Benefits and Risks of Online Mortgage Application

If 1 is thinking to apply for a mortgage, then he/she should go to complete an online form due to the fact online mortgage applications are easily available, simply completed, as well as certainly safe. Applicants can fill a form online and can save time as well as energy instead of waiting for a bank to send habitual forms, filling them out, mailing them back, and then waiting to hear from a loan representative. Applicants want to offer their effort and their future home to God Before doing this.

If 1 is a home buyer, then he/she will additionally would like to make sure the internet site is secure as online mortgage applications want them to enter personal information. There will be concerns about identity stealing as well as other kinds of fraud which are legal. There is always a symbol on the Web page that contains the form that indicates that it is a secure page. This safety symbol can either be a little locked padlock or perhaps a gold key in the lower left-hand or perhaps reduce right-hand corner of the computer screen (that depends on Internet browser which you is using). This safety symbol identifies that whatever the information is transmitted by mortgage application is secure.

However, consumers should ensure that the lending business is legal just as with other electronic business transactions. One must contact the Better Business Bureau for information about unresolved complaints for particular companies. Also get referrals about companies which provide internet form by talking with friends, family members, as well as contacts. Purchasing a home is definitely not simple; it is a very big pledge. Home buyers should be comfortable with every pro in the entire process.

Almost all lenders have online mortgage applications that are easily reachable through their websites. If we compare this process with the process which was before pre-internet days, then it is easy as well as extremely fast compared to the pre-Internet days of setting up appointments with lenders as well as filling out piles of forms.

The Internet form just asks for related information, like name, requested loan amount, and the state that the home is found. Online form, applicants answer the questions right there. Such part of process just needs five minutes.

There are many companies which offer Internet forms, then assess the information and present an approval decision inside minutes. As soon as approval statement is received, applicants have to fill many more detailed forms. Then a representative of the business will contact them to claim the online mortgage application further.


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11 Business Lessons Steve Jobs Taught Neil Patel

Apple has lost a visionary as well as creative genius, the world has lost and amazing human being.

Apple fanatics were shocked to hear that Steve Jobs died Wednesday at the age of 56. People will keep in mind him as 1 of the greatest visionaries ever. The former Apple CEO was a visionary in the world of computing as well as is mostly responsible for the level where computers are integrated with our everyday lives. There’s a good chance that we re reading this post on a computer, tablet, to smartphone that Jobs either invented or perhaps inspired, and that’s something that is unique to his legacy.

Just what he did for the technological and entrepreneurial world, will never be forgotten. He surely taught business lessons to young and old entrepreneurs alike.

Neil Patel, the co-founder of 2 Internet companies: Crazy Egg as well as KISSmetrics, who also helped large businesses such as Amazon, AOL, GM, HP and Viacom make more income from the web, shares 11 business classes Steve Jobs taught him.

11 Business Classes Steve Jobs Taught Neil Patel:
1. People Thing, Not Feature
2. There’s Nothing Incorrect With Pre-Selling
3. Keep it Easy, Silly
4. Think Big!
5. Focus, Focus as well as Focus Many More
6. Create an Ecosystem
7. There’s Usually Room for Innovation
8. Be Passionate
9. Not Lose Your own Investors Revenue
10. You re Absolutely nothing Without The Team
11. Don’t Forget Regarding Your Friends as well as Family


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Best Companies For Mortgage

Home loan mortgage companies are expert at leading home buyers through the complex maze of real estate legalities, liens, and liabilities-all the method to property ownership. To bring together lenders and borrowers, a stockbroker in a home loan mortgage company is paid, same as a talent scout, regularly evaluating credit situation of a buyer and matching him to the right lender. Brokers tender application of home buyer to more than one lender.

After the process of choosing the lender is done, the broker stays through the process till the financing deal ends. It is a good plan for a buyer of potential property to see just what terms are provided and store around for the best sensible way as brokers are working for the best deal for the lender. It is additionally possible that an interested party may would like to work with over one brokerage group. Although there can be multiple options from that a broker can choose. He is not needed to discover the best contract for the buyer unless or until he is acting additionally as a purchasing agent.

