Clean Up.

by Natalie Pace.

Includes an Oil Spill Stock Report Card.

The Tidewater vessel Damon Bankston which transported 115 survivors from the explosion on the BP/Transocean Deepwater Horizon oil rig.

The BP Gulf Oil Disaster will be with us for a long time to come. And with oil still gushing into the Gulf, it’s hard to pinpoint an exact moment when "kill" efforts finally work and sustained clean up and recovery begins. (We’re all praying this happens yesterday.)

Volunteers are bathing birds and oil-saturated wildlife in mild detergents and are pumping Pepto Bismal into their stomachs to flush out swallowed oil. (Go to TristateBird.org to donate to the effort.) Local fishermen are being tasked with skimming and containment of the oil before it hits the shore. Subsea rovers are producing horrific images from a mile beneath the surface of a problem we have yet to solve.

BP is leading the disaster effort, in conjunction with US authorities and relief efforts, however, there are still far too many questions left unanswered and far too many holes left unplugged. Is BP directly responsible for the disaster or could one of their many contractors be more culpable? Names like Halliburton, Transocean and Dick Cheney have been tossed around by the media (and President Obama), but definitive information on who did what where with regard to contractors – those that might have caused the problem or those that might be helping with the cleanup is still fragmented, at best. (Some potentially responsible parties have largely escaped attention: keep reading.)

According to BP Chief Executive Tony Hayward, "The honest truth is that this is a complex accident, caused by an unprecedented combination of failures. A number of companies are involved, including BP, and it is simply too early – and not up to us – to say who is at fault." No doubt there will be an exhaustive analysis of the failures in an attempt to prevent this from occurring again and to recover damages for the plethora of claims that are already pouring in. According to a BP press release of May 28, 2010, the cost of the response to date amounts to about $930 million, or 1/20 of the $20 billion in profits BP made last year. And this is only the beginning.

BP CEO Haywards’ comments are a sobering reminder that efforts to capitalize on the cleanup by investing in so-called cleanup specialists or shorting culpable culprits are not as easy as they sound. In fact the SEC and FINRA have issued an Investor Alert on scams in the Spill Cleanup Arena, which I’ve reprinted in this ezine.

TransOcean (NYSE: RIG) is a BP partner on the platform, and the company has filed a Limitation of Liability Petition, in the hopes of consolidating the claims of the employees and families impacted by injuries and deaths related to the rig explosion. Nine of the 11 crew members who lost their lives were TransOcean employees. This petition would (reportedly) limit the company’s losses to $27 million. TransOcean stock is already trading at a 5-year low, which will likely go lower.

MI-SWACO, which employed two of the 11 men killed on the Deepwater Horizon rig, is jointly owned by Smith International, Inc. (NYSE:SII) and Schlumberger Limited (NYSE:SLB). Smith and Schlumberger have flown under the radar of the media, and the stock of both companies has remained relatively buoyant in the wake of the sinking and gushing disaster. Why wasn’t there a MI-SWACO, Smith International or Schlumberger CEO present at the Congressional hearings?

Halliburton (NYSE: HAL) stock has also proven to be fairly resilient, despite a flurry of excoriating headlines. This company is notorious for surviving scandals relatively unscathed. In the Congressional hearings, it appears that the Halliburton strategy is to claim BP made them perform shoddy work with subpar materials.

Another company with a fleet of vessels in the general vicinity that might be helping with the cleanup, Gulfmark (NYSE: GLF), has a noteworthy complication. The Chairman of Gulfmark is a former Lehman Bros. Managing Director who jumped ship in September 2008, the month Lehman Brothers declared bankruptcy (after being with the firm for 39 years).

And then you have one hero of this entire, unprecedented disaster, who has seen only small glimpses of the limelight. As the fates would have it, a Tidewater (NYSE: TDW) vessel – the Damon B. Bankston – was tethered just 40 feet away from the Deepwater Horizon when the explosion occurred. Thanks to the rapid response of Capt. Alwin Landry and his crew of 12, the loss of life on April 20, 2010 was limited to 11. 115 workers were rescued, cared for and shipped 110 miles to dry land. Far from the standard operating procedures Capt. Landry had encountered over his 14 years with Tidewater Marine -- as the boat captain responsible for hauling mud, food, supplies, crew and more from the Louisiana shore to the offshore oil wells -- he was tasked that night with saving his own skin and others amidst explosions, fireballs and a torrent of mud, while pulling survivors from the deadly drink of the Gulf of Mexico.

Captain Landry has yet to receive his Presidential Medal of Freedom from President Obama (surely he will), but he is my Hero of the Month. And the fact that Tidewater went through all of fiscal 2010 without one lost-time accident, and rewarded their staff with a million dollar bonus (despite a recession and revenue loss in their industry) gives me some faith (not 100% faith, but some) that this company is doing something very, very right from the executive suite to the vessel deck.

At BP, their goals were simply stated - no accidents, no harm to people, and no damage to the environment. Unfortunately, today, that mission leaves a bitter taste in our mouths and an oil spill the size of Delaware in the Gulf of Mexico.

At Tidewater, safety goals were more than just a catchy phrase. 115 people, whose voices might have been forever silenced with Texas Tea, are singing their praises, even if most of the world has yet to hear the encomium.

Tidewater. You get my vote for Company of the Month. During the worst oil spill the world has ever seen, your crew has shown what safety standards and disaster preparedness acts like.

Tidewater was added today to the Stocks to Watch List of my ongoing Hot News on Cool Stocks list, in anticipation that the oil spill will continue to drag on the markets and that the good news of these heroes will continue to be buried in the ongoing horror of this disaster. (In other words, it’s likely that the Tidewater share price will be lower as the summer wears on, particularly if we have a devastating hurricane season.) Transocean was added to the Cooling Off List. To line up the numbers of these companies, alongside BP, Halliburton and Gulfmark, click on the Oil Spill Stock Report Card.

Should you short BP stock?
So what about BP stock? Should you short it? This disaster will cost BP billions – a price that a company with $272 billion in sales and $20 billion in profits can afford. It is unlikely that BP’s customers (drivers everywhere) will stop needing their product, so even with a disaster of this size, sales and profits will continue virtually uninterrupted. Oil company share price is so closely linked with oil prices that if this disaster interrupts supply (and causes prices to escalate), it is likely that even BP will be carried in the upswing.

By comparison, Exxon Mobil’s share price ended up higher the year of the Valdez disaster. The Exxon Valdez oil spill occurred on March 24, 1989, when the Exxon share price was trading at $11.13/share. The spill had very little impact on Exxon’s share price, which traded at $12.50/share by the end of 1989 (and currently trades for $60.46/share).

Exxon Mobil share price from January 1989 to January 1991

Source: MoneyCentral.MSN.com

Full Disclosure: Natalie Pace does not own stock or positions in any company mentioned in this article.

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 FoxNews, CNBC, ABC TV and has contributed to Forbes.com, Sohu.com and BestEverYou.com and Magazine. 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/Natalie-Pace/416616285568, on BlogTalkRadio.com/NataliePace and on YouTube.com/NataliePaceDOTCOM. For more information please visit, http://www.nataliepace.com.

Oil Spill Stock Scams.

—Don’t Get Cleaned Out by False Cleanup Claims. SEC.gov and FINRA.org Investor Alert.

The oil spill in the Gulf of Mexico poses more than an environmental and economic threat to the region. It also poses a financial threat to investors in the form of scams promising financial gains from investments in companies that claim to be involved in cleanup operations.

