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Happy Hour: QE Hints And Amateurs

May 17, 2013

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Jon

Welcome to the end of the week and another edition of Happy Hour! Just sit back, relax, and enjoy your end of the week roundup of all things interesting in the land of money.

QE Hints

It’s the most anticipated event in years. When is it? How will it happen? What are the consequences? The idea that anything financial lasts forever usually gets people in trouble. While we all have our views of QE infinity or unending QE, I hope you didn’t take it literally. I vaguely remember folks believing the same with housing prices and dot-com stocks. But I digress. Continue Reading…
Stocks For The Online Streaming TV Evolution

May 16, 2013

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Jon

There was time when families would hunker down around the TV to watch the big show of the night. It was a bit more black and white back then, literally, and the only competition was radio.

The business model was simple – consumer get free media in exchange for advertisements during a show. Technology brought a few changes over the decades. The basic business model evolved with it. Cable companies emerged and for a monthly fee you could get more channels and shows. Those networks still got paid from advertising, only now they get a piece of the subscription fees too.

To that end, it’s been successful for the past decade. When given a choice between rabbit ears or the cable monopoly or duopoly, they pay. Continue Reading…
5 Best Short Term Investments Right Now

May 14, 2013

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Jon

When you invest money for a short-term goal, taking extra risk is like playing with fire. Since you don’t know what might happen in the markets in the next few years, it’s best to keep things in perspective. The best short-term investments don’t lose you money when you need it most.

First, let’s define short-term as any time in the next five years. This should give you a good idea of a time horizon that fits with a short-term savings goal like a vacation, home down payment, a wedding, or college savings.

Ultimately, you need to base your decision on your time horizon, the amount of money, and how much risk you’re willing to take. Though, I’d caution on overreaching for returns. The idea of taking more risk just to squeak out an extra tenth of a percent makes no sense. The last thing you want is to send little Joey off to college only to find out that your savings fell short because you lost money in the past year. Continue Reading…
Happy Hour: BRK Meeting And Record Highs

May 10, 2013

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Jon

Welcome to the end of the week and another edition of Happy Hour! Just sit back, relax, and enjoy your end of the week roundup of all things interesting in the land of money.

BRK Annual Meeting

Omaha filled its tourist quota last weekend with the highly anticipated Berkshire Hathaway annual meeting. It’s like a value investors theme park vacation with all the excitement and hoopla without roller coasters.

Of course, it wouldn’t be a BRK annual meeting without some Buffett and Munger highlights and general investing perspective. Out of all the information available, I came across three that summed it up the best. The first is a transcript of the Q&A session from Valuewalk. It’s worth the read just for the Munger quips. The second is a collection of takeaways and impressions from the meeting by other investors. The last is included below. Continue Reading…
Anatomy Of Market Interest Rates

May 9, 2013

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Jon

Interest rates play a big role in your finances. It affects everything from savings and money market rates, bond yields, mortgage rates, credit card rates, and even how you value a company and it’s stock price.

How market interest rates are set and the factors involved all play a role in what you earn on investments and pay on loans. It starts with monetary policy and the Federal Reserve.

Who Sets Interest Rates

The Fed uses monetary policy to manage the economy. When you here about the Fed printing money, it’s trying to increase the money supply to lower interest rates and increase lending, spending, and inflation.

To do the opposite, the Fed changes the federal funds rate. The federal funds rate is the rate banks charge other banks to borrow money. So a higher federal funds rate will lower the money supply and decrease lending, spending, and inflation. Continue Reading…
Busting 5 Safe Investing Myths

May 7, 2013

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Jon

There are a number of investing myths that lead investors astray all the time. Sometimes it’s sound advice that fails under specific circumstances. Other times it’s just plain wrong. Either way, it leads to investors making mistakes and taking unnecessary losses.

Safety In Cash

There is safety in cash or so the saying goes. A good online brokerage account includes money market rates on any money you don’t invest. If rates weren’t so low, this investing myth would be sound advice.

Cash not growing at a rate equal to or above the inflation rate is a losing venture. You may not lose money in the sense of having less dollars, but you will lose purchasing power. If you don’t believe me, toss $100 in a mattress and in twenty years see how far it gets you compared to now. Continue Reading…