Such type of brokerage groups are neither banks nor credit unions. For the funding program originated by employers of bank, officers in a bank market and process applications for housing.

The options offered by companies of home loan mortgage will sound same but the selection of rates is reduced.

Here we present the difference. Any kind of company which is home loan mortgage is local to online, which finds the buyer a lender that is anywhere in the country. A lender that is outside of the buyer s community, will process the mortgage more leisurely than those that know the particular real estate area best. Simultaneously, it is also true that the lenders that are far from you can accept a wider range of dangers associated to credit. One will find the specialized sales in many brokerage agencies. Whenever negotiating with any mortgage brokerage firm, it pays to question issues such as processing time and repayment terms.

Many of the time, it is not obvious whether or not a buyer is dealing with a broker or perhaps a real lender. The purchaser may have to inquire; it is definitely not usually stated as well as in the information collected, the buyer will get a hint that is being paid a large amount of fees. Purchaser will be paying off a home loan to the mortgage business employee for their services, when he pays “points” during the finance closing or in combination with the interest rate. That is precisely why it is essential to store around for different kinds of home loan mortgage companies.

Fees are normally estimations that can be discussed. But at the same time, 1 must be familiar with terms such as title abstract of title, examination fees, property survey, document, as well as recording fees that will help the buyer to discuss options on an even playing field with the brokerage representative.




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Best Financial Investment Advice - Find It Fast

Lookin for financial investment advice does Definitely Not have to be confusing. There are places online that can point we in the right direction, along with people who can give you just what we want.

You no longer have to worry regarding the different people and places eager to give your their spin (excluding this website, of course!).

A personal financial advisor is a financial expert that is paid to offer customized financial investment information, based on your unique set of circumstances.

This is a very broad category, as well as can cover many different backgrounds, certifications, and degrees.

You've probably heard of a few: MBA, JD, CPA, CFP. But just what regarding an "Accredited Financial Counselor", or perhaps a "Chartered Financial Consultant"? You have probably never heard of either of them, allow alone know the differences between the 2. How can anyone know that is the "right" choice?

Fear definitely not...read on.

There are two types of financial investment advisors: Fee-only as well as Commission-based. "Fee-Only" financial advisors are compensated just by we as well as other clients. The advisor does not receive anything (commissions, discounts, other incentives, etc.) on the buy a ?financial product? such as a mutual fund or perhaps stock.

"Commission-Based" advisors are compensated by a percentage of the amount you choose to invest to size of the portfolio they manage. There are possible conflicts of interest due to the fact they make funds when you buy something, whether or perhaps definitely not it is a good ?fit? for the situation.

A second consideration is the fact that fee-only advisors put your own interests before their own, whilst those that are commission-based have a legal responsibility to represent their employer first.

The best place to begin the search is with the National Association of Personal Financial Advisors (NAPFA).
NAPFA is an American trade business, created for fee-only advisors. There mission, as stated on their website, is:

"To promote the public interest by advancing the financial planning profession and supporting our members consistent with our core values."

In order to be a member of NAPFA, personal financial advisors as well as investment specialists should meet a strict set of expert standards. This is done through the process of peer reviews for a potential candidate?s work (e.g. comprehensive financial program for a client).

The plan must cover the common needs of many people as well as families, including:

• Goals and objectives
• Net value statement
• Cash flow analysis
• Recent tax return and analysis
• Insurance needs 
• Auto, home, life, health, short/long term disability, umbrella, etc.
• Investment analysis and recommendations
• Retirement needs as well as projections
• Estate planLiving will, living proxy, durable power of attorney, etc.

Save time by preparing before a meeting, to invest time on certain questions instead of rehashing the basic information!

As possible guess, these strict criteria keeps membership little (~2400 members). But these standards work in your own favor.

NAPFA members have a reputation for quality as well as integrity, that is hard to come by, as seen during the 2008 financial crisis.

The site has a easy user interface for we to use in your own search.

The National Association of Personal Financial Advisors Web site

After entering your home town to zip code, a list of local NAPFA members will appear. We can additionally look for a certain advisor to see if he to she is listed.