Millions of dollars are being spent daily on short-term cleanup of the spill, which began in April 2010 with a blowout at an oil-drilling platform off the coast of Louisiana. The cost of long-term remediation remains unknown given the uncertainty about the extent of damage to the environment, the fishing industry and tourism.

The staff of the Securities and Exchange Commission and FINRA are issuing this alert to warn investors about potential scams that exploit the Gulf oil spill and related cleanup efforts.  While some of the companies touting their role in the cleanup may be legitimate, others could be bogus operations that are only looking to clean out unsuspecting investors.

In a recent action, on May 25, the SEC suspended trading in shares of ACT Clean Technologies Inc., of Huntington Beach, Calif. The Commission took this action because of questions about the accuracy and adequacy of publicly disseminated information concerning, among other things: (1) British Petroleum's purported expression of interest in using a so-called oil fluidizer technology purportedly licensed to ACT's wholly-owned subsidiary for use in cleanup operations in the Gulf of Mexico; and (2) the purported results of field tests finding that the oil fluidizers are effective for use in cleanup efforts in the Gulf of Mexico.

Spotting Potential Oil Spill Stock Scams
Some companies may issue press releases, or send unsolicited faxes or spam emails that might include:

• Claims to have products or technologies that are effective in remediating oil spills or restoring the eco-system
• Mention of contracts or expected contracts with BP, formerly British Petroleum, that will aid the cleanup effort
• Claims that the company is providing technical assistance or expertise to BP or to U.S. government agencies such as the Coast Guard or the Environmental Protection Agency
• Predictions of rapid, exponential sales growth
• Pressure to invest immediately

How to Avoid Getting Scammed
Here are some tips to avoid potential scams:

• Investigate before you invest. Never rely solely on information contained in an unsolicited fax, email, text message or tweet—or in a blog post or online thread. It's easy for companies or their promoters to make glorified claims about product effectiveness, lucrative contracts, or the company’s revenues, profits or future stock price.
  
  
• Find out who sent the message. Many companies and individuals that tout stocks are paid to do so by the company being touted.  Examine the fine print for any statements indicating payments in cash or in stock for issuing the report or message.
  
  
• Find out where the stock trades. Most unsolicited fax and spam recommendations involve stocks that do not meet the listing requirements of the major stock exchanges.  Instead, they usually are quoted on the OTC Bulletin Board or in the Pink Sheets, which do not impose minimum qualitative standards.  Many of the securities quoted on the OTC Bulletin Board or in the Pink Sheets trade infrequently, which can make it difficult to sell your shares.  When shares on the OTC Bulletin Board or in the Pink Sheets do trade, they may move up or down in price very rapidly.
  
  
• Read a company’s SEC filings.  Most public companies file quarterly and annual reports with the SEC.  Check the SEC’s EDGAR database to find out if the company is filing reports to the SEC, and read them.  Be aware that registering securities and filing reports with the SEC does not mean the company will be a good investment.
  
  
• Exercise some skepticism. Scammers are very adept at making their pitches appear real, including the use of slick videos and websites. Be extremely wary of any pitch that suggests immediate pay-offs, especially if the investment involves a start-up company or a product or service that is still in development.

If you’re suspicious about an offer or if you think the claims might be exaggerated or misleading, please contact us:
SEC Office of Investor Education and Advocacy
FINRA Complaint Center

Additional Resources
http://www.sec.gov/answers/hurricane.htm
http://www.sec.gov/litigation/suspensions/2010/34-62166.pdf
http://www.sec.gov/answers/pumpdump.htm
http://www.finra.org/Investors/ProtectYourself/AvoidInvestmentFraud/
http://www.sec.gov/investor/alerts/oil.htm

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

About FINRA:
The Financial Industry Regulatory Authority (FINRA), is the largest independent regulator for all securities firms doing business in the United States. All told, FINRA oversees nearly 4,800 brokerage firms, about 170,400 branch offices and approximately 643,000 registered securities representatives.

FINRA believes investor protection begins with education. Using the Internet, the media and public forums, we help investors build their financial knowledge and provide them with essential tools to better understand the markets and basic principles of saving and investing.

Father’s Day.

by Staff.

No more cheap, last minute, striped ties!

Dear Dad,

Thi$ year, in$tead of $ending you a la$t-minute bargain basement tie, I $plurged on a pre-meditated, Iron Man II $hirt in$tead. Don’t worry. The kid$ and I will $urvive $omehow. Though $ummer vacation may have to be barbecue$ in the backyard (unle$$ Chri$tma$ come$ a little early – hint hint)…

With Love,

Your very loving (and broke)
Daughter

----------------------------------------------------------------------------- 

Dear Daughter,

You kNOw how much I appreciate receiving a NOte from you on Father’s Day, and to have that NOte accompanied by a t-shirt (that I would NOt be caught dead in and don’t even think of burying me in it), well there are NO words to express just how hoNOred I feel.

I’ve got a big barbecue pit in the backyard and though your mom and I are NOtoriously lazy about cooking NOw that you kids all have families of your own, I would NOt hesitate to throw a few shrimps on the Barbie while talking in an Aussie accent so that we can all pretend to be vacationing in Australia.

With Love,

Your Very Loving (and retired on a fixed income)
Dad

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This year if you want to honor Dad with a gift he really wants, check out the survey on the home page at NataliePace.com. Dad: Vote so we know what to get!

Mom: Note that massage and pampering usually $cores in the top $lot in the $urvey. Don’t undere$timate the gift of your love, affection and foot rub$!

Central Bank Independence.

by Dr. Gary S. Becker.

Governments that control central banks have often used their power to increase the money supply and create inflation. A growth of the money supply increases the revenue collected by the government through an inflation-imposed tax on the holders of money.

These and other abuses of governmental power over central banks helped create the intellectual support for independent central banks. During the past several decades several central banks, such as the Mexico central bank, have become more independent of their government.

I have little doubt that central banks should have considerable independence. Yet complete central bank independence from politicians does not seem desirable, since banks also can abuse their powers. At times they can be tone deaf to what is happening in the economy, and at other times they are too much under control of the private banks that they regulate.

An analogy is often drawn between an independent judiciary and an independent central bank. Just as an independent judiciary often prevents legislatures and heads of governments from abusing their power to formulate and interpret laws, so an independent central bank is supposed to prevent governments from inflating the money supply, and in other ways creating monetary mischief. Yet the analogy between central banks and the judiciary is incomplete and not perfect. If the Supreme Court gives an unpopular opinion, such as its recent decision on the unconstitutionality of bans on spending by corporations during elections, that does not directly reflect on the governing policies of the President or Congress. Indeed, President Obama has openly criticized the opinion and clearly expressed his opposition. On the other hand, when central bank policies help create inflation or unemployment, the governing party will be blamed because the electorate cannot distinguish the effects of central bank behavior from the effects of presidential and legislative decisions.

Milton Friedman in "Should there be an Independent Monetary Authority" (1962) and elsewhere argued against complete independence of the Fed and other central banks because that would give too much power to the top bank officials. He also opposed making a central bank subservient to political leaders because that could lead these leaders to misuse the bank’s powers in order to promote their short–term political gain. His solution was a monetary rule, such as a fixed growth rate in the money supply. Such a rule would make many important central bank decisions completely automatic, and independent of the desires of both central bank heads and government officials. Taylor-type interest rate rules that have greatly influenced some central banks are generalizations of Friedman’s rule on money supply growth that are linked to inflation and the growth of GDP. Taylor-type rules also can operate automatically, and could be largely independent of both central bankers and politicians.

