Soul of Money, said "that which you appreciate, appreciates." When things are tough, like your bank account, or losing a job, or facing rising costs, it’s easy to fall into a mindset of scarcity, the idea that there’s simply not enough to go around. Lynn talks about how this mentality drives us into hoarding, competition, and fear.

I remember the times I had to audition for a show – and I never had a feeling of competition. It wasn’t because I didn’t care to succeed – it was simply because I knew that I would do my best, and if they picked me it was because I was right for the job. If they didn’t, then I knew my skills would be better in another project.

I thought this way because I didn’t know any better – for those of you who don’t know my background, I started acrobatics when I was 19, with zero knowledge of the performing circus world. In other words, I just went out there and had fun, and anything that came my way, I was grateful for. Ironically, I got everything I needed, though not everything I wanted (or thought I wanted).

Which brings me back to Lynn’s words: that which you appreciate, appreciates. If you focus on what you are or have, she says, it will expand. Christmas is a funny time of year – a time of giving, sharing – but suddenly what happens when you don’t get that gift you wanted? What happens if plans change and the family doesn’t get together (or worse, gets together!)? The heavily accented mood of this holiday emphasizes everything you get and don’t get.

My suggestion to you in the next few days… find the simplest thing you can appreciate and spend a minute saying a prayer, meditating on your gratitude, or acknowledging it in your own way. It could be something you overlook daily, like the car you drive, the roof over your head, the computer you read this blog on… Here is one thing we all have to be grateful for absolutely: the fact that you breathe and can read this letter. Cheers to that!

Merry Christmas,

Alvin.

Bio
Alvin Tam is the founder of Soul Acrobats®, an inspirational products company and Acrofit™, an acrobatic fitness system. He has over 15 years of experience as a circus artist, stuntman, dancer, actor, and coach and has performed for Cirque du Soleil, Notre Dame de Paris, and appeared on CSI. Alvin’s passion is to inspire you to achieve your impossible.

Products
Visit: http://www.soulacrobats.com/products-page/

BOOK: The Art of Impossible

DVD: The Acrofit System Level 1, Expressive Yoga for the Soul

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From Flipping Burgers to Buying Your Own Island.

by Natalie Pace.

Investing Pays Better Than Any Job – When You Get Smart About It.

Photo by: Stacie Isabella Turk. Ribbonhead.com. Stylist: Melody White. Art Direction: Arlene Hylton-Campbell.

Most people spend hundreds of thousands learning how to earn income and zero learning how to invest. And they wonder why they are easy prey for scam artists (like Bernie Madoff) and high-risk investments that have a high likelihood of costing you an arm and a leg (like options and day-trading)! According to the Forex website, 95% of daytraders lose their money! However, when you get smart and invest wisely, your nest egg can earn a lot more than you do – far faster than you think.

If you earn $100,000 a year and you put 10% of your take-home in a 401K, IRA and/or health savings account, and that money earns 10% annually (what stocks and bonds have done over the last 30 years, on average), then you'll have $50,000 in your nest egg within four years, over $100,000 in seven years and by year 25, your money will earn as much as you do in your annual salary. That alone will make you a millionaire before you’re 50 (if you start at 25).

See below for a breakdown of how that happens.

Investing Vs. Savings Chart
Based on Depositing $10,000 each year (10% of $100,000 annual salary). And Making 10% return (on average) annually

Now, you might say, "I don’t earn $100,000 a year!" But the ratios work the same, even if you earn minimum wage. If you deposit 10% and that earns 10% returns, then your nest egg will equal your salary in just seven years, and by year 25, your nest egg will earn as much as you do. By comparison, if you are just saving, you only earn a fraction of that – missing out on all of the gains that compound year after year. And if you’re not saving at all, you’re probably overspending and in debt.

Over the last decade, stocks have been pretty rough sailing – for buy and hold investors. But investors that diversify properly and use annual or quarterly rebalancing, are earning far more than 10% annually -- while they sleep.

Another beautiful benefit of the tax-protected retirement plan (IRAs, 401Ks, HSAs, etc.) is that your investment gains are yours to keep, and are not subject to capital gains taxes. These accounts are also the best strategy to keep your money safe from debt collectors, lawsuits and other financial predators because in the worst case scenario (legal judgment, bankruptcy or debt collection) they cannot be confiscated by lien.

The most important first steps to take are to open the account, put 10% of your income on auto-deposit and to switch your thinking about money. Which is why I’m encouraging you to toss out the phrase "retirement plan" and select a sexier name for your personalized "Buy My Own Island Plan" or "Send My Kid to College Fund" or "Trip Around the World Dream." Why? Because you’ll want to grow the gains of the fund that is working toward a goal, whereas, odds are, you’re filing the "retirement plan" statements directly in some drawer without looking at them, hoping they’ll surprise you one day -- pleasantly. That is, if you have even bothered to sign up for the 401 (k), IRA or HSA in the first place.

From burgers on the grill to burgers on the beach! Get started now, and before you know it, you’ll arrive.

For more information on easy-as-a-pie chart investing, read You Vs. Wall Street. To learn these nest egg strategies firsthand in a boardroom setting, come to a Get Rich and Enrich Retreat. Get more information on the home page at NataliePace.com.

About Natalie Pace:
Natalie Pace is the author of You Vs. Wall Street and host of the Pace and Prosperity radio show on BlogTalkRadio.com/NataliePace. She is a repeat guest on Fox News, CNBC, ABC-TV and a contributor to HuffingtonPost.com, Forbes.com, Sohu.com and BestEverYou.com. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on http://www.facebook.com/pages/NWPace, and on YouTube.com/NataliePaceDOTCOM. For more information please visit, http://www.nataliepace.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 all in on any asset class or individual stocks. 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.  

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.

Don’t Rob From IRA to Pay Paul.

by Natalie Pace.

Dear Natalie: I’m drowning in credit card debt. My credit card company just increased my interest rates to 28%. I’m struggling to make mortgage payments because the loan reset to five times what I was paying. The only good news is that I’m rich in retirement assets. Should I drain my IRA to pay off my credit card debt and get caught up on the mortgage, so I don’t lose my home?

Yours truly,

Rob IRA to Pay Paul…

Dear IRA,

Even without knowing all of your circumstance, it’s easy to see a few things. Your income and overhead are completely out of whack, and until that gets fixed, anything you do, including draining your IRA, will only be a temporary fix. Trying to duck tape your roof is a poor strategy when every day is a rainy day.

One of the most important considerations is that your retirement account is yours to keep no matter what, so draining your retirement account should always be the last resort. The Supreme Court has upheld that IRAs are exempt from bankruptcies, so, in the worst case scenario, if you have to declare personal bankruptcy or give your home back, your IRA, 401K and other qualified retirement accounts may be the only assets you walk away with. If those accounts have enough money in them, it’s possible that you’ll be able to borrow from them to buy a new home, in a neighborhood that is more affordable for your current lifestyle. You won’t be able to get a decent loan from a bank if your home forecloses or if you declare bankruptcy, so those accounts could be your lifeline!