Along with a phone amount, the results include a map of the address, a brief description for the advisor, a link to the advisor's web site, and email address if available.

NAPFA Look Results - Detroit, Mi

The "Refine Results" option is the best feature of the site. By following the link, we can choose the certain specialties you need, including:

• Retirement Plan Investment Advice
• Ongoing Investment 
• ManagementCash Flow/Budgets/Credit Issues
• Charitable Giving - Trusts & Foundations
• College/Education Planning
• Estate & Generational Planning Issues
• Insurance Associated Issues, including Annuities
• Alternative or Private Investments
• Investment Information without Ongoing Management
• Real Estate Investments
• Retirement Planning & Distribution Rules
• Socially Responsible Investments
• Tax Planning
• Planning Issues for Business Owners
• Helping Clients Identify & Achieve Goals
• Planning Concerns for Business Executives
• Divorce Planning
• Advising Employee Benefit Program Participants
• Financial Issues Between Generations
• Middle Income Client Needs
• Newlyweds & Novice Investors
• Advising Health Professionals
• Professional Athletes to Entertainers
• Special Needs Planning
• Planning Issues for Unmarried & Same-Sex Couples
• Womens Financial Planning Issues
• Hourly Financial Planning Services
• High Web Value Client Needs
• Advising Entrepreneurs 

It makes sense to pay somebody for financial investment advice when you want an expert.

For example, you have done everything we can with this website, and now you have specific questions regarding tax planning. It is time to seek out many advice.

To, you're just getting began, we really like the topics on the site, but are not sure how to begin due to the fact of some "special" circumstances. Having a person provide you with advice may be the added reassurance we want.

It is additionally appropriate to seek out financial investment advice when we understand the importance of taking control of your finances, but are wise enough to realize that you cannot take care of them your self.

The cost of the financial investment information will depend on exactly what services you need. Complicated estate planning or perhaps structuring a corporation will usually cost more than having someone look over your own taxes.

Keep an eye out for "hidden" fees as well as any payment quoted in percentages. 1% to 2% does definitely not seem such as a lot, but as your own account grows, the yearly commission you're charged also increases.


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Goal Setting Template for Personal Finance as well as Investing

A goal setting template is definitely not a new idea. In fact, they have been around a very extended time.

With and so many flying around, you'd think that it would definitely be easy to grab one and get started on achieving the goals.

And so why, when it comes to personal finance and investing, do and so many people do definitely not accomplish their goals?

Vague statements, including "I would like to be rich" to "I want make enough money to retire", are the main culprits.

It's not that these goals aren't ?good? or perhaps ambitious; they are. But take a closer consider the language.

Planning and attaining these goals is very difficult mainly because the word "rich" is hard to define. How do we understand when you are deep? That word means different things to different people. Even for you, being deep or perhaps having ?enough income? can change over time.

And so exactly what can YOU do to succeed?


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Buy Silver Bullion and Create an Great Investment

Bullion is commonly composed of precious metals such as gold, silver and platinum that are usually the most common metals that ar used in generating bullions. Bullion coins are the type whose costs re based on the useful meta information of the coin, as an alternative t heir face value.

is any kind of sort o marked, stamped, and assessed silver metal. You ve possibly viewed assive silver bars in pic r on TV, and these is ultimate example of just what bullion is. These bullions are usually unconditionally sed for purchases which cove coins, bars as well as rounds;  heir value s primarily reliant on the amount of the metal in the coin, as well as is created in big amount. among these popular metals, silver bullion s mostly availed by the purchaser because of its affordability, reliability and its elegance.

Silver Bullion s known as a commercial metal wit safe-haven element. t is the finest as well as many fundamental sort o silver; it is wanted by a great number of purchaser. A silver collector pay posse certain random rounds or bars, ut the amount of nearly every collection is usually consists o coins which are ore beneficial han raw silver. When acquiring i, among the best strategies t unsure funding success s by fully researching the marketplace, hen creating wise diversifications  with well known consultants y the side. Since 1992, the Certified Gold Exchange has put the standard for silver bullion investing, delivering buyer the top quality service and costing back y their price combined guarantee. Since silver is cheaper han gold, it is a good deal more accessible.  