Yet even if a central bank followed a rigid rule to determine its interest rate and money supply policies, it would be necessary to periodically evaluate how well the rule was working. And since central banks are unlikely to continue to follow a fixed rule in the face of a financial crisis, evaluations of its discretionary decisions are also necessary. While the bank should provide its own evaluations, these would tend to be biased toward justification of what it had done.

This is why I support substantial but not complete independence of central banks from legislative and executive oversight.  Such oversight can force central banks heads to justify what they did in a public and open arena. The need to provide regular reports on its behavior to legislative committees would bring out mistakes made by the central bank. It would also induce central bankers to take more careful decisions since they would anticipate having to justify what they did in a public forum.

The US approach to the Fed makes a reasonable compromise between independence and oversight. The President appoints, subject to Senate approval, all seven members of the Board of Governors of the Federal Reserve for 14-year terms. Neither the President nor the Senate can remove any member prior to the expiration of their terms because of disagreements with bank policies. The President chooses, subject also to Senate approval, the Chairman of the Board, the most powerful position on the Board, from among the sitting Governors. The chairman serves for four years and can be reappointed. The chairman must report twice a year to Congress on the Fed’s policies, and he is asked to testify on other occasions before Congressional committees. He also collaborates with the Treasury on various occasions, as during the 2008-09 financial crisis.

Some critics believe the Fed has too much independence from Congress and the President. Following this line of criticism, Representative Ron Paul of Texas in 2009 introduced a bill that would provide for greater Congressional oversight of the Fed. Others believe that the Fed and other central banks have too cozy a relation with governments, and that political pressures excessively influence central bankers to conform to short-term political wishes.

The best way to help meet both objections is to make public all the Fed’s decisions (and that of other central banks), with no more than a short lag. Rather than being an asset, central bank secrecy is a handicap to businessmen and consumers who make investment and other decisions that are affected greatly by what the bank does.  To maximize public information, the central bank, whenever feasible, should follow known interest rate and money supply rules that are clearly related to the rate of inflation and the degree of slack in the economy.

Under these conditions, present laws on the length of the chairman’s term and that of the other members of the Fed’s Governing Board, and the laws requiring periodic reports of the chairman before Congress, would be effective. A system that has the Fed following rules that govern its policy decisions, combined with some discretionary authority in crises, and also with some congressional oversight would provide a reasonable mixture of central bank independence and control by Congress.

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.

.

Safe and Strong.

by Natalie Pace.

You could have earned 20% gains with a Recession-Proof Plan in 2009. Learn how.

In 2009, you could have kept half safe and still earned 20% gains (20 cents on every dollar invested). This may sound hard to believe because all you hear on the news is recession, unemployment and oil spill. But the NASDAQ outperformed gold, 40% to 26%, high yield bonds had a field day, with gains of 46% and Australia was a rock star, performing at 71% returns in the Asia Pacific, excluding Japan, fund category. Wow. Those are a lot of gains being flushed down the drain of the daily headline drama that embroils most Americans.

Easy-as-a-Pie-Chart Does It
Now, you might be thinking, "Well who knew? And how can I get onboard before all of this happens, when I was late to the real estate game and got burned, and was late to the DOT COM game and got burned there, too?" Uh. Well, this easy strategy that works in bull and bear markets is not found in headlines and is not found on the lips of most brokers. Chances are that one or both are informing your investment strategy, so it was easy for you to get burned. However, it is just as easy for you to get smart, and I encourage you to do just that (and bring your friends and family along, too).

For the average investor, you need a plan that works in bull and bear markets. You do NOT need to be obsessing day-to-day over the monster tennis match that is going on between hedge funds right now. (And yes, that is the source of the extreme volatility.) Better to get enough safe, get the bailouts out of your portfolio, add hot industries and annually rebalance so that you can capture profits. The good news about this is that you are also taking ownership of the best companies in the world, while refusing to have your money routed (without your knowledge really) to the bailouts.

You can read about these strategies in You Vs. Wall Street. Or you can spend three days with me in Santa Monica at one of my Get Rich and Enrich Retreats where you will set up a blueprint of investing that works for the rest of your life. There are only three seats available at the July 23-25, 2010 retreat, so if you want to be one of the lucky twelve, call 866-476-7442 now to reserve your seat.

Stock Market Returns Over the Last 30 Years

The truth is that if you invest 10% of your take home, your nest egg will be worth more than you earn in salary, in just seven years. In 25 years, your nest egg can earn more every year in income than you do, and you can quit your job if you wish! That is based on a 10% annual return (which is what stocks did over the last 30 years). If your returns are 20%, then your nest egg is worth more than your salary in six years, and it earns more annually than you do in just 14 years. That’s the power of compounding. (FYI: Some retreat attendees, like Rita Starnes, earned 39% gains last year!)

20% Nest Egg Returns Add Up Fast!

Based upon depositing $10,000 annually (10% of $100,000 take home salary)

© 2010 NataliePace.com

Notice that if you are earning $100,000 annually, you could be worth more than a million in just 16 years. And this is a safe plan that works in bull and bear markets, which means that you can spend your time earning a living and enjoying your family instead of obsessing about your investments losing value and how you’re going to make ends meet. (If you earn less than $100,000, your money compounds in the same ratio, just with a lower principle.)

So, here’s what a Recession-Proofed Nest Egg Looks like…

And here are the returns for each of those slices of the pie in 2009.

Annual REBALANCING:
After you set your nest egg up right, each year, you simply:

1. Draw a pie chart of what you should have, making sure you have enough safe.
2. See if you want to change your four Hot Industries (the four at the top).
3. See if there is anything you want to avoid. (This year, most of the value stocks are heavy into financials. I’d underweight that.)
4. Make what you have look like what you should have (buying and selling to do that)

To your fiscal health!

If you’d like to learn what industries I think are hot, join me on my 3-teleconference series on BlogTalkRadio.com/NataliePace. The calls are scheduled for 3 consecutive Tuesday nights at 6:00 p.m. PT, starting on June 22, 2010. The call-in number is: (347) 215-7305.

Bring your questions. Bring a friend. Bring a boyfriend. Bring 5 boyfriends. Bring your mom!

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 FoxNews, CNBC, ABC TV and has contributed to Forbes.com, Sohu.com and BestEverYou.com and Magazine. As a philanthropist, she has helped to raise more than two million dollars for Los Angeles public schools and financial literacy. Follow her on http://www.facebook.com/pages/Natalie-Pace/416616285568, on BlogTalkRadio.com/NataliePace 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.

10 Golden Rules of Investing.

by Natalie Pace.

1. Tithe to yourself first.
2. Keep a percent equal to your age SAFE.
3. Diversify your stock holdings.
4. Diversify your assets.
5. Never loan money to relatives or friends.
6. Startups are fun or charity – but not nest egg investments.
7. Never let relatives or friends manage or invest your money.
8. Underweight distressed industries and overweight hot industries.
9. Rebalance at least once a year.
10. Trust no one. Verify everything.

And Here’s Why, How, When, Where, etc.

1. Tithe to yourself first. Your 401K, IRA, Health Savings Account and other "retirement" plans are protected from the claims of people whom you owe money to. (That’s how OJ Simpson kept from paying the Goldman Family when they won their $33 million dollar settlement against him.) So many people are concerned with paying down debt, when equal concern should be given to covering your assets. The people you owe money to are not going to take up a collection to keep you housed and fed if you lose your job, so don’t short-change yourself. You have an obligation to yourself, in addition to the obligation you have to pay back money you borrowed (and all of the astronomical fees and interest rates that accompany that).
   
