investments

Saving Money Into 529 Plan

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OK, if you have already opened a 529 plan, and you have chosen which investments to use in your 529 plan, then the next step is to actually start getting money into your college savings account. And, it is here where the most important thing about saving money for college comes into play. The most important thing, more important than choosing the right college savings plan, more important than choosing which investments to use in your college savings plan, and more important that updating your higher education financial plan, is consistently automatically investing money in your college savings accounts. Let me go into a little more detail, it’s that important. We get caught up in the notion that what matters when saving or investing money are things like investment returns, taxes, using the right account, or getting the right financial advice. None of those things matters nearly as much as consistently investing more money. When I was a financial advisor some of the biggest 401k accounts, or 457 plans, I ever saw were from people who didn’t know a thing about them. These people opened the account when they were hired, set some sort of amount to contribute, picked an investment, or …

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What Do Stock Market Records Mean?

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Both the Dow Jones Industrial Average and the S&P 500 closed at all-time highs on Friday. It seems that every week brings new record-breaking highs for the Dow and the SP500. The question is, what do all of these record highs mean. Should an average investor do anything when the stock market hits a new record? What Is a Stock Market Record High? Let’s start with the basics. While individual stocks on the stock market are going up and down based on their own merit, and supply and demand, the stock market is often reported as a single thing. What financial reporters and analysts mean when they say “the stock market,” is one of the indexes of the markets. There are numerous indexes, but the most widely touted are the Dow Jones Industrial Average and the Standard and Poors 500 index. When people say the stock market broke a record high, they mean that one (or both) of those indexes is higher than it has ever been. (You can’t invest directly in the indexes, which are just academic, mathematical statistics, but you can get close using index funds.) In a way, higher records are inevitable. Even if the intrinsic value …

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iPhone 6 and Apple Stock

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I wasn’t going to write this post, but I’ve gotten just enough emails and messages on the subject of what the new iPhone 6 and iPhone 6 Plus means for Apple stock that I thought I’d post some quick thoughts for readers here. First, the old saying in investing is to buy the rumor and sell the news. As with all Wall Street wisdom, this is a gross oversimplification and only partially true. However, consider that the time to buy the POTENTIAL of the new iPhone and Apple Watch was BEFORE the big event. The risk, of course, was that if the information was disappointing, the stock would have likely taken a  downturn. As it was, people, and analysts, seemed pleased with what they saw, and the stock has already reacted positively. What this means, is that if you wanted to invest for the short-term based on the fact that felt Apple’s new technology would be good, you are too late. Now, if you are looking to invest in Apple NOW, for the short-term, your investment will depend on: a) How well the products are received by the real consumer. – Potential risks here involve a new “antenna-gate” type of …

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Investing Scams Newsletters

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Scamming investors is a very old practice. Way before a centralized stock market institutionalized the dreams of investors looking to get rich, there were unsavory tricksters looking to pray on those dreams. Are Investing Newsletters Scams? Not all newsletters are scams. However, it is important to remember that even legitimate newsletters seldom have a solid, long-term, track record of beating the market. The statistics and returns are often carefully calculated in the just the right way as to show the newsletter in the best possible light. For example, a newsletter may only report it’s “best picks” returns. This allows a retroactive look at what the “best picks” were. For newsletters that are scams, there are some useful ways to spot them. Other FinanceGourmet articles on finance schemes: Credit Karma Is a Scam? Is Quizzle a Scam Is Credit Sesame Safe? FAFSA.com scam First, a legitimate newsletter won’t promise the sun and the moon, especially, after you have subscribed to it. Companies frequently boast a little big when they are advertising to new customers. However, once you buy that new car, the manufacturer doesn’t include a section in the owner’s manual about how to beat a fighter jet in a drag …

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Mid-Year Review 2014

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Here it is, June 2014, the middle of the year. So, what do things look like for your personal finances in 2014 at the half-way point? Let’s jump right in and find out. 2014 Taxes You’re going to pay taxes in 2014, and in every year until you die. Right now, is a good time to handle a few tax issues before the second half of 2014 gets rolling. First, use the IRS withholding calculator to see if your tax withholdings are set properly. Grab a paystub and enter your information for so far this year. Add in a best guess of your various income tax deductions, or use last year’s tax forms to make estimates. Of course, if you prefer, you can use the 2014 standard tax deduction rate as well. Either way, if you are way off on your withholdings (you’ll owe a fortune, or get a fortune back as a refund), it’s time to submit a new W4 form to your employer. Grab your nearest HR person and ask for one, or just get one from the IRS website and turn it in. You only need the bottom part and filling in the worksheet is not necessary, …

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Apple Earnings Dividends and Stock Split