What you need now more than ever is to rethink your entire game plan. Is it time to downsize your home? Can you get a loan modification and then lease your place to cover the mortgage? Should you set up house in a new home in a more affordable neighborhood or city? (Vegas and Florida are downright cheap these days!) Can you purchase a health savings account, instead of paying so much in premiums to the insurance company? What changes can you make to reduce the cost of surviving to less than 50% of your income? This usually requires big ticket changes, like your home, car and/or insurance premiums. FYI: Be careful of short sales because they come with phantom taxable income and the write-off is being resold to debt collectors, who will hound you to repay them.

If the problem is income, is it time to relocate to a place where the job prospects are better? Do you need to learn a new skill or trade? Is your small business paying you less than your employees? Did you fall for a get rich quick scheme?

Call your creditors now and commit to a payment plan for the next three months that is doable for you, while you figure out how to increase your income and decrease your expenses to a more healthy ratio – where bills are taking up 50% or less of what you make. Always put your agreement with the debt collection agency in writing, and include a letter documenting the agreement with each payment you make.

Debt obsession leads to more debt. Healthy savings habits lead to more assets. Place yourself first, not the debt collectors and not the banksters, for it is you, not the debt collectors, who must be capable of earning the income and living within a Thrive Budget to get ahead of the debt. And with the usury rates of 28%, the only way you will ever get out of debt is through careful strategy, wise investments and increased assets -- not draining all of your assets to buy yourself a few months. Being religious about paying 10% of your income to your tax-protected (and debt collection protected) retirement account (IRA, 401K, etc.) even now is an important way of increasing your net worth, which allows you to pay down your debt more quickly, on better terms.

Be resilient and hang onto every asset that you can, even while you act honorably and quickly to achieve a sustainable, thriving lifestyle and to resolve the situation with those whom you owe money to.

About Natalie Pace:
Natalie Pace is the author of You Vs. Wall Street and host of the Pace and Prosperity radio show on BlogTalkRadio.com/NataliePace. She is a repeat guest on Fox News, CNBC, ABC-TV and a contributor to HuffingtonPost.com, Forbes.com, Sohu.com and BestEverYou.com. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on http://www.facebook.com/pages/NWPace, and on YouTube.com/NataliePaceDOTCOM. For more information please visit, http://www.nataliepace.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 all in on any asset class or individual stocks. 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.  

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.

An Economic Growth and Deficit Reduction Agenda for Congress and the President.

by Dr. Gary S. Becker.

Gary Becker.

In a wide-ranging interview in the Wall Street Journal published on March 27, 2010, I indicated that the American people were unhappy with the state of the economy, wanted greater economic growth and more limited government, and that they would vote that way in November. Indeed, voters did give President Obama a real "shellacking" (to use his words), as Republicans gained control of the House of Representatives and the governorships of most states, and made large gains in the Senate. The common expectation is that this division will produce a political stalemate, as both parties position themselves for the presidential election in 2012. Yet, the American people need an agenda to raise the growth rate of the American economy, and cut sharply actual and future fiscal deficits. If these happen, not only would unemployment and other short-term problems be taken care of, but also optimism would return about the longer-term prospects of the United States.

What follows is a partial agenda to raise economic growth and reduce the long run fiscal deficit. The most important step in raising the growth rate is not to increase but rather to lower taxes on capital and entrepreneurship. This implies maintaining essentially all the Bush tax cuts, including those on capital gains and dividends, and those on incomes at all levels, including quite high incomes. The estate tax on very high levels of wealth could be reinstated if politically necessary, but it will only bring in a very small amount of tax revenue, and will be more costly than it is worth. Tax reform also implies a reduction in the corporate income tax, and especially reductions in taxes on incomes of small businesses. Successful small businesses that grow to become large companies, such as Wal-Mart, Starbucks, Microsoft, and Apple, form the foundation of the American economy. They should be strongly encouraged.

One goal of such tax reform is to eliminate, as much as possible, taxes on capital since economic theory basically implies that economic efficiency requires that capital not be taxed in the long run. For the supply of capital in the long run is highly responsive to after-tax rates of return on capital.

Modern economies are based on the command of knowledge and information. Since knowledge is created by basic and applied research, the United States should increase the share of its GDP that is spent on R&D, a share that has been stable at a little more than 2.5%. The patent system encourages applied research, but basic research, in medicine and other fields, is not patentable, so it needs, and has received, an extra push through subsidies.  While most basic research projects fail, the successes often bring enormous benefits to society. Neither bureaucrats nor scientists can predict in advance which projects will succeed and which will fail, so it is important to encourage a broad peer-reviewed approach to basic research topics and investigators.

I do not have space in this brief comment to discuss many other policies beyond taxation that are needed to speed up significantly the growth rate of an advanced country like the United States. These include a quite free approach to international trade, encouragement of immigration, especially skilled and ambitious immigrants, flexible labor and product markets, and limited regulation of most economic activities.

Since the tax cuts and subsidies I advocate will tend to reduce tax revenue, it is especially important to control government spending and the fiscal deficit. I will concentrate on the two main entitlement programs, old age retirement support and medical spending. Together they take about 45% of the total federal budget, and unless reformed, will be even more important in the future.

The drain of social security benefits on the federal budget can be reduced relatively easily. The best approach is to change from a pay as you go system to a defined contribution system. Barring such a drastic change, it would help a lot to continue to extend the retirement age for healthy men and women until it reaches age 70. Older persons live longer and in better health than their predecessors, yet social security systems have been slow in all countries in adapting retirement ages to these health improvements of the elderly.

Controlling spending on medical care is much more challenging, and requires radical changes in the present health care delivery system. The health care law passed this spring (so-called Obama Care) made matters worse rather than better, for reasons partly discussed in my post "The Health Care Bill: Progress or Retrogression?" (3/28/10). I will not repeat all the arguments in that post, and concentrate on only two major defects of both the old and new laws. Out of pocket expenses by individuals receiving care should be much higher in the United States than its average level of about 12% of medical spending. If the American system can move even half way towards the Swiss level of an out of pocket share of over 30%, substantial savings in medical spending would occur in ways that would reflect patients’ evaluations of how much the care is worth to them. In addition, the American system should be weaned from being mainly tax-deductible employer based health insurance to a more desirable system, where individuals and families can buy insurance in other ways on the same after tax terms as from employers.

Significantly reforming entitlements would greatly slow down the rate of growth in federal government spending. Despite what some elected Republican officials are saying, politically it will be impossible to actually cut government spending. However, overall cuts in federal spending are not necessary to get the main fiscal problems under control, and to reduce the effective relative size of government, as long as the economy grows significantly faster than government spending does. Speeding up the growth rate of the economy, and slowing down significantly the growth rate of federal spending, would accomplish these goals.

Are these changes likely during the next few years? I am optimistic about the tax cuts, and about extending the age of eligibility on access to social security benefits. Medical care will continue to be a tough nut to crack, but the recently expressed opposition by American voters to the new health care law might help push health reforms in the right direction.