   
2. Keep a percent equal to your age SAFE. Read the article, "What’s Safe?" in the June 2010 ezine for more details. During troubled times and recessions and/or if you’re a Nervous Nellie, overweight an additional 10-20% safe.
   
   
3. Diversify your stock holdings. Read You Vs. Wall Street, particularly page 92, to see how you can get rich and enrich the world, while employing easy-as-a-pie-chart nest egg strategies that work in bull and bear markets. Select just 10 diversified funds and you can easily see and capture your gains each year. Be sure to trim out the Bailouts and add in the Hot Industries to maximize your returns! Yes. You’ll learn how to do this in You Vs. Wall Street, but you can also come to a 3-day Get Rich and Enrich Retreat to set your investing blueprint up for life.
   
   
4. Diversify your assets. Be an and person. Own your own home and stocks and bonds and a little gold and then start thinking about other low maintenance, low risk assets. The truth of returns is that when real estate is in favor, stocks might perform more moderately, and when stocks and real estate are out of favor, gold scores. Over time, the returns are more steady and reliable, meaning that when you employ a sound, diversified strategy, you can rest easy through the storms and traumas of the moment, while your nest egg grows.



5. Never loan money to relatives or friends. Read the "Don’t Be Famous and Bankrupt" chapter from You Vs. Wall Street for details. You can give money to a relative or a friend. You can spend your fun or education money on a relative or friend’s startup business. (This can’t be an investment because most startup businesses fail and your nest egg should be tried and true, low risk/low maintenance holdings.) You don’t want to be the bank of the family and you certainly aren’t evaluating these "loans" based upon merit or the probability that the loan will be repaid. Look at your spending in the harsh light of reality. It might be charity (so give the money). It might be fun or educational (so spend the money, if you wish). But it’s not a loan or an investment that will pay you back, so don’t loan the money with that kind of expectation attached (it will only produce stomach acid and ill will).
   
   
6. Startups are fun or charity – but not nest egg investments. If you are an actor/waiter or a singer/secretary or an author/executive, you might wish to spend every last penny of your time and fun and education money on your CDs, self-published books or actor reels. However, at the same time, be sure that you are also putting 10% of your take home pay into a 401K, IRA, Health savings Account or other Buy My Own Island Fund. Within seven years, you’ll have more money in your account than you earn, and within 25 years, your assets will earn more each year than you do. That means a lot more dollars and sense (and time) to spend on those beloved art projects!
   
   
7. Never let relatives or friends manage or invest your money. According to a 2006 FINRA.org study on investment fraud, 70 percent of victims made an investment based primarily on advice from a relative or friend. Interview your money managers as if your life depends upon it because your lifestyle does.
   
   
8. Underweight distressed industries and overweight hot industries. Doing this last year meant that you could have kept almost half of your nest egg safe (earning 3% in Treasury Bills and FDIC insured saving accounts) and still made a 20% return on investment! AIG, GM, Bank of America and Citigroup were all part of the Dow Jones Industrial Average, meaning 13% of the 30 components were bailed out. Not surprisingly, the former leading blue chip index (now the bailout index) earned less than half as much as NASDAQ in 2009, with gains of 15%, compared to NASDAQ’s 40%. The Dow is still down 22% from January of 2008, while NASDAQ is only off 14%. And one of the top performing industry in 2009 was information technology, earning over 60 cents on the dollar! Another hot pick (featured in the NataliePace.com ezine) was Australia, which led the Pacific Asia funds, excluding Japan, to score returns of 71 cents on the dollar!
   
   
9. Rebalance at least once a year. If you rebalanced at the beginning of 2008, overweighting 20% safe because of the recession, your maximum losses would have been limited to just 15% if you were 50, even at the lowest point, when most people lost half of their holdings. At the same time, you would have captured gains of almost 60 cents on the dollar in clean energy, which was the top performing asset class of 2007. With that strategy, your nest egg would have been worth more in 2008, rather than less (like most people experienced). In 2009, NASDAQ earned more than gold, at 40% compared to 26%, respectively. With the markets down 2-3% (as of May 31, 2010), you can see why rebalancing and capturing those annual gains is critical to a growing nest egg!
   
   
10. Trust no one. Verify everything. Your bank: Bailed out. Some brokerages: Bankrupt. Others: bailed out. The "experts" failed, with few exceptions. Stocks over the last decade have lost money for buy and hold investors. Investors who employed my easy-as-a-pie-chart nest egg strategies and annually rebalancing (which are outlined in You Vs. Wall Street) are much richer today than they were 10 years ago. I don’t have any initials behind my name, though I have been doing what I do successfully through bull and bear markets for 12 years. Those with the credentials busted out, which means that the more "experience" a money manager has, the worse the performance was, on average. The only experience that counts these days is a PhD is in results. For help verifying the facts that matter, read, "Brokers are Salesmen, Not Surgeons" in You Vs. Wall Street and check out Nilo Bolden’s video blog on YouTube.com/NataliePaceDOTCOM.

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 FoxNews, CNBC, ABC TV and has contributed to Forbes.com, Sohu.com and BestEverYou.com and Magazine. 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/Natalie-Pace/416616285568, on BlogTalkRadio.com/NataliePace 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.

What’s Safe?

by Natalie Pace.

The Dow Jones Industrial Average has dropped almost 7500 points in the last three years. Mortgage fraud is on the rise. The Federal Trade Commission, Federal Bureau of Investigation, state securities regulators and other experts have estimated that investment fraud in the U.S. ranges from $10-$40 billion a year. Clearly, getting your money safe is your primary job these days.

You cannot turn on the television without hearing a brokerage or an insurance company (many of which really shouldn’t be in business any more) telling you what to do with your money. As if they are still qualified to do that! Fortunately, it’s your money and you have a choice of who to trust and what to invest in. If you want to keep a beautiful bottom line, you’re going to have to discern between a good ad and a good strategy.

The one thing that you need to be very careful of is having someone convince you to take on extra risk for the possibility of earning a few extra percentage points. The point of "safe" is SAFE, not high yield! (You want to get the returns out of the percentage of your portfolio that is "at risk.") The safe part of your assets has the primary responsibility to not decline in value – even in a recession. And the cool thing is that in 2009, even if you kept almost half safe (really safe, just earning 3% in Treasury Bills and FDIC insured money markets), you could have still racked up 20% total gains with the solid, easy-as-a-pie-chart nest egg strategy that is outlined in the pages of You Vs. Wall Street.

Check out what Nilo Bolden says about keeping her assets safe, in the video blog of May 29, 2010.

What’s the Safest?
Did you know that 140 banks failed in 2009 and 78 have failed so far this year (as of June 1, 2010)? Did you know that the Reserve Primary money market fund broke the buck in September of 2008, meaning that money market investors could not access their money? Sure The Reserve paid most of the money back, but the payments have been made in six installments over the last two years and are only 98.6% paid. So, what are the most protected areas for your money?

What are Relatively Safe Places for your Money?
Let’s face it. If you have more than a quarter of a million dollars in paper assets, it’s time to start diversifying. Below are a few other areas for your money that are relatively safe – provided you do your homework, and make sure that all of your costs to carry are covered and you still have some cushion and a decent return.

Be wary of…

What is not safe?

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 FoxNews, CNBC, ABC TV and has contributed to Forbes.com, Sohu.com and BestEverYou.com and Magazine. 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/Natalie-Pace/416616285568, on BlogTalkRadio.com/NataliePace 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.

Find Alignment Not Balance.

by Alvin Tam.