Various precious metal buyers commonly compare silver bullion to , very since both safe-haven metals are possible to follow 1 another development when spot costs ar changing. Worthwhile metal ave enlarged in charm drastically n the past ew many years, especially because many buyers have witnessed both gold bullion as well as silver bullion value are fast increasing whilst all the thing from stocks to bonds and real-estate is enduring midst a contracting financial state.or the person who need t ave new silver to keep in a safety deposit box, investing it would be th obvious solution t an enticing manner of investing i is future. The appearance o silver features its have extraordinary charm, nd their prices are sensible o a collector can add brand new coins into gallery. ith the value based a lot more n the content of the metal instead of th scarcity of the coin, they can b an great value as well as this is exactly what silver bullion is usually capable for.

Silver bullion is the lowest popular inexpensive method to win to get som type of silver souvenir. They could b rehabilitated  into money, nd costs are largely uoted as well as are globally flexible. Silver costs don’ display considerable growth in a recession, very they rise with economic growth, especially due to its extensive use in any kind of consumer goods including electronics. or perhaps investors who would like to obtain to have direct control of their resources, getting silver bullion has the best fascination. Owning bullion especially silver is hassle-free, easy an commission n purchasing nd selling it is low in the marketplace.


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Do you teach your kids to be poor?

Sometimes parents pass on to their children poor advice about handling money. Here are some messages that won't be helpful when those offspring strike out on their own.


Lots of people complain to me that their parents didn't teach them about money. Maybe they're the lucky ones.

Sometimes the lessons parents teach about finance are just plain wrong. It can take years for their kids to recover, if they ever do.

Kelvin Leeds of Seal Beach, Calif., said his parents had told him that rich people were lucky. "Fortunately," he wrote on my Facebook page, "I learned that it mostly involves hard work."

Colleen Sluss Gorman of Champaign, Ill., absorbed an even worse message.


"Growing up, my folks were poor," Gorman wrote. "I learned that all rich people are evil, all corporations are rich, people who are 'well off' (earning more than around $50,000) were overpaid and lazy."

If you're taught that wealth is the result of luck or misdeeds, what would motivate you to handle money responsibly, grow your income and increase your net worth? Gorman eventually realized the shortcomings of her parents' worldview, but it still affects her.

"I occasionally feel guilty about the amount of money I and my husband make and the amount we have in savings," she wrote.


If you're a parent, you should think twice about passing on these messages. If you received them as a kid, now is the time to shake yourself free from unhelpful lessons, including:

In one sense, it's true: A lot of money will flow into your hands during your lifetime. What counts is what you do with it.

Allison Burnell of Reston, Va., grew up in a family of six and wrote that her parents had "never planned ahead for anything (or maybe they couldn't afford to, raising six kids)."

"Their attitude was more or less 'God will provide' or that things would take care of themselves," Burnell wrote. "I grew up never learning to plan ahead or save for things as a result."

Often, failure to plan can mean ever-deepening debt, as the grasshopper (of the ant-and-grasshopper fable) reaches for a credit card to handle "unexpected" expenses.

"My mother is of the belief that it's just money (and) not a big deal," another reader wrote. "She figures there will always be more coming in, and is in more debt than I ever care to encounter."

Another reader who has parents with the same attitude despairs that they'll ever change the behavior that causes the need for "another windfall . . . (to) save your financial butt."

"What??? Use the financial windfall to save or get ahead??? What's that about?" she wrote.
You have to wonder about someone who thinks no one else is trustworthy. Is he not trustworthy himself?
But the reality is that money can get complicated, and you need to build some reliable resources to help you answer questions about taxes, insurance, investing and estate planning, among other topics.

If you never learn to distinguish between honorable, upright people and their opposites, you're likely to get burned when you try to get help. If you avoid others' counsel entirely, you could make some costly mistakes.

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Escape from the great debt trap

Consumers are making remarkable progress in restoring their credit. That means they can start spending more, something the economy badly needs.