About Gary Becker:
Dr. Gary Becker is a University Professor, Department of Economics, and Sociology Professor, Graduate School of Business, The University of Chicago. He won the Nobel Prize in Economics in 1992 for his groundbreaking work in "human capital." President George W. Bush awarded him the Presidential Medal of Freedom in 2007.

To keep track of Dr. Becker's continuing research and commentary, visit his website and blog.

Woe to the Bond Investor.

by Dr. Marc Miles.

The Fed’s decision to resume large-scale purchases of Treasuries is just the next step in what I fear is a road to significant inflation.  More and more the current situation reminds me of the 1970s when Nixon abandoned the dollar’s tie to gold and Jimmy Carter topped that off by "talking down" the dollar.  The reason for breaking the link to gold was the enormous debt financing the Viet Nam War, and the realization by other countries that the US would therefore not be able to stand behind its commitments.  With the enormous increase in debt over the past couple of years, combined with the oncoming train of unfunded liabilities for Social Security, Medicare, and now ObamaCare, history is repeating itself.  All signs point toward a significant drop in the dollar’s value and the accompanying dollar inflation.

The incentives of the government are unfortunately to make this scenario come true.  The Congressional Budget Office estimates that by 2020, just based on current budget projections, U.S. government debt will be almost 90% of GDP. 

Source: The National Commission on Fiscal Responsibility and Reform
These projections assume that annual growth over this period is 3-3.5%, an unlikely scenario.  With growth more likely averaging 2-2.5%, those debt estimates balloon.  Add to that the unfunded liabilities mentioned above, plus the unfunded liabilities at the state and local level.  Unfunded state pensions are estimated to be about $3 trillion dollars.  Of course that is also an underestimate because the state pensions assume 7-8% returns each year.  We should all be so lucky.  The outlook for local pension shortfalls is even lower.  Add to that the fact that states like California, Arizona, Nevada, New Jersey and New York are already near default, and you can quickly see how dire the situation is.

Allowing the dollar to depreciate reduces the purchasing power value of debt repayment.  In other words, the government will be giving back to bondholders a smaller purchasing power than received when the debt was issued.  As the dollar falls, not only other governments, but the private market will diversify their money holdings away from dollars, putting more downward pressure on the dollar.  (Just look at what happened in 1978-79.)   No wonder OPEC is considering pricing in a currency basket.  They know if they keep the price in dollars they stand to sell their commodity oil for smaller and smaller purchasing power.  Diversifying means that the price of oil can rise without the politically difficult announcements of higher and higher dollar oil prices. 

Given the recent decline in the dollar, we should expect consumer inflation to pick up within 9-12 months.  With the Fed loosening its backing for the dollar, watch that inflation rate continue to climb.  We could easily see inflation at 5% or more.  Woe to the person who continues to hold bonds in this period.

About Dr. Marc Miles
Marc Miles is the former Editor of the annual Heritage Foundation/Wall Street Journal Index of Economic Freedom.  Prior to that he spent almost 20 years advising large institutional money managers on changing trends in the U.S. and global markets.  He holds B.A., M.A., and Ph.D. degrees from the University of Chicago and a M.Sc. degree from the London School of Economics.

Can You Still Retire?

by Rande Spiegelman, CPA, CFP®, Vice President of Financial Planning, Schwab Center for Financial Research.

Updated October 20, 2010

Rande Spiegelman, CPA, CFP®, Vice President of Financial Planning, Schwab Center for Financial Research.

During the past decade, two severe bear markets have taken their toll on even the most-well-built retirement portfolios, leaving many people wondering what to do. Here, we attempt to answer some of your most pressing questions about retirement savings.

I'm facing hard times. Should I tap into my 401(k)?
Doing so should be an absolute last resort, as it'll end up costing you. If you're under age 59½, you'll pay a 10% federal penalty and income taxes on the withdrawal (state taxes and penalties may also apply), and you'll give up potential compound growth. So please explore other options—such as reducing your expenses, finding a second job, and getting help from family or friends—before tapping your retirement plan.

Borrowing from your 401(k) is a second-to-last option. Keep in mind, if you take out a loan from your 401(k), you'll have to pay the loan back with after-tax dollars. And if you leave your job, your loan balance will be due when you leave.

My portfolio keeps losing money. Can I still retire as planned?
A good place to start is our Retirement Assessment tool. By entering an estimate of your portfolio value and other information, you can find out the likelihood that you'll be able to sustain your desired spending throughout your retirement.

If you're not quite there, don't panic. Think about trimming expenses, increasing savings, and/or delaying or easing more slowly into retirement. Your retirement decision is ultimately about what you want and what you can pay for. The best approach is to analyze the situation and adjust as needed. But act soon—small changes now work out better than being forced to make big adjustments later.

Given the market's moves, should I change my investment mix?
Avoid changing your long-term portfolio asset allocation because of short-term market behavior. Unless you've just realized that you're not as risk-tolerant as you thought, now is not the time to abandon your long-term plan. It is a good time, however, to think about rebalancing your mix of stocks and bonds to your long-term target allocation—for instance, if your portfolio originally was 60% stocks/40% bonds, but has shifted to 40% stocks/60% bonds because of the market (see Build Your Retirement Portfolio to Last).

I sold my stocks because I was nervous. When should I reinvest?
If you got that nervous, consider whether you belong in the stock market at all and, if so, to what extent. If you can tolerate a minimum amount of risk, you should have at least 20% of your portfolio in stocks as an inflation hedge. Consider gradually reinvesting that money over the next year. That way, you'll ease into the market without the regret of being too early or too late with a lump sum.

As a retiree, how big of a cash cushion should I have?
Set aside enough cash to cover your routine expenses for one year (minus what you expect from reliable non-portfolio sources of income, such as Social Security). Keep that money in a relatively safe place, such as a savings account. Or consider investing some of your cash in a money-market fund or short-term certificate of deposit (CD).

You should also think about keeping an additional two to four years' worth of portfolio spending in high-quality short-term instruments as part of your fixed-income allocation. That way, in the event of a long bear market, you can cash them out instead of selling stocks or longer-term bonds at the worst possible time.

How much can I safely withdraw during retirement?
We believe a good rule of thumb is to withdraw 4% of your portfolio in the first year of retirement, and increase that dollar amount every year by the rate of inflation. That way, we estimate a conservative-to-moderate portfolio has a 90% chance of lasting for 30 years. The 4% rule assumes there will be bear markets along the way—that's why it's the 4% rule and not the 10% rule.

Theoretically, you should still be able to withdraw your inflation-adjusted amount at a 90% confidence level. Of course, in the real world, it's still a good idea to stay flexible. During adverse market periods like the downturn earlier this year, you might want to take out only enough to cover non-discretionary expenses—or at least forego the annual inflation increase on your withdrawal amount (see Write Your Own Retirement Paycheck).