My wife and I own and operate a yoga-fitness studio called Barefoot Sanctuary that operates out of the largest Whole Foods Market in Las Vegas. We are very lucky to partner and create a community studio space with them because we also have the opportunity to introduce very unique courses into the schedule that we wouldn’t be able to do at other studios. One of those classes is my Handstand Class.

You wouldn’t think that spending an hour on your hands would be an enticing fitness offering, but it’s become quite popular. I’ve had people from all walks, none of them acrobats, come and learn the art of inversion and staying on your hands.

Perhaps the growing success of the class is due to the benefit of getting blood to your head, or the feeling of increasing strength in your shoulders and back but I think the real draw is because it teaches you the actual meaning of finding balance in your life.

Finding balance is a common goal for anyone who is too stressed, too overworked, too tired, and too busy. There are many books and speakers who talk about how to find balance in your life and offer a multitude of tools to do so. Some work and some don’t, but the one commonality of all these tools is that they are all metaphors. They are ideas that you apply to your life by using analogies, symbols, and concepts.

When you learn to do a handstand, however, you don’t deal in concepts or metaphors. You either achieve a balanced state or you don’t. And when you don’t, you fall over. The feedback loop is instantaneous.

When I begin teaching handstands to someone who has never tried it before, I explain that learning to do handstands is not about finding balance, which kind of surprises most people. Learning to do handstands is actually about creating proper alignment.

Think of your body as being divided into three blocks. Imagine that the first block runs from your fingers to your shoulders, the second from your shoulders to your hips, and the last block from your hips to your toes. When you’re inverted in a handstand, your job is to align the blocks on top of each other.

Pretend you are five again and you are playing with a set of Lego blocks. If you put one block on top of the other but put it on the corner, then set the third block on top, again skewed on the corner, your structure might hold only if you secure it with rubber bands and nails. In other words, you’re able to build a tower but it requires additional energy and resources to make it stay.

Another note about balance - you can balance anything, regardless of its shape. Finding balance is really about finding the center of gravity of an object and manuveuring it so that you place its center of gravity directly over its contact point on the ground. If you’re not sure what I’m talking about, try to recall images of acrobats at a circus balancing spinning plates, chairs, or even other people. They are able to balance the object even if it is shaped unusually. (I’ve balanced an unfolded six-foot step ladder, a bicycle, chairs, and people on my chin.)

The lesson is that you can find balance in anything, but that doesn’t mean you want to. What you want to do, especially in proper handstand technique, is to align the body so that balance comes naturally and almost without effort. Then you are using your structure and alignment to maintain your position while using very little energy. You are strong and efficient.

In other words, learning to do a proper handstand is about aligning the three blocks by making sure that your legs are directly over your hips, your hips directly over your chest, your chest directly over your shoulders and your shoulders directly over your hands. It sounds simplistic and it is. It’s simple, but not easy.

It’s not easy at first because aligning all these body parts requires subtle contractions of muscles that you rarely use and stretching of other ligaments that you hardly ever stretch. Most people come into the class with enough strength to hold themselves upside down, but lack the subtle strength and flexibility to position their body in a straight vertical line.

When you finally achieve proper alignment, then finding balance is not really an issue. Since gravity works only in one direction, and if your body blocks are directly on top of each other, then your handstand will be balanced. It can’t and won’t go anywhere. For example, try to balance three wooden blocks when they’re stacked exactly on top of each other. There’s nothing to balance because the alignment makes it balanced.

So, back to the metaphor of life and the issue of finding balance. My suggestion is to stop finding balance in your life and to begin creating alignment instead. Just like the crazy circus acrobats, you can find balance even if your life is a whirlwind with areas that are well over-extended and others that are completely ignored. You can find balance in an out-of-balance lifestyle - it’s just that you’re going to have a work a lot harder to keep it there.

When you create alignment in your life, you begin by identifying your values. Once you know what your values are, you line up three things, just like your body: your thoughts, your actions, and your words.

Having a set of defined values is like gravity to the handstand - you have to know how to position your body relative to the force of gravity. Once you have identified your values, you now also know how to think, act, and speak to align with those values.

Again, the process is simple, but not easy. If you have a life that is chaotic and out of control, then evaluate your ability to follow through with what you say, do, or think. Maybe you don’t fulfill commitments, which breaks your alignment, and forces you to be out of balance. Maybe you smile outwardly at people and cuss inwardly at their incompetence.

Perhaps you do act with integrity but your life is still out of balance. Then consider if your values are yours truly, and if they are reflective of who you are now. Contemplate whether or not you are still living a life based on borrowed values from parents, social circles, or religion.

For example, one of my values is to help people. I remember writing this down on a piece of paper in grade four when we were asked what we wanted to do when we grew up. Since this is one of my core values, I make sure that my thoughts, actions, and words reflect this mission, which is why we have a yoga-fitness studio and I write on personal growth.

So you might not ever come to my handstand class or even try one on your own. I do recommend that you meditate on your values and evaluate your follow through. If you are aligned, then you end up being able to take on more and more work without exhausting yourself or working inefficiently. You experience abundant energy, daily passion for your life - and a sense of balance.

Las Vegas Locals! Join Natalie Pace at her Borders Town Square workshop on June 19th at 2:00 p.m., and receive a chance to win a month at Alvin's Barefoot Sanctuary studio! Other giveaways include: dinner for 2 at Canaletto, tickets to Phantom, a seat at an upcoming NataliePace Get Rich and Enrich Retreat, appetizer cards from California Pizza Kitchen (first 25) and a gift from Sephora (first 25). For directions and additional information, go to the NataliePace.com calendar.

About Alvin Tam
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

Dating is Like the Stock Market.

by Jodi Seidler.

The True Cost of a Date.

In the world of dating over the years, I have noticed many things, and have drawn many conclusions…  I have learned that when you decide to look for love again, feeling the trepidations of the dating market, you can begin by carefully placing your toe in the muddy dating waters. You can test out the landscape by going out with someone ‘nice’, something safe, like Microsoft or General Electric.

You’ll build your dating confidence as you see how what you have chosen performs. You can grow your portfolio wisdom, with experience of dating different types, until you develop more confidence and a sense of who and what fits your lifestyle. Too many people jump in and get hooked on the rush of adrenalin they feel from the wrong type of person, and they run out of steam to find the right one. Take some time and get in touch with your dating investment profile, and see what you can afford to invest emotionally, and be realistic about who you are.

Someone’s stock can rise and fall. Opening the car door for you – up 5 points, texting friends during dinner – down 10. Stocks, like dates, can tank on certain news. In dating, news of an old girlfriend in town, or being seen out with someone else (holding hands) can make your date’s stock tumble. If the news is more severe, there might be no chance of recovery from where you bought in. Take a look at the fallen stocks of Tiger Woods and Jesse James. They may never recover their worth. It’s enough to make you want to quit the market – but don’t…

Earnings are a big deal in the world of stocks and when the quarterly results come out, euphoria or depression is a distinct possibility. The analogy, in the dating world, are birthdays, anniversaries and major holidays (Christmas, Hanukkah). Dating "stocks" can experience wild swings up or down on these events. For example, if the guy forgets his girl’s birthday, even by a day, his stock can zero out to bottom feeder status. On the other hand, if on a particular anniversary, the girlfriend is shocked to see a limo in front of her house about to take her away for the weekend…his stock soars out of control. (But then again, you know this guys!)

And in today’s world, the very best way to begin to date may just be from a friend’s referral. Our friends know us and have a sense of who is right and wrong for us. They certainly have a landscape view of our history and poor choices made.