Michael Busick, a Charlotte, N.C., math teacher, says his credit union "was shocked" to discover his credit score was 812 out of a possible 850 when he applied for a $19,500 new-car loan. The loan officer told him he rarely saw scores so close to perfect, says Busick, 33, who added he pays bills on time and doesn't overextend. He got the loan.

The average U.S. credit score -- a predictor of the likelihood that lenders will be paid back -- rose to 696 in May, the highest in at least four years, according to credit-reporting bureau Equifax. Delinquencies on consumer loans have dropped 30% in two years, according to Federal Reserve data.

Improving credit quality gives households the ability to spend more. A rebound in spending would belie Morgan Stanley economist Stephen Roach's claim that consumers will be "zombies" for years because they are saddled with too much debt.


"The financial situation of the household sector has improved far faster than everyone thought it would two years ago," says James W. Paulsen, the chief investment strategist for Wells Capital Management in Minneapolis. "People are still locked into the view that consumers are facing record burdens, and they are not."

U.S. consumers have reduced debt by more than $1 trillion in the 10 quarters ended in March, according to the Federal Reserve Bank of New York. Households spent 16.4% of their earnings on debt payments in the first quarter, including lease and rental payments, homeowners insurance and property taxes. That's down from 18.9% in the third quarter of 2007, before the recession started.

Even consumers in trouble are in better shape, says Mark Cole, the chief operating officer for Atlanta's CredAbility, a nonprofit provider of credit counseling. Clients have an average of $19,500 in unsecured debt this year, down 30% from 2009 and the lowest in at least six years, he says. "We really see credit quality increasing."

Credit card companies notice the rebound, too. Discover's rate of 30-day delinquencies was 2.79% in the second quarter, the lowest in its 25-year history, company officials said in June.

Jennifer Lahotski, 28, who has a marketing job in Los Angeles, says she's been improving her credit since 2007, when her score was "absolutely below 660," the number Equifax says is the minimum needed to qualify for prime consumer loans. The Penn State graduate had been late on some bills and even had an old charge of $5 from a gym.

"I went through each expense, each delinquency, and sent them a check," she says. "I turned myself into a hermit for six months, but I did it," eliminating most restaurant meals and "random Target runs where you come out with $50" of merchandise. Lahotski, who has a Visa and an American Express card and $15,000 in student loans, says she is now saving "a few hundred a month," with plans to buy a house when she can afford a down payment.

While household obligations are at a 17-year low because of increased savings and lower interest rates, Roach, the nonexecutive chairman of Morgan Stanley Asia, calculates that household debt still comes to 115% of income, compared with a 75% average from 1970 to 2000. "We need to encourage balance-sheet repair and adjustment by overly indebted, savings-short consumers," he says.

Roach's view is supported by some economists, who say the debt that fueled the housing boom from 2002 to 2006 will take years to unwind. This deleveraging "is pernicious, it's ongoing and it's holding back growth because people are going to save more and spend less," says Kevin Logan, the chief U.S. economist at HSBC Securities in New York.

Yet other economists see something more nuanced happening: Some consumers are still paying down debt, while others feel financially healthy enough to borrow. A small percentage of senior loan officers reported growth for all consumer lending in the first quarter. That was the first increase since 2005, according to a quarterly Fed survey released in May. About 29% of the loan officers interviewed were more willing to make consumer-installment loans. In the second quarter, loan officers reported a pickup in demand for auto loans.

Dean Maki, the chief U.S. economist at Barclays Capital, says the growth in credit reflects an underlying optimism. As a Fed economist in 2000, he published research that concluded "high debt burdens are not a negative force." He adds, "When consumer credit is growing, it is a sign that households have become more confident about income prospects."

Sometimes that confidence is horribly misplaced, as in the years leading up to the crash. Fortunately, the actual increases in consumer credit today are very modest.

The return to borrowing by some consumers is already benefiting companies. Craig Kennison, an analyst at Robert W. Baird & Co. in Milwaukee, predicts lending profits will rise at CarMax, the largest U.S. seller of used cars, and Harley-Davidson. Their finance arms "have fully recovered," says Kennison.

The shares of credit card and banking companies will benefit, too, says analyst Brian Foran of Nomura Securities International. "Consumers spend money based on their cash flows," he says. "And their cash flows are fine."