Can I count on dividends going forward?
The average dividend yield on the S&P 500® Index is currently around 2%. So if you see a stock that's paying an unusually high dividend rate, remember that you normally don't get extraordinary yield without increased risk.

In this environment, return of investment is as important as return on investment, so beware of chasing yield. If you seek dividend-paying stocks, we recommend focusing on stocks that are rated highly by Schwab Equity Ratings®. For mutual funds, clients can check out Schwab's Mutual Fund OneSource Select List®.

Either way, consider a total return approach—that is, combining dividends, interest and share sales for income (see Generating Cash Flow From Your Retirement Portfolio).

Important Disclosures
Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges and expenses. You can request a prospectus by calling Schwab at 800-435-4000. Please read the prospectus carefully before investing.

Charles Schwab & Co., Inc. member SIPC, receives remuneration from fund companies participating in the Mutual Fund OneSource™ service for record keeping and shareholder services and other administrative services. Schwab also may receive remuneration from transaction fee fund companies for certain administrative services..

Schwab Equity Ratings are assigned to approximately 3,000 of the largest (by market capitalization) U.S.-headquartered stocks using a scale of A, B, C, D and F. Schwab's outlook is that A-rated stocks, on average, will strongly outperform, and F-rated stocks, on average, will strongly underperform the equities market over the next 12 months. Schwab Equity Ratings are not personal recommendations for any particular investor. Before buying, investors should consider whether the investment is suitable for themselves and their portfolio.

The S&P 500® index is an index of widely traded stocks.

Indexes are unmanaged, do not incur fees or expenses and cannot be invested in directly.

This report is for informational purposes only and is not an offer, solicitation or recommendation that any particular investor should purchase or sell any particular security or pursue a particular investment strategy. All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Past results are not indicative of future performance. Examples provided are for illustrative purposes only and are not representative of intended results that a client should expect to achieve.

This information is not intended to be a substitute for specific individualized tax, legal or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends consultation with a qualified tax advisor, CPA, financial planner or investment manager.

The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.

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Inflation is Here.

by Natalie Pace.

Cotton Prices Soar
Buy your cotton tee shirts, underwear, pajamas and button down shirts now – before the soaring cotton prices hit your local store. Cotton prices have almost doubled, popping from 66.82 cents/pound a year ago to 126.5 in October 2010, which means you may have a hard time finding quality cotton clothing at a reasonable price in the near future.

So what else should you be buying besides PJs and undies?

Is this the beginning of inflation?
The floods in Pakistan and "bad weather" in China and India are blamed for sparking inflation in cotton prices, but other countries are concerned that inflation, in general, is on the horizon. Gold is at an all-time high. Oil prices are over $80/barrel, while gasoline is $4.00/gallon at the pump in California. Consumer goods and real estate prices continue to weaken, however, almost all natural resources and commodities, including corn and cotton, are increasing at an aggressive pace.

On October 19, 2010, China shocked investors worldwide by raising interest rates. The People’s Bank of China said the one-year lending rate in renminbi would rise from 5.31 per cent to 5.56 per cent. This was the first increase since December 2007. Commodity prices, including gold, dropped (slightly) after the announcement, only to rally back up to the annual high by December.

Deflation, Inflation: Which One Is It?
So how is it that deflation is still the talk du jour at recent U.S. Federal Open Market Committee meetings? High commodity prices, like oil, gas, copper and gold, have almost become the "new normal," while the value of the dollar continues to weaken, along with consumer buying power. Retail stores have been having fire sales to keep the lights on. The Fed’s response to this was to begin purchasing $600 billion of longer-term Treasury securities, now through the end of the second quarter of 2011, at a pace of about $75 billion per month.

What’s likely to happen as a result of massive buying of long-term Treasury bills? The Feds hope more Americans will move off of the sidelines into stocks (since T-bills will be yielding nothing) and that banks, with their coffers brimming with money, will start lending again. However, Dr. Gary Becker thinks those scenarios are unlikely. Banks continue to hoard their money (which is putting the brakes on the economy). Investors remain risk-averse to the market. And, as Dr. Becker writes it in his blog, "this perception of a risky investment environment will not change because the Fed creates large quantities of additional reserves."

Finally, the binge of bond buying is weighing heavy on the U.S. dollar, lowering its value even further. This makes U.S. exports more attractive to the worldwide marketplace, however U.S. currency is also starting to look more vulnerable to current holders of U.S. treasuries. OPEC has already announced that they have adopted a "new long-term strategy," which is speculated to include moving away from U.S. dollar benchmarks to a basket of currencies. The details of the new OPEC strategy will be announced on December 11, 2010. We can only hope that the FOMC move will not become a very expensive short-term fix.

In response to the devaluation of paper, the gold bugs have come out in full force and you can’t turn on the television without seeing an ad to buy gold. But should you? While some speculate that gold prices will continue to rise -- U.S. Gold Chairman and CEO has been quoted that gold will hit $5000/ounce before it retreats -- there is more risk and less reward in buying today (at an all-time high) than investors realize. In 2009, small and mid cap stocks, large cap value stocks, NASDAQ stocks, high yield bonds, Latin America funds, Australia funds, technology companies and more all made higher gains than gold – by quite a lot. Only the debt-laden Dow performed worse.

Performance of Stocks and Gold in 2009

Source: 2010 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

To read a complete breakdown and analysis of gold, check out my article, "The Gold Crash of 1980," from volume 7, issue 9.

So, how can you protect yourself from inflation?
Modern Portfolio Theory, avoiding the Bailout companies, adding in four hot industries, quarterly rebalancing and shifting out of paper and into hard assets for safety and as a hedge against inflation are all important. Below is a breakdown of a pie chart, but your best move right now is to get smart, get a plan and stop relying on blind faith in a broker (salesman) as your primary wealth building strategy. Over the last three years, broker-associate exodus and turnover has been at an all-time high, so if you walk into a retail brokerage, chances are that the face greeting you is fairly new to the game.

Get Smart Now
Call 866-476-7442 and reserve your seat now at the February 5-7, 2011 Get Rich and Enrich Retreat. Walk in without a clue and walk out with an investment strategy that works for stocks, bonds, real estate, income property and gold, through bull and bear markets, for the rest of your life. Get more information on the home page at NataliePace.com. Remember that Early Bird pricing ends December 15, 2010. Early Bird registrants will also receive two Free Gifts, valued at over $1000. Call 866-476-7442 now to learn more.

About Natalie Pace:
Natalie Pace is the author of You Vs. Wall Street and host of the Pace and Prosperity radio show on BlogTalkRadio.com/NataliePace. She is a repeat guest on Fox News, CNBC, ABC-TV and a contributor to HuffingtonPost.com, Forbes.com, Sohu.com and BestEverYou.com. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on http://www.facebook.com/pages/NWPace, and on YouTube.com/NataliePaceDOTCOM. For more information please visit, http://www.nataliepace.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 all in on any asset class or individual stocks. 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.  

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.

20 Answers: Investor IQ Test.

by Natalie Pace.

