By 2 Cents on March 28th, 2011 | Category: Career |  There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.
~ Nelson Mandela
Since the inception of Balance Junkie, I’ve been pretty cautious on investing in stocks, at least partly because of the nature of our income. With the exception of the first few years of our married life, we have been a single income family, with my husband as the primary earner. Even when I earned income after our sons were born, it involved working as a self-employed assistant to my husband. That’s not exactly a diversified income stream.
When you couple the single income situation with the fact that my husband’s earnings were basically 100% commission, I felt like that was enough uncertainty for our balance sheet and I didn’t want to throw in the elevated risks inherent in equity [...]
Read on and enjoy … Risk Is Relative
By 2 Cents on March 23rd, 2011 | Category: BJ News |  Continuity gives us roots; change gives us branches, letting us stretch and grow and reach new heights.
~Pauline R. Kezer
Spring has finally arrived, bringing with it all kinds of changes. We’ve had quite a few changes come up at my house over the past couple of weeks too. I’ll spare you the details, but the end result is that I won’t be able to write as regularly or as often here at Balance Junkie. For now, I’m committed to writing at least once a week instead of the three times per week you’ve been accustomed to. I may write more or less depending on time constraints.
I’ll continue to follow the economy and financial markets and you can expect the same type of articles on anything from monetary policy to book reviews to basic personal finance topics. I’ll also continue to point out interesting articles in my [...]
Read on and enjoy … Balance Junkie Update: Changes Coming
By 2 Cents on March 21st, 2011 | Category: Economics |  If it keeps on rainin’, levee’s goin’ to break . . . Cryin’ won’t help you, prayin’ won’t do you no good.”
~ Led Zeppelin, “When the Levee Breaks”
Having taken some time off over the past week, I have yet to comment on the latest wave of crises buffeting the global financial system. I’ll throw my two cents into the mix today.
When subprime mortgages started to unravel in 2007 and 2008, I couldn’t get the Zeppelin classic “When the Levee Breaks” out of my head. I have the same feeling again as I watch global leaders try to minimize, juggle and contain a growing collection of economic threats.
The markets had been rallying relentlessly throughout the dawn of 2011 in spite of growing civil unrest across the globe, particularly in the MENA (Middle East North Africa) region. [...]
Read on and enjoy … When the Levee Breaks
By 2 Cents on March 16th, 2011 | Category: Investing |  The following is Part Two of a two-part guest post from Rob Bennett. The first part (How to Use Valuation-Informed Indexing – Part One) was published on Monday.
(Schedule Note: I will be taking Friday off, so there won’t be a new post until Monday.)
The valuation metric (P/E10 — the price of an index over the average of its last 10 years of earnings) used in The Stock-Return Predictor to identify the most likely long-term return is research-tested. It has worked well for the entire 140 years of U.S. stock-return history available to us. For example, research by Wade Pfau, Associate Professor of Economics at the National Graduate Institute for Policy Studies in Tokyo, Japan, reports that Valuation-Informed Indexing beat Buy-and-Hold in 102 of the 110 rolling 30-year [...]
Read on and enjoy … How to Use Valuation-Informed Indexing — Part Two
By 2 Cents on March 14th, 2011 | Category: Investing |  The following is Part One of a two-part guest post from Rob Bennett. I asked Rob a couple of questions in a comment the other day and he was kind enough to answer them in the form of these two articles. My thanks to him for taking the time to do this. I found this information to be very informative and I hope you will too. Part Two will appear on Wednesday, March 16, 2011.
I advocate Valuation-Informed Indexing. This investing strategy is the alternative to Buy-and-Hold.
Buy-and-Hold is rooted in the research of University of Chicago Economics Professor Eugene Fama and assumes that overvaluation is a logical impossibility; thus, it posits that investors need not change their stock allocations in response to price changes. Valuation-Informed Indexing is rooted in the research of Yale University Economics Professor Robert Shiller and assumes that valuations affect long-term returns; thus, it [...]
Read on and enjoy … How to Use Valuation-Informed Indexing — Part One
By 2 Cents on March 11th, 2011 | Category: Carnivals | Best Personal Financial Planning and Personal Investment Articles this Week from Personal Finance Blogs
Carnival of Financial Planning – Edition #175 – March 11, 2011
Welcome to the March 11, 2011 Edition #175 of the Carnival of Financial Planning.
The Carnival of Financial Planning takes a long-term view of personal financial planning for individuals and families. We focus on efficient and sustainable personal financial planning practices that can lead to lifetime financial security.
This edition is arranged by subject heading, so that you can browse efficiently.
Enjoy!
The Skilled Investor, Editor
Budgeting and Economics
The Financial Blogger presents What We Can Learn From The Financial Crisis posted at The Financial Blogger, saying, “What the recession has shown us about money management.”
Intelligent Speculator presents Is Facebook’s $75 Billion valuation getting out of hand? posted at Intelligent Speculator, [...]
Read on and enjoy … Carnival of Financial Planning – Edition #175
By 2 Cents on March 9th, 2011 | Category: Investing |  Patience and perseverance have a magical effect before which difficulties disappear and obstacles vanish.
~John Quincy Adams
Inflation has been in the headlines a lot lately. Many point to food price spikes as a key factor in the eruption of bloody protests in the Middle East and North Africa. Instability in these regions has only added to inflation concerns as it has caused the price of oil to surpass the psychologically important $100 per barrel mark.
I recently wrote about where Canadians should invest if inflation rises and I included Real Return Bonds (RRBs) as an option. These are inflation-protected bonds issued by the Canadian government. They are analogous to the Treasury Inflation Protected Securities (TIPS) issued by the U.S. Treasury.
If you follow the financial markets at all, you likely noticed that bond prices have taken quite a [...]
Read on and enjoy … Inflation Protection: Are Real Return Bonds or TIPS the Answer?
By 2 Cents on March 7th, 2011 | Category: Investing |  At high tide the fish eat ants; at low tide the ants eat fish.
~Thai Proverb
Stocks, bonds and cash are the three asset classes that most people consider to be the foundation of an investment portfolio, with stocks representing the most risky choice and cash, the least. Where do GICs fit into the mix? Some consider GICs (the Canadian version of U.S. CDs) to be part of your cash allocation. Others argue that many GICs don’t qualify as cash because you can’t always get instant access to your money. Some GICs are cashable, but you have to forfeit some or all of your interest earnings to get your money out.
In many ways, GICs are very similar to bonds. You invest your money for a fixed amount of time. You collect interest periodically throughout that period of time, and receive your [...]
Read on and enjoy … Are GICs a Good Substitute for Bonds?
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