Putting our faith in friends just may be the best way to find love. Dating a friend’s friend comes with a certain emotional safety that is worth its weight in gold, especially in the beginning of your romantic journey.

And we can all see how high the price of gold has risen over the years.

Jodi Seidler is the Creator of: Making Lemonade - A Community for  Single Parents and Hipster Club - A Hip Community.

Schwab’s Perspective on a Difficult Week.

by Michelle Gibley, Senior Market Analyst, Schwab Center for Financial Research.

May 21, 2010

Stocks plunged roughly 5% on the week in the US on six major themes:
-- The transition from liquidity to solvency and growth concerns in Europe
-- The fate of the largest global growth driver, the Chinese economy
-- The slowdown in the pace of economic growth in the US
-- Government proposals on markets and banks that could slow growth and increase the cost of capital
-- A shift in sentiment toward a flight-to-liquidity and safety from one of risk-seeking
-- Negative technical factors as the S&P 500 falling through the 200-day moving average

After the sigh of relief last week from the $1 trillion Euro-TARP that gave Greece and other troubled nations a less-costly method of accessing funds versus the high interest rates that were being priced into capital markets before the bailout, markets turned their attention to the longer-term implications of the bailout and the realization that the problems that precipitated the euro-area crisis remain.

Market talk centered on the hit to euro-area economic growth that would likely be experienced as governments need to make sharp cuts to spending in order to cut deficits, and as money in stronger nations (namely Germany) is put to more unproductive uses in order to support weaker nations. Additionally, the euro fell to a four-year low versus the dollar as investors believe it is increasingly vulnerable with the ECB’s balance sheet deteriorating in quality by purchasing low-quality debt, and amid the strains of a group of nations that have diverging economic growth and lack of cohesion from 16 different political systems, with some speculation of an eventual break-up in the euro.

News from the euro-area was punctuated with a temporary ban by Germany on naked short-selling—the selling of a security without ownership-of 10 banks and insurers, as well as euro-area government bonds and credit-default swaps, and governmental verbal support for a tax on the financial market sector. The increased pressure on financial institutions was mirrored in the US, as the Senate passed financial regulatory overhaul. Stocks fell as intra-bank lending continued to experience some stresses at the margin and as markets considered the potential for increased cost of capital that could be a consequence of the actions.

Concerns about the potential for a hard landing in China came as local stocks continued to fall and on reports that the property market was experiencing a sharp slowdown after stricter measures were introduced in mid-April. However, most of these themes have been building over the past month, and were not specifically new revelations this week. Schwab’s Chief Investment Strategist Liz Ann Sonders and Director of Market and Sector Analysis, Brad Sorensen, CFA discussed these issues in their latest bi-weekly Schwab Market Perspective: Volatility on the Rise.

The rollover in the Conference Board’s Index of Leading Economic Indicators (LEI), which unexpectedly fell 0.1% in April versus a forecast of a 0.2% rise, should not have been particularly surprising, as Liz Ann and Brad have been noting the potential for this to happen as the economy matures to expansion from recovery, and the V-shape recovery at some point is simply unsustainable. However, the rollover in the LEI in combination with a rise in jobless claims, and concerns about the sustainability of growth in both Europe and China led to a shift in sentiment toward safety from risk-seeking.

While sentiment is "touchy-feely," it does influence markets, as confidence and conviction are needed when investing. With the shift, assets that were the highest beta (high volatility relative to the overall market) and most speculative saw the steepest declines. The potential good news is that optimism has been quickly replaced with pessimism, and as sentiment is a contrary indicator, the best market returns typically come when pessimism is elevated. While the most oversold, high beta areas of the market are likely to rebound the most on a short-term bounce, Liz Ann and Brad have been noting a change in leadership this year that favors large cap US markets. Additionally, for tactical investors, Brad has the consumer discretionary and materials sectors rated underperform, as discussed in Schwab Sector Views: Sea Change?, while keeping an outperform on health care and technology.

Liz Ann and Brad note that investors’ mettle is tested the most when uncertainty is high, but panic is not an investment strategy. The best long-term strategy is to make sure you have a diversified portfolio that is appropriate for your level of risk tolerance and time horizon.

See more from Schwab’s experts at www.schwab.com/marketinsight.

Additionally, you can listen back to Liz Ann’s May 25, 2010 webcast: Schwab Town Hall Webcast, Market Review: Recovery and the Reticent Investor, where she provided an hour-long mid-year look at the economic recovery, the likelihood of a market correction, and global investing, along with Associate Editor for Barron’s, Michael Santoli. Go to: www.schwab.com/townhall.

Important Disclosures

This presentation 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. The types of securities mentioned herein may not be suitable for everyone. Each investor needs to review a security transaction for his or her own particular situation. All expressions of opinion are subject to change without notice in reaction to shifting market conditions.

©2010 Charles Schwab & Co., Inc. All rights reserved. Member SIPC.

Fat Finger and the May 6 Meltdown.

by Natalie Pace.

Includes my Hot News on Cool Stocks List.

10 Critical Lessons.

June 1, 2010

General Stock Market Performance

Wall Street Highs/Lows in the New Millennium:

Hot News on Cool Stocks Important Data
658% gains on U.S. Gold!
NASDAQ Outscored the Dow Jones Industrial Average, 40% to 15%, in 2009
NASDAQ Outscored Gold in 2009, 40% to 26%
81% of the positions listed in 2008-2010 are in the money. Woo hoo!
Gold Tops 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:

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

Forget about Fat Tuesday. In centuries to come, people will still be talking about Fat Finger Thursday, the May 6th Meltdown that saw the Dow drop more than a thousand points. While we still don’t know all of the causes (yet), what we do know is that a lot of people ate their stop losses unnecessarily. The markets dropped so far, so fast that most people still aren’t sure what hit them or how much that day cost them. What we do know is that the losses of May 6th were recovered completely less than a week later, by May 12, 2010.

So, what lessons can you learn from this horrific experience to ensure that you are never vulnerable to those kinds of market gyrations going forward?

10 Critical Lessons from the May 6th Meltdown

1. Stop losses are not a great strategy.
2. Keep enough safe.
3. Avoid the bailouts.
4. Overweight small and medium.
5. Overweight companies founded after 1980.
6. West Coast over East Coast.
7. Innovation over legacy.
8. Stimulus over Bailout.
9. Dr. Seussian Economics over Cronyism Economics.
10. KISS 10 funds.

10 Critical Lessons from the May 6th Meltdown

With Details, details, details….

1. Stop losses are not a great strategy. On May 5, 2010, the Dow Jones Industrial Average closed at 10,868. On May 6, 2010, the Dow closed at 10,520. However, mid-day on May 6, the Dow dropped 1000 points, to 9869 – a loss of 9%. (If the Dow had dropped another point, market trading would have been halted.) If your stop loss kicked in, you lost your investment over a temporary, 30-minute market mystery that still has experts puzzled over the cause. What’s a better plan? A better plan. Read Critical Lesson #2.
   
   
2. Keep enough safe. Always keep a percentage equal to your age in your nest egg safe. Add 10-20% more during recessions and times of market turbulence. Using this simple formula, your losses on the worst Dog Days of the Dow (March 9, 2009), when others were down over 50% from the high of 2007, would have been limited to just 15% if you were 50! In the first scenario, you have to work another 20 years before retiring. In the second, your Buy My Own Island Fund is still flourishing.

For more details on setting up a recession-proofed nest egg, read You Vs. Wall Street and my article, "Nest Egg Rebalancing Plan" from the May 2010 ezine, Vol. 7, issue 5.