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Apple is one of those companies that draws more than its fair share of attention. There are both the so-called fanboys, and plenty of haters out there to talk at high volume whenever the company does anything. However, the company is also a key component of the S&P 500 and most NASDAQ indexes. In other words, what Apple does as a publicly traded company matters to your personal finance. Apple 2014 Q2 Earnings You’ve probably seen the news by now. Apple had what many analysts are calling a blockbuster quarter. In particular, analysts were surprised by the increase in Apple’s revenue for the quarter. In a way, this is just further proof that analysts don’t really have any sort of crystal ball that regular investors don’t. Apple long ago stopped giving guidance to Wall Street. Without that guidance, Wall Street really doesn’t have a clue how things are going for Apple beyond what things like channel checks can tell them. If you want to read about Apple’s second quarter earnings, there are several reasources including Marketwatch, and Apple’s investor relations website. However, for long-term investors in Apple stock, the quarterly earnings are not the story. What is the story is …

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What Are Expected Earnings?

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It’s earnings season again, and interest in running high in many companies including technology giants like Amazon, Apple, Facebook, and so on. With each earnings report, there is typically commentary noting how the company’s actual reported earnings ended up comparing to the expected earnings. This phrasing comes up so often, that most investors are used to the terminology long before they actually make any investments, but it is useful to understand just what expected earnings are, and who it is that generates those estimates. How Companies Report Earnings Publicly traded companies are required to issue financial reports about their company on a regular basis. These earnings reports are generated and published each quarter. In addition, companies generate an annual financial report, which typically accompanies the fourth quarter earnings report. There are very specific rules that govern when and how a company can disclose “material information.” A company’s financial information is most definately material. The basic rule is that companies may not make any disclosure of material information without doing so publicly. Just what counts as public has evolved slowly over the last few years, but the basic point is that all investors must get the same information at the same …

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Is Microsoft a Good Investment Now?

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Like many others in both technology and finance, I haven’t really looked at Microsoft as more than a staid company in a long time. However, recent events have necessitated a re-examination of the company. Is Microsoft a Buy or Hold? In the fantasy world of investment recommendations and analysts, buy, hold and sell, don’t really mean anything. Wall Street firms are reluctant to rate a stock as a sell lest it hamper their chances of getting investment banking business or other lucrative fees from the covered companies. Thus, most investors know that a “hold” rating is pretty much a sell rating. That doesn’t leave much room, so analysts added ambiguous ratings like Market Perform, and Overweight, among others. Whether or not it’s smart to invest in Microsoft depends, as always on your goals and risk tolerance. That being said, certain recent moves have made Microsoft an attractive play for an investor looking for a technology sector investment. First off, Microsoft is a company in flux. Two seismic level events this summer make any investment in the corporation a bit of a leap of faith. The CEO, Steve Ballmer is retiring. Truthfully, there aren’t many who are losing any sleep over …

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What Is Going On with Apple Stock?

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There has been a lot of news about Apple stock lately. From the company’s swoon from an Apple stock price in the 700s down to the 400s in just months, to the company’s recent earnings report, to the new Apple plan to issue debt to pay shareholders dividends and buyback stocks. Is this good news for Apple? Is Apple stock a good investment now, or is this all a prelude to a big Apple stock price crash? What’s Wrong with Apple Stock? Years ago when I was a financial planner in Denver, I advised a lot of people who worked at Qwest. For those of you who don’t remember how the internet bubble worked, it went a little something like this. First, people decided that the internet was an amazing new technology. They weren’t wrong. Then, they decided that every company that had ANYTHING to do with the internet was therefore a great investment. This was very wrong. Qwest provided a certain kind of telecommunications link that was very important to the internet. It used its stock to buy a “real” company with real earnings, namely US West before the whole internet bubble blew up. During the good ride, it …

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Investing in GE Dead Money?

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The world of investing can seem black and white, even though nothing could be further from the truth. Particular investments made for one purpose by one investor are made for a completely different reason by another investor. Furthermore  what is a “good investment” for one investor is flat out dumb, for another. This is what makes the various Buy, Sell, Hold recommendations from stock analysts kind of difficult to take seriously. JP Morgan Cuts GE Rating The reality is that investors of all kinds who want to use investment analysis from financial firms need to carefully read the entire text, not the headlines that get carved out by various news organizations. The reasons for cutting or raising a rating on a stock may have nothing to do with your investment goals, making those one-word ratings meaningless to you. Today, Marketwatch, and others report that JP Morgan cut its rating on GE stock from overweight to neutral. Most intriguing is the line in which the company calls GE stock, “dead money.” Dead money, in case you are unfamiliar with the term, means that the money is not growing or earning anything, while it could be earning money elsewhere. In particular, dead money …

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