Below are the answers to the IQ Test located in a separate article at the top of the ezine.

1. What is the average return of stocks over the last 30 years?

The S&P 500 earned 11.23% annually over the last 30 years (1979-2009), while small cap stocks posted gains of 12.32% annually.

2. What is the average return of stocks over the last 10 years?

The S&P 500 lost 1% annually over the last 10 years (1999-2009), while small cap stocks posted gains of 6.3% annually.

3. What is the average return of gold over the last 30 years?

Gold’s luster was lacking, with gains of 2.33% annually over the last 30 years (1979-2009).

4. What is the average return of gold over the last 10 years?

Gold glistened with gains of 13.59% annually over the last 10 years (1999-2009).

5. What is the average return of real estate over the last 30 years?

Real estate scored 4.4% annually over the last 30 years (1979-2009).

6. What is the average return of real estate over the last 10 years?

Even with the subprime crisis and the thermonuclear housing meltdown, real estate scored 5.7% annually over the last 10 years (1999-2009), meaning the correction hasn’t fallen (yet) to meet the average annual trend line.

7. What was the top performing investment in 2009?

Latin America stock funds were the top performer. These funds more than doubled in value in 2009, with gains of 115.54%. For more information, please read the article, "Latin America Funds Doubled," from the NataliePace.com ezine, vol. 7, issue 8.

8. How long will it take for you to have a nest egg as big as your annual salary if you put 10% of your income into a Buy My Own Island Fund and invest in stocks?

7 years. For more information, please read the article, "From Flipping Burgers to Buying My Own Island," from the NataliePace.com ezine, vol. 7, issue 12.

9. How long will it take for your nest egg to earn more than you do each year, if you you put 10% of your income into a Buy My Own Island Fund and invest in stocks?

 25 years. For more information, please read the article, "From Flipping Burgers to Buying My Own Island," from the NataliePace.com ezine, vol. 7, issue 12.

10. What’s the better investment strategy, Dollar Cost Averaging, Buy and Hold, or Modern Portfolio Theory with annual rebalancing? Why or why not?

Modern Portfolio Theory with annual rebalancing because Buy and Hold doesn’t work in a slow growth economy – even if you are dollar cost averaging. When you have a Buy and Hold strategy, then you are not benefitting from emerging markets (that change annually), limiting exposure to declining markets (that change annually), finetuning your "safe" allocations (that change annually), capturing your gains (annually). Buy and Hold investors lost money over the last decade, while Modern Portfolio Theory investors who rebalanced annually, adding in 4 hot funds and limiting their exposure to the Bailout Index, are earning more than 10% annually – topping Wall Street!

For more information, read You Vs. Wall Street. Using my easy-as-a-pie chart nest egg strategies and Stocks on Steroids plan, you should be Buying Your Own Island in no time.

11. Which countries hold the most gold?

The U.S., Germany, International Monetary Fund, Italy, France, gold ETFs, China, Switzerland, Japan, Russia, the Netherlands, India and the European Central Bank (in that order). For more information, please read the article, "The Gold Crash of 1980," from the NataliePace.com ezine, vol. 7, issue 9.

12. How long did gold remain over $800/ounce between 1980 and 2006?

2 days. For more information, please read the article, "The Gold Crash of 1980," from the NataliePace.com ezine, vol. 7, issue 9.

13. What was the average price of gold between 1981 and 2003?

$250-$400/ounce. For more information, please read the article, "The Gold Crash of 1980," from the NataliePace.com ezine, vol. 7, issue 9.

14. What’s safe and how much of your Buy My Own Island Fund should be allocated there?

Cash positive hard assets are safe (think income property that is well-insured). FDIC insured money market accounts, Certificates of Deposit and savings accounts are safe. Bonds and Treasury bills are safe most of the time, but are extremely vulnerable right now. When interest rates rise and legacy corporations are defaulting and going into Chapter 11 (meaning your bond is wallpaper) and the Federal Reserve is the only buyer of our Treasury bills and commodity prices are through the roof, hard assets are better than paper. Meaning that the "safe" portion of your nest egg should make a great downpayment on an underpriced, quality investment that you can touch and feel.

Always keep a percentage equal to your age safe. Overweight an additional 10-20% safe in a recession. For more information, please read the articles,

"Bond Beautification Project," from the NataliePace.com ezine, vol. 7, issue 10.
"Bonds, Bond Funds and T-Bills: The Next Disaster." from the NataliePace.com ezine, vol. 7, issue 9.
"Don't Get Fooled Again," from the NataliePace.com ezine, vol. 7, issue 8.

15. What is the 3-Ingredient Recipe for Cooking up Profits?
    
    The Three-Ingredient Recipe for Cooking Up Profits.
    1.) Start with what you know and love
    2.) Pick the Leader
    3.) Buy low; sell high (easy to say; hard to do)
    
    This is a chapter out of my book, You Vs. Wall Street. There are a lot of important details that will help you get these ingredients right. For instance, the Stock Report Card and Four Questions for Picking Winning Stocks, will help you to determine the Leader (ingredient #2). The seasonal, annual and election year trends also help to determine the right buying and selling prices. For more information, read You Vs. Wall Street.
    
    
16. What are the Four Questions for Picking Winning Stocks?
    
    The Four Questions for Picking Winning Stocks.
    
    1.) What’s the product?
    2.) Who’s the customer?
    3.) Can the company continue to make superior product going forward and get it to their customer at the best price in a timely manner?
    4.) Who’s the CEO and can s/he motivate the employees to make the best product faster and cheaper than the competition?
    
    As you can see, three out of four questions can be answered by being a good customer of the company (instead of reading charts). So, the more you know about a company (ingredient #1 of the recipe for Cooking Up Profits), the easier it is to pick the leader. For more information, read You Vs. Wall Street, where I use these questions to compare two companies – one that became the most successful IPO of all time and the other that went bankrupt. FYI: I identified both of these trends before they occured by using the strategies outlined in You Vs. Wall Street.
    
    
17. What was the top performing month for stocks in 2009?

April 2009 was the top performing month of the year, with gains of 9.57%. For more information, please read the article, "Spring Rally," from the NataliePace.com ezine, vol. 7, issue 4.

18. What was the top performing quarter (3 months) in 2009?

March, April and May 2009 were the top performing months of the year, with gains of 8.78%, 9.57% and 5.59%. For more information, please read the article, "Spring Rally," from the NataliePace.com ezine, vol. 7, issue 4.

19. What earned more in 2009, NASDAQ, gold, the Dow Jones Industrial Average or high yield bonds?

High yield bonds earned more than NASDAQ, gold or the Dow Jones Industrial Average.

For more information, please read the articles, "Hot Funds of Summer," from the NataliePace.com ezine, vol. 7, issue 7 and "Latin America Funds Doubled," from the NataliePace.com ezine, vol. 7, issue 8.

20. Which year is expected to perform better, 2010 or 2011, based upon historical returns of election years?
    
    2011. The Pre-Election Year is typically the strongest year for gains on Wall Street. For more information, read "The Santa Rally and Other Wall Street Secrets" in my book, You Vs. Wall Street.