3. Avoid the bailouts. You might think this is tricky, but it’s not. With foreclosures on single-family residences and the newest problem area – commercial real estate – at heights never before seen, the financials are not recovering yet (no matter what their earnings reports say). It’s all a slight of hand, bailout, monkey wrenching, duck tape fix that might still fail. What other areas are a problem? Companies founded before 1980, especially those with unions (like airlines, auto manufacturers and municipalities).
   
   
4. Overweight companies founded after 1980. The Information Technology Giants of today, like Google, Apple and more, are not your Dot Com of Y2K. These companies are rip-roaring with revenue, and have no debt and a war chest of cash – totaling more than $26 billion each. Companies that were founded before 1980 thought they could manage retirement plans and health care insurance. Turns out they did a lousy job. And many are carrying the burden of billions in underfunded pensions and other post employment retirement benefits. Combine that with slow growth in a slow economy and you’ve got molasses oozing down a drain.
   
   
5. Overweight small and medium. You can see in the chart of returns at the top of this article that small caps scored 6.5% gains over the last decade, while the Blue Chips (big caps) lost money over that same period. The most recognized and widely held Blue Chip Index had 13% of its companies bailed out (making it the Bailout Index, not the Blue Chip Index). Big caps are stabilizing forces for your portfolio, but I’d rather be anchored with Google, Apple and Australian banks than bailouts and Goldman Sachs. Goldman Sachs is off 22% since the SEC fraud charge hit the press.
   
   
6. West Coast over East Coast. There’s a lot of noise about the deficits of the state of California, but what is happening in the state is not what is happening in the companies based in California, most of which are rich in revenue, carrying no debt and have a war chest of capital for growth and acquisition. When you think of investing, it pays to think of the companies that are making things you actually want to use – like Google, Apple, Microsoft, Netgear, eBay and more. When you think of the cutting edge products and services of today and tomorrow, chances are you’re looking at a Silicon Valley based business.
   
   
7. Innovation over legacy. Re-read points 3-6. Some companies are leading the R&D charge in making cleaner, greener, more efficient products – from hybrids, to solar energy, to phones, to Internet products. Some companies are using their ties with government to stay alive, even while the products are lagging their industry. I’m not saying that we don’t, as a society, want to keep some companies operating, particularly airlines. But you can do that as a taxpayer. As a shareholder, the goal should be taking ownership of great companies and reaping the gain of doing so. Society’s safety net is set up to help those individuals and corporations that struggle.
   
   
8. Stimulus over Bailout. Yes, the economy is bad. But the general rule is ‘follow the money.’ In this case, I’d follow the stimulus funding, i.e. support those businesses that will lead us out of the recession, not the bailouts (those businesses that almost destroyed our great nation). If you’d like to see where the Recovery Money is being allocated, the Obama Administration has a website showing you just that at Recovery.gov.
   
   
9. Dr. Seussian Economics over Cronyism Economics. Just turn off the TV and follow your nose. You’ll do a lot better. When John Stewart told the joke that he’d have a million dollars today by listening to a certain network’s advice -- if he’d started with $100 million dollars, it wasn’t really much of a joke, considering just how wrong the network called so many of the key stories of the last two years.

Instead: Ask yourself, "What are people really buying?" "What do the Toyota owners really think of their cars?" Today’s headlines can tank the share price in the short term, but over the long haul, it is great products and services that make great companies – not headlines, which tend to be biased and oftentimes, dead wrong.

10. Keep It Simple Simon. 10 funds. You don’t need dozens of individual stocks in your nest egg. (That’s called babysitting.) You don’t need dozens of different funds in your nest egg. (That’s called high commissions.) Just diversify with 10 funds, keep enough safe and rebalance annually. Yes, it’s like soup. The less you watch it, the more it cooks. For details on this, read You Vs. Wall Street. Better yet, take three days at my Get Rich and Enrich Retreat to learn the easy-as-a-pie chart nest egg strategies that perform great in bull and bear markets. Walk in without a clue (or with a cracked nest egg) and walk out with a plan that works for the rest of your life.

Now back to the Causes of the May 6, 2010 Meltdown
According to the testimony SEC Chairman Mary Schapiro gave to Congress, the so-called "Fat Finger" hasn't been found (yet) although they are not ruling this out as the trigger of the main event. The trigger event is still a mystery. The SEC, FINRA and other government agencies are sifting through over a billion trades on that day. The terrorist theory was mentioned in Chairman Schapiro's testimony, but she says that to-date there are no indications that was the case either. There is a lot of mention about "the most active and sophisticated traders in today’s market structure [who] are not subject to any obligations with respect to the nature of their trading" – code for hedge funds. Lots of intense scrutiny will be on hedge fund managers, and big-rollers who trade under the aegis of broker-dealers. FYI: stop-losses appear to have had a role, as well... but to what extent has yet to be determined, and stop losses are not the "inciting" event.

You can click on Chairman Schapiro’s name to access the full testimony, or go to SEC.gov.

The SEC is also taking public commentary on the proposed Large Trader Recording System. I encourage you to exercise your right to weigh in on the financial reform that is proposed. You can view a video explaining the need for the records and then comment on the SEC site.

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 – in bear and bull market years. 88 positions listed below – 81% -- have delivered impressive gains over the past two years, even while the Dow Jones Industrial Average is trading lower than it was ten years ago! Only twenty 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: The trend of the Spring Rally is expected to continue until the end of May, and then, if this year tracks the historical trend, the summer doldrums and particularly the Hurricane Season could be hard on the markets.

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.)

5 out of 7 Company of the Year selections more than doubled.  My 2003, 2004 and 2007 Companies of the Year posted up to 9000% gains (Taser), up to 690% gains (Opsware) and up to 215% gains (Suntech Power Holdings), respectively, before we took them off of the list.  2009’s Company of the Year, U.S. Gold, has earned over 800% gains from its low (when we highlighted the company as a buy) as of April 15, 2010 and 55% gains since it was featured as Company of the Year. 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) +600%, 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 there.

This stock newsletter was the first to list the following 911 alerts:

1. 2008 Recession (Get Safe)
2. Trim back on Faded Blue Chips in 2006
3. Get out of Dodge (real estate) in 2005
4. Google at the IPO! (May 2004)
5. 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." In the Federal Open Market Committee press release, the committee members state, "Growth in household spending has picked up recently but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software has risen significantly; however, investment in nonresidential structures is declining and employers remain reluctant to add to payrolls. Housing starts have edged up but remain at a depressed level."

That is Fed-speak for "We are doing everything to stimulate the economy, which should work eventually, but the situation is still rough, folks." Most of the Feds think that inflation is far enough away that Fed Fund rates will remain exceptionally low for an "extended period." There was one committee member who dissented to the language, and it is noteworthy that at the last two meetings and in the last two press releases, the Feds have included a detailed description of his dissent. I find the language of the last clause to be particularly troubling (highlighted in bold). "Thomas M. Hoenig…believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted because it could lead to a build-up of future imbalances and increase risks to longer run macroeconomic and financial stability, while limiting the Committee’s flexibility to begin raising rates modestly." An immodest raising of interest rates would be hard to take…

The next FOMC meeting takes place on June 22-23, 2010.

Second Estimate GDP growth rates for 1Q 2010 were 3.0%, according to the Bureau of Economic Analysis. What caused the pullback from the 5.6% growth of the 4^th quarter 2009? According to the BEA, "The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, and nonresidential fixed investment that were partly offset by decreases in state and local government spending and in residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased."

