Pond's Investment Commentary
and Smart Money Tips
For the Week of January 11 to 17, 2010
2010 Opens Well for Investors
For the superstitious amongst us who think that the performance of the stock market in the first week of the New Year portends the direction of stocks for the rest of the year, you have a lot to cheer about. Stocks rose smartly last week and for several good reasons, including encouraging manufacturing activity and auto sales reports. Retailers also surprised with better-than-expected holiday sales. Even the unexpectedly poor jobs report on Friday couldn't derail stocks. While January stock performance is a pretty reliable indicator of yearlong performance, it is far from perfect, so don't use last week's strength convince you that stocks are the only place for your money this year.
Advice for Investors Luxuriating in Their Stock Gains
Stocks have risen over 50 percent since last March. If you have set a target percentage of stocks that you want to maintain, chances are that your portfolio now has a higher percentage of stocks than your target. (If you haven't yet established a target percentage, you should do so. It will keep you out of a lot of trouble later on.) Rebalancing your investments back to your target percentage will involve reducing a bit of your stock holdings. That's what's known as "selling high," since stocks are now a lot higher in price than they were a year ago. Rebalancing by lowering your stock exposure a bit has been a very smart thing to do in past rising markets. If you have a retirement savings plan at work, chances are you can rebalance your investment holdings automatically.
Smart Money Tips
Increase your retirement plan contributions at work. Even if you make a small increase in the percentage of your pay that is contributed to your 401(k), 403(b) or other workplace retirement savings plan, you'll reduce your 2010 tax bill. If you haven't started participating in your plan at work, do so now - don't delay.
Beware of reverse mortgage sales pitches. At last, the many pitfalls of taking out a reverse mortgage are starting to be publicized. The advertisements are alluring, but they don't tell the whole story. Unscrupulous salespeople are pitching them as a panacea to unwary retirees. Reverse mortgages can work in some instances later in life for retirees who want to remain in their home but need more income. But this is a very significant action that requires careful consideration.
Food for Thought
Most great men and women are not perfectly rounded in their personalities, but instead people whose one driving enthusiasm is so great it makes their faults seem insignificant.
-Charles A. Ceram1
Money Can Be Funny
Money talks but all mine ever says is "goodbye."
Word of the Week
Presenteeism - The practice of being present at one's place of work, especially for more hours than required by one's terms of employment. The opposite of absenteeism.
Given the rumors of impending layoffs, presenteeism is running rampant in our company.
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On behalf of SBLI of Massachusetts, the "No Nonsense Life Insurance Company," I will be hosting a Web seminar this Thursday, January 14 covering my "10 Smart Money Strategies for 2010." I'll also be taking questions. For more information and to register, visit:
I hope to "see" you on January 14.