About Natalie Pace:
Natalie Pace is the author of You Vs. Wall Street and host of the Pace and Prosperity radio show on BlogTalkRadio.com/NataliePace. She is a repeat guest on Fox News, CNBC, ABC-TV and a contributor to HuffingtonPost.com, Forbes.com, Sohu.com and BestEverYou.com. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on http://www.facebook.com/pages/NWPace, and on YouTube.com/NataliePaceDOTCOM. For more information please visit, http://www.nataliepace.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 all in on any asset class or individual stocks. 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.  

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.

Will OPEC Kill the Santa Rally?

by Natalie Pace.

Includes my Hot News on Cool Stocks Report.

Includes my Hot News on Cool Stocks Report.

November 29, 2010

General Stock Market Performance

Wall Street Highs/Lows in the New Millennium:

Hot News on Cool Stocks Important Data
12X gains on U.S. Gold, our 2009 Company of the Year!
NASDAQ Outscored the Dow Jones Industrial Average, 40% to 15%, in 2009
NASDAQ Outscored Gold in 2009, 40% to 26%
77% of the positions listed in 2008-2010 are in the money. Woo hoo!
Gold returns top stocks, real estate, bonds and T-Bills Over the Last 10 Years… (see below chart)
Real Estate Lost -12.4% in 2009.

Compare those returns to the returns of stocks, real estate, bonds, Treasury bills and gold over the last 30 years.

Market Update:
On November 8, 2010, OPEC released a press release stating that they had agreed upon a new "long term strategy." The details of that strategy are scheduled to be released at the December 11, 2010 OPEC meeting in Quito, Ecuador. There is speculation that the strategy will be going from the U.S. dollar valuation to a "basket of currency." If that occurs, it will likely be distressing to investors, so December 11, 2010 is a day to watch for news. Will OPEC sink the Santa Rally? Watch and wait, but definitely be aware of the potential.

In other big news, the National Commission on Fiscal Responsibility and Reform Co-Chairs Senator Alan Simpson, Former Republican Senator from Wyoming, and Erskine Bowles, Chief of Staff to President Clinton, released their draft proposal for financial reform to President Obama. In the opening pages, they state very clearly, "America cannot be great if we go broke. Our economy will not grow and our country will not be able to compete without a plan to get this crushing debt burden off our back. We have a patriotic duty to come together on a plan that will make America better off tomorrow than it is today… We must stabilize then reduce the national debt, or we could spend $1 trillion a year in interest alone by 2020."

Their plan is designed to stabilize the debt by 2014 and reduces debt to 60% of GDP by 2024 and 40% by 2037.

Cuts Debt to 60% of GDP by 2024, Below 40% by 2037

Reduces Deficit to Sustainable Levels by 2015, Balances the Budget by 2037

What’s the crystal ball on real estate?
"Our projections remain very grim for the foreseeable future: All told, we expect about two and one-quarter million foreclosure filings this year and again next year, and about two million more in 2012. While these numbers are down from their peak in 2009, they remain extremely high by historical standards and represent a trauma in the lives of millions of people affected," according to Federal Reserve Board Governor Sarah Bloom Raskin, speaking at the National Consumer Law Center's Consumer Rights Litigation Conference, in Boston, Massachusetts, on November 12, 2010. Foreclosures in 2009 were 2.8 million, with 2.3 million in 2008 and 1.3 million in 2007. All told, 13 million homes might be lost before this real estate correction is over. This likely means that there will not be much upside in real estate values until beyond 2012.

911 Investor Alert: Bonds
Finally, the binge of Federal Reserve Treasury bond buying is weighing heavy on the U.S. dollar, lowering its value. This makes U.S. exports more attractive to the worldwide marketplace now, but may prompt defensive actions, like OPEC moving to a basket of currency, on the worldwide stage. Some economists think it will usher in inflation and warn bond holders to find other areas of safety. We can only hope that the Federal Open Market Committee’s new "Quantitative Easing II" (buying $600 billion in long term T-bills over the next seven months) move will not become a very expensive short-term fix. It is important that you read the Bond articles that I’ve been publishing for the last six months. Scour the archives.

So is There Anything Good Out There?
Yes, believe it or not, there are some excellent areas in the economy. My 2009 Company of the Year has posted up to 12X gains. Almost every fund on Wall Street outperformed gold in 2009. Your nest egg has almost fully recovered. If you have a great credit rating and can get a loan, there are areas of the country where you can buy cash positive, low risk income property. And even if you’re in trouble, in doubt, losing a home or declaring bankruptcy, there are some very important things to do to squirrel away as many assets as possible. The best way to learn about these things is to read this ezine top to bottom, including the Investor IQ Test, and take extra time to read some of the original articles that are linked to, including articles on gold, 911 Investor Alerts, Bonds (the next disaster), Company of the Year and much, much more.

Essentially, your best investment is to start understanding all of this, so I strongly recommend that you call 866-476-7442 NOW and secure your seat at the February 5-7, 2010 Get Rich and Enrich Retreat. You will be very glad that you did, for, as you can see, the economy is a wreck. It’s going to take very skillful driving to achieve your goals. And yes, this is a holiday gift for you, for your loved one, teen, sibling, parent, et al. We have a blast, and the sunny beach town of Santa Monica is a great vacation!

Banks Are Still Failing
There have been 139 bank failures so far in 2010 (as of November 1, 2010), 140 bank failures in 2009 and 25 in 2008. Don’t be seduced by the banks reporting record earnings! Most of them are fairy tales.

Are We in a Recovery?
The National Bureau of Economic Research (NBER.org) has declared that the 2007 recession ended on June 2009, however, that doesn’t mean that the economy is racing to recovery. In the statement issued by NBER, the Committee reported, "The committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity." On September 21, 2010, the Federal Open Market Committee released a press release advising, "Information received since the Federal Open Market Committee met in August indicates that the pace of recovery in output and employment has slowed in recent months."

Interested in Educating Yourself on Investing?
Come to the February 5-7, 2011 Get Rich and Enrich Retreat in Santa Monica, California. Get more information on the home page at NataliePace.com under the Get Rich and Enrich Retreat banner ad.

Track Record of our Reporting
While the markets are still down significantly since their high in October of 2007, the Hot News and Cooling Off lists below have a winning track record before, during and after the Great Recession – in bear and bull market years. 95 positions listed below – 77% -- have delivered impressive gains over the past two years, even while the Dow Jones Industrial Average is still trading lower than it was in 2007 (when it cracked through 14,000)! Only twenty-eight of our listings went in the opposite direction of the reporting, which is quite impressive given the market gyrations of more than 7000 point swings since 2008. FYI: If the Santa Rally 2010 tracks the most recent years, there may not be a Santa Rally this year.