Final Estimate GDP growth rates for 1Q 2010 will be released on June 25, 2010 at 8:30 a.m. ET. These release days tend to be very active on Wall Street. 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 April 28, 2010 FOMC meeting for yourself? You can. The official Federal Reserve document is available online. Click on FOMC, or go to FederalReserve.gov to read!

The tentative FOMC meeting schedule for the 2010-2011 calendar is: June 22-23 (Tuesday-Wednesday), August 10 (Tuesday), September 21 (Tuesday), November 2-3 (Tuesday-Wednesday), 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. Be the first to know the dates of the mid-month Hot News on Cool Stocks Update and the publication date of our next ezine. Join me on BlogTalkRadio.com. 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. In June and July we will have a series of Tuesday Night Teleconferences on how to protect your investments and prosper in volatile markets. Tuesday Nights at 6:00 p.m. PT. Check BlogTalkRadio.com/NataliePace for dates and call-in instructions.

Get call-in and log-in instructions for the next show at: BlogTalkRadio.com/NataliePace. This is a Q&A format, where you can call in or Facebook in your questions. Be sure to write down your most pressing questions now, and become a fan of Natalie Pace on Facebook at http://www.facebook.com/pages/Natalie-Pace/416616285568, so that we can interact on Facebook during the show.

3. Survey Results:
Each month we have three new surveys so that we can stay in touch with your needs and desires. Cast your vote on our survey page! This month we want to know what Dad really wants for Father’s Day. Check it out to get your gift-giving right. And Dads, please weigh in so we know what to buy.

4. Euro interest rates: ECB rates are at 1.00% (main refinancing), 1.75% (marginal lending) and 0.25% (deposit facility). The next meeting and interest rate announcement is scheduled for May 20, 2010 at 2:30 p.m. CET. (June 10, 2010 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.
None
(We are heading into the summer doldrums. Plus June has been a negative month on average for the last decade.)

Profit-Taking:
Hoku Corp. (HOKU) +54%
LDK Solar (LDK) +17%
U.S. Gold (UXG) +658%

DELETIONS (Take your profits early and often):
Green Dot (Moved to the Watch List on 5.15.10)

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!

Recently Deleted from the Hot News list:
None

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:
Green Dot (added 5.15.10)
Tidewater (added 6.1.10)

Recent Deletions:
Netflix (NFLX) (moved to Cooling Off List on 5.15.10)

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):
Baidu (BIDU)
Netflix (NFLX)
Transocean (RIG)

DELETIONS:
None

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:

Oil Spills. Market Nose Dives. Hurricane Predictions. Help! Get the Solutions You Need.

This month, due to all of the crises and disasters, we’ve taken action to make solutions and answers readily available to you. There are two series of FREE, interactive Tuesday Night teleconferences discussing easy strategies to get safe and prosper in volatile markets. Learn what is really happening with the oil spill (and which companies are responsible for the disaster and the cleanup) and secure your assets before hurricane season. See below for details.

Easy as a Pie Chart FREE Teleconference
Tuesday, June 1st, 2010
6:00PM through 6:30PM PT
Fat finger May 6th meltdown. The worst oil spill in history. What is happening? Amidst all of the chaos and headline horrors, there is a strategy for your survival that is easier than you think. Buy and hold and blindly checking off the box doesn't work in today's wild stock marketplace and hasn’t worked for the last decade. (We’ve had the DOT COM bust, the real estate bust, the bailouts and the Great Recession in the last ten years.) However, Modern Portfolio Theory, avoiding Bailouts, adding Hot Industries and annual rebalancing does. Learn these easy-as-a-pie-chart investing strategies that work great in bull and bear markets. Call-in Number: (347) 215-7305. Log onto: http://www.blogtalkradio.com/nataliepace.

Directors Forum, Boston, MA
Wednesday, June 2nd, 2010
8:00AM through 2:00PM
4th Annual Directors Forum brings together board directors for a day-long edu and networking session. Keynote is: Vijay "VG" Govindarajan, Dartmouth College Professor and Chief Innovation Consultant at GE.

Money While You Sleep FREE Teleconference
Tuesday, June 8th, 2010
6:00PM through 6:30PM PT
You could have kept half of your nest egg safe and still earned 20% gains in 2009 (and there were just as many horror stories and market meltdowns in that year as there are today). Learn how! FREE. Call-in Number: (347) 215-7305. Log onto: http://www.blogtalkradio.com/nataliepace.

Natalie Pace at Borders, Las Vegas, NV
Saturday, June 19th, 2010
2:00PM through 3:30PM PT
Natalie Pace will lead a fun, interactive, visioning game that asks (and answers) the question, "How would you live if you had all the money in the world." Come play with us and WIN! We have give aways from California Pizza Kitchen and Sephora for the first 25 people to show up. Additionally, enter a chance to win dinner for two to Canaletto, tickets to Phantom, a month at Barefoot Sanctuary and a seat at an upcoming Natalie Pace Get Rich and Enrich Retreat. Tell your friends and bring a friend!

Father's Day!
Sunday, June 20th, 2010
Wonder what Dad really wants? Check out our survey on the home page.

Summer Solstice
Monday, June 21st, 2010
Celebrate the dog days of summer, when the Earth is tipped closest to the Sun.

Getting Started Budgeting and Investing. FREE Teleconference
Tuesday, June 22nd, 2010
6:00PM through 6:30PM PT
Wonder how to protect your nest egg in today's crazy marketplace? Learn the ABC-123 basics in this half hour call. Learn how in this FREE teleconference. Ask questions and get answers! Call-in Number: (347) 215-7305. Log onto: http://www.blogtalkradio.com/nataliepace.

FOMC Meeting
Tuesday, June 22-23, 2010
9:00AM through 11:50PM
The Federal Open Market Committee meets to determine Federal Reserve policy in the U.S. Two-day meeting June 22-23, 2010.

Women in Biz National Conf. and Biz Fair. Baltimore, MD
Tuesday, June 22nd, 2010
5:00PM through 5:00PM
Sheila Johnson, billionaire and first African American woman to build a luxury hotel, will keynote this conference. Sheila also owns the Washington Wizards, so hit her up for NBA tix! Bestselling author Suzy Welch will keynote the following day.

Easy as a Pie Chart FREE Teleconference
Tuesday, June 29th, 2010
6:00PM through 6:30PM PT
Fat finger May 6th meltdown. The worst oil spill in history. What is happening? Amidst all of the chaos and headline horrors, there is a strategy for your survival that is easier than you think. Buy and hold and blindly checking off the box doesn't work in today's wild stock marketplace and hasn’t worked for the last decade. (We’ve had the DOT COM bust, the real estate bust, the bailouts and the Great Recession in the last ten years.) However, Modern Portfolio Theory, avoiding Bailouts, adding Hot Industries and annual rebalancing does. Learn these easy-as-a-pie-chart investing strategies that work great in bull and bear markets. Call-in Number: (347) 215-7305. Log onto: http://www.blogtalkradio.com/nataliepace.

Money While You Sleep FREE Teleconference
Tuesday, July 6th, 2010
6:00PM through 6:30PM PT
You could have kept half of your nest egg completely safe and still earned 20% gains in 2009 (and there were just as many horrific headlines last year as there are today). Learn how in this FREE teleconference. Bring your friends. Call-in Number: (347) 215-7305. Log onto: http://www.blogtalkradio.com/nataliepace.

Get Rich and Enrich Retreat, Santa Monica, CA
July 23-25, 2010
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 boardroom setting, learning investing directly from Natalie Pace, sets you up for life. There are only three seats remaining in this intimate, boardroom retreat. Call 866-476-7442 to register NOW!

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