Remember that the trading portfolio should be equal to your experience, and should not be part of your nest egg. (The nest egg is money you earn while you sleep, not while you day-trade.) If you’re new, you should be using education or fun money, not your nest egg, to learn on. Take your trading profits early and often in these volatile, whip-sawing years. (Your nest egg is better off just rebalancing once or twice a year, not trying to market time.)

4 out of 7 Company of the Year selections more than doubled.  My 2003, 2004, 2006, 2007 and 2009 Companies of the Year posted up to 9000% gains (Taser), up to 690% gains (Opsware), up to 215% gains (Suntech Power Holdings), and up to 10X ROI for U.S. Gold, respectively. MySpace, my 2006 Company of the Year, was a large part of News Corp’s success with shareholders that year.   So five out of seven Company of the Year selections were superperformers. 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, Taser International, on 1.1.03.)

Some of my best picks include: U.S. Gold (UXG) 10X return on investment, Google (GOOG) +585%, Opsware (OPSW) +690%, Rio Tinto (RTP) +145%, Sohu (SOHU) +150%, Suntech Power Holdings (STP) +107%, Taser (TASR) up to 9000% gains. Some of the best picks in 2008 and 2009 were put options – on the Cooling Off list -- which is why I added options training to my 3-day Get Rich and Green Investing Retreat. Look on the Cooling Off list for details on the incredible gains options investors enjoyed (and the losses that average investors avoided as a result of being alerted to the problem) on Wells Fargo, Fannie Mae, Toll Brothers, KB Home, Novastar Financial and more.

The NataliePace.com ezine was the first to list the following 911 alerts:

• 2008 Recession (Get Safe)
• Trim back on Faded Blue Chips in 2006
• Get out of Dodge (real estate) in 2005
• Google at the IPO! (May 2004)
• To get Fannie Mae and Freddie Mac out of your 401(k) in 2003

Market Movers:
The Federal Open Market Committee and Monetary Policy
The Fed funds rate continues to be "0 to ¼ percent." The next FOMC meeting takes place on December 14th, 2010. On October 15, 2010, Federal Reserve Board Chairman Ben Bernanke said, "The FOMC is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation over time to levels consistent with our mandate." Since interest rates are at zero, it is likely to be more long-term security purchases, further increasing the Fed’s balance sheet, above levels that are consistent with prudence!

GDP Growth Rates: Third estimate GDP growth rates for 3Q 2010 will be released on December 22, 2010 at 8:30 a.m. ET from the Bureau of Economic Analysis (BEA.gov). Second Estimate GDP growth rates for the 3rd quarter came in at 2.5%. 2Q 2010 GDP growth was 1.7%. 1Q 2010 GDP growth was 3.7%.

These release days tend to be very active on Wall Street, and the second half of 2010 is expected to be much slower growth than the first half. Ergo, this could be an ugly day.  For more BEA release dates, go to the BEA.gov website and be sure to visit the NataliePace.com calendar section often.

EDUCATIONAL OPPORTUNITES AND INFORMATION:
1. FOMC Information: Interested in reading the minutes of the November 2^nd & 3^rd, 2010 FOMC meeting for yourself? You can. The official Federal Reserve document is available online. Go to FederalReserve.gov to read! According to the Committee, "The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period. The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings." In other words, the Feds are buying up U.S. Treasury bills (which otherwise are losing favor on the world marketplace).

The tentative FOMC meeting schedule for the 2010-2011 calendar is: December 14 (Tuesday), January 25-26, 2011 (Tuesday-Wednesday), March 15, 2011 (Tuesday), April 26-27, 2011 (Tues.-Wed.), June 21-22, 2011 (Tues.-Wed.), August 9, 2011 (Tuesday), September 20, 2011 (Tuesday), Nov. 1-2, 2011 (Tues.-Wed.), December 13, 2011 (Tuesday), January 24-25, 2012 (Tues.-Wed.).

2. Calendar Section: Conferences, Online Chats and more: Check out the Calendar section of NataliePace.com regularly. You will find great opportunities to attend the most exclusive business and Green Conferences, learn about upcoming TV and radio shows and other educational opportunities – many are FREE! 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 Pace and Prosperity Show with Natalie Pace on BlogTalkRadio.com. Check BlogTalkRadio.com/NataliePace for upcoming shows and call-in and log-on instructions and to listen back to any shows that you might have missed. These shows are pod casts and are FREE!

BlogTalkRadio offers a Q&A format, where you can call in with your most pressing questions. Be sure to keep a list of your questions as they come up, and join our ongoing dialog on peace and prosperity, getting rich and enriching, green investing, the Thrive Budget and more on Facebook at http://www.facebook.com/NWPace.

3. Survey Results: Each month we have three new surveys so that we can stay in touch with your needs and desires. This month, we want to get the holiday gift giving right! Cast your vote on our survey page.

4. Euro interest rates: ECB rates are at 1.00% (main refinancing), 1.75% (marginal lending) and 0.25% (deposit facility). The next meetings and interest rate announcements are scheduled for December 2 & 16, 2010 at 2:30 p.m. CET. (January 13, 2011 after that.)

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 at all – not even for "pros." 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.
Applied Materials (AMAT)
Federated Prudent Bear Fund (BEARX)
Sunpower (SPWRA)
Suntech Power Holdings (STP)

Profit-Taking:
Hoku Corp. (HOKU) +21%
LDK Solar (LDK) +218%
U.S. Gold (UXG) 12X ROI

DELETIONS (Take your profits early and often):
ENER1 (HEV) 11.11.10 with gains of 37%
Kulicke and Soffa Ind. (KLIC) 12.1.10
Veeco (VECO) on 11.11.10

HOT NEWS on COOL STOCKS LIST

Recently Deleted Companies 2008-2010:
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. U.S. Gold profit taking on 11.6.08 amounted to 72% gains. Conergy gains of 51% were taken on 11.7.08. American Superconductor posted 50% gains between 12.1.08 and 1.14.09. MEMC Electronics (WFR) had 21% gains between 12.1.08 and 12.15.08. STP had gains of 69% between 12.1.08 and 1.2.09. SQM profits 20% on 1.14.09. WWAT was deleted on 2.1.09 with -62% losses. On 2.15.09, AMSC had gains of 65%, MEMC Electronics 26%, Sociedad de Quimica y Minera 48% and U.S. Gold 432%. Citigroup gains of 42% on 3.15.09. Genentech was deleted on 3.15.09 with gains of 29%. OSI Pharmaceuticals was deleted on 3.15.09 with 7% gains. Rio Tinto was deleted on 3.27.09 with gains of 67%. On 3.27.09, the following companies were in the money: ALTI (+48%), AMSC (+51%), eBay (+24%), GE (+40%), HOKU (+38%), LDK (+46%), MEMC (+44%), PBW (+35%), SATC (+42%), SQM (+76%), STP (+211%), TSL (+207%), U.S. Gold (+456%) and WBK (+25%). Profit-taking 4.13.09: ALTI +209%, AMSC +70%, HOKU +32%, LDK +64%, PBW +42%, SQM +42%, UXG+418%. Deleted 4.13.09: eBay, +45%, Eurox -11%, GE +47% & -56%, Google +9%, Maxwell +25%, MEMC Electronics -33% & +49%, Microsoft +24%, SATC +67%. STP +262% & -64%, TSL +216% & -67%, Westpac +42% & -22%. Deleted 5.4.09: FMC Corp. with 19% gains. PZD with losses of -39%. SPWRA with 19% gains. TREMX with 50% losses. WSDT with losses of -59%. Deleted 5.15.09: SQM with gains of 38% and 62%. Deleted 5.31.09: EMKR with losses of 13% and 88% and Melco with losses of 8%. Ener1 with gains of 11% and 17%. Deleted 7.20.09: Conergy with losses of -52-98%. Deleted Smith and Nephew on 8.15.09 with gains of 17% and losses of 28%. Deleted the New Zealand dollar currency ETF by Wisdom Tree with 36% gains on 12.12.09. 12.18.09: Deleted Ener1 with 22% gains and Satcon with 29% gains. Deleted 1.11.10: KCI with 88% gains! Deleted 8.1.10: Galaxy Resources with 48% and 9% returns and Rio Tinto with 21% gains. Deleted 9.13.10: American Superconductor (flat) & AOL (flat). 10.1.10: Blockbuster busted out in bankruptcy on 9.28.10. KLAC was deleted with 11% gains. 10.15.10: ENER1 was deleted with flat performance. 11.11.10: ENER1 was deleted with 37% gains. VECO was deleted with 2% & 41% gains. 12.1.10: KLIC was deleted with 12% gains.

Recently Deleted from the Hot News list:
ENER1 (HEV) on 10.15.10 & 11.11.10
Kulicke & Soffa on 12.1.10
Veeco (VECO) on 10.15.10 & 11.11.10

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. Getting the price right is as important as picking the right company. Never pay retail!

Recent Additions:
ENER1 (HEV) added 11.11.10
KLA Tencor (KLAC) added 10.1.10
PowerShares Lux Nanotech (PXN) 11.15.10
Shutterfly (SFLY) added 11.1.10
Veeco (VECO) added 11.11.10

Recent Deletions:
Applied Materials (AMAT) (moved to Hot List on 12.1.10)
eBay (EBAY) (moved to Cooling Off list on 11.1.10)
Google (GOOG) (moved to Cooling Off list on 10.15.10)
Tesla (TSLA) (moved to Cooling Off list on 11.11.10)

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):
Amazon (AMZN)
Baidu (BIDU)
eBay (EBAY)
Ford Motor Company (F)
Kulicke & Soffa (KLIC)
Netflix (NFLX)
Priceline (PCLN)
Taubman (TCO)
Tesla (TSLA)
Yahoo (YHOO)

DELETIONS:
None

Deleted in 2008/2009/2010:
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 had gains of over 32-34%. Mentor was deleted on 9.30.08 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. Wells Fargo was deleted on 11.6.08 with 35-50% gains on the put and again on 12.1.08 for 50-70% gains. American Express posted 35% gains in just 30 days, between 2.1.09 and 3.2.09. First Solar was deleted on 8.13.09 with 33% gains. KB Home with 74% gains and Toll Brothers with 51% gains on 10.01.09. Deleted AMAT on 8.1.10 with gains of 12.5% & 7% (put gains would be double or more). 8.30.10: Deleted FIG (-10% & -40%), MXWL (-37%), MDT (-4% & -24%), MSFT (-20%) -- all for gains. Deleted MGM 9.13.10 for 61% gains.

IMPORTANT DISCLAIMER (PLEASE READ):
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:

TED, ED and Other Important Skeds.

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! We add online chats, article updates, teleconferences, etc. as they are booked, so be sure to visit the calendar section early and often.  Below is only a partial listing of what’s happening this month.

To access links to the event website and registration, go to the Calendar section at NataliePace.com.

Happy Hanukkah!
December 1-9, 2010

Special Economic Report
Wednesday, December 1st, 2010
The National Due date of the special report from the Commission on Fiscal Responsibility and Reform.

Living off the Grid. Radio Show
Tuesday, December 7th, 2010
9:00AM through 9:30AM PT.
Renewable energy author and educator Dan Fink has lived off the grid since 1991, 11 miles from the nearest power pole or telephone line. Learn how to go green in your life! Call-in Number: (347) 215-7305

Natalie Pace: Budget Like a Rock Star
Tuesday, December 7th, 2010
10:00AM through 10:30AM PT.
Join BestEverYou Elizabeth Hamilton-Guarino as she interviews Wall Street's rock star, Natalie Pace. Hard assets and a beautiful bottom line are just what every girl needs!

TEDWomen Conference, Washington DC
Tuesday, December 7th, 2010
TEDWomen will celebrate women and girls around the world by convening a global event centered in Washington -- and connecting with self-organized TEDx for TEDWomen events around the world.

OPEC meeting in Quito, Ecuador
Saturday, December 11th, 2010
OPEC meets. They will also release details on their new Long Term Strategy, which was approved for adoption at the Oct 14, 2010 meeting. If they adopt a basket of currencies, this could be a problem for the U.S.

FOMC Meeting
Tuesday, December 14th, 2010
The Federal Open Market Committee meets to determine Federal Reserve policy in the U.S.

Winter Solstice
Tuesday, December 21st, 2010
Celebrate the winter season, when the Earth is tipped farthest away from the Sun. Ski! Sled! Snowboard! Snow angels!

Merry Christmas
December 25, 2010

Happy Kwanzaa
December 26, 2010-January 1, 2011

Gold Fever! Radio show with Natalie Pace
Tuesday, January 11th, 2011
6:00PM through 6:30PM PT
It's gold fever 24/7 on TV these days. Is gold the safe haven when the dollar crashes? Or is it just another boom/bust cycle? Call-in Number: (347) 215-7305

Martin Luther King Jr. Holiday
Monday, January 17th, 2011

FOMC Meeting
Tuesday, January 25th, 2011
The Federal Open Market Committee meets to determine Federal Reserve policy in the U.S. Two-day meeting January 25-26, 2011.

Chinese New Year
Thursday, February 3rd, 2011

Get Rich and Enrich Retreat, Santa Monica, CA
Saturday, February 5-7, 2011
You spend hundreds of thousands learning how to earn money. Why not spend a fraction of that learning how to invest? 3 days in a board room setting, learning investing directly from Natalie Pace, sets you up for life. Feb. 5-7, 2011.

Washington's Birthday
Monday, February 21st, 2011

TEDActive Conference. Palm Springs, CA
Monday, February 28-March 4, 2011
TEDActive brings innovators of the future together at a desert oasis retreat, creating startling conversations supplemented by live music, bonus speakers, and whimsical soirees.

TED2011. Long Beach, CA
Monday, February 28-March 4, 2011
A cast of characters capable of stirring the imagination as never before. Explorers, storytellers, photographers, scientific pioneers, visionaries and provocateurs from all parts of the globe.

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