Math teacher Busick, who has a home loan and four credit cards, estimates his near-perfect credit score has risen from the upper 700s in the past few years. While he uses an American Express card to accumulate frequent flier miles on Delta Air Lines, he pays it off in full most months. "I don't have late payments," he says. "I pay all my bills on time." Virtue has its rewards.

Now Busick is thinking of buying a Sony television or a Dell or Hewlett-Packard computer that could cost $2,000. "If I want something, I will get it," he says.

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Is seller financing right for you?

It's a tough market out there, and helping buyers with financing could be the difference between selling your house and waiting. Here, from the seller's point of view, are pros and cons.


Buyers are skittish, lenders are stingy and appraisers can be downright picky. Whether you are trying to buy a home or sell one, it's a tough market out there, so perhaps it's time to consider "seller financing," a technique that can help buyer and seller overcome obstacles to a deal.

Seller financing is just what it sounds like. Instead of getting a lump sum when the sale closes, the seller accepts the buyer's promissory note covering terms such as the loan rate, the years the loan will be in effect, the monthly payment and so forth.

While seller financing can work well for both parties, they need to study the terms closely and be sure they clearly understand them. What follows are the basics, as well as the pros and cons from the seller's point of view.

In many seller-financed deals, the seller provides the only financing the buyer needs to purchase the property. Some sellers demand a cash down payment; others will finance the entire purchase.


In other cases, the seller provides the buyer with a deal to cover just a down payment, with the buyer using an ordinary mortgage for the bulk of the purchase price. This makes it possible to sell to a buyer who cannot afford the down payment required by an ordinary lender. In these deals, the buyer's ordinary mortgage lender typically demands that the seller's loan be subordinate to the lender's. In a foreclosure, the mortgage lender must get all it is owed before the seller/financer gets anything.

Seller financing has a number of benefits for sellers: The property purchase may be made sooner than it would have been otherwise, and the seller may be able to set a loan rate higher than if he or she cashed out and put the sale proceeds in an interest-bearing account. Today, a seller might get upward of 5%, far more than one could earn with bank savings.

But there are downsides, too. Instead of getting a lump sum, the seller gets a string of payments for a number of years. The interest earnings might seem generous at the start, but would be disappointing if prevailing rates were to rise.

Many sellers minimize this risk by demanding a balloon payment a number of years down the road. For example, monthly payments could be calculated with an amortization schedule of 30 years, but the balloon payment would actually retire the debt after only five years. Typically, the parties assume the buyer will be able to refinance the loan to cover the balloon payment.

Another seller's consideration: A seller-financed deal would not provide the seller with cash to buy another property. If the seller then needed to borrow for a new home, lenders might consider income from the seller-financed deal to be too uncertain to count toward the loan qualification.

A seller who finances a home deal also would have to chase down the borrower for any missed payments, and someday might face the hassle and expense of foreclosing. In the worst case, the borrower might let the property deteriorate, or market prices could fall, leaving the seller to foreclose on a property worth less than when the deal was closed. It is critical, then, for the seller to carefully assess the buyer's creditworthiness.
Here are some other considerations for sellers:

If the seller still has a sizable mortgage, the seller's lender will have to sign off on the deal. Seller financing is most common when the seller owns the property free and clear or owes an amount that can be paid off with the buyer's down payment.The seller should require a thorough loan application from the buyer and check out the buyer's assets, income sources, credit history, employment and references. Be sure to get a complete list of the buyer's other debts.Each party should hire a real-estate lawyer and tax adviser to go through the paperwork. The contract should be clear about the seller's rights should the buyer fall behind in payments.

Typically, a title company is used to close the deal.To make life easier, the seller should consider hiring a loan-servicing company to collect payments, maintain an escrow account for taxes and insurance and deal with the buyer. A typical fee is $15 for each monthly payment, $30 if the servicer also manages an escrow account.


As another payment option in the increasingly limited world of home financing, buyers and sellers may find that this arrangement opens new doors to the deal.

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Mobile banking: Will you be hacked?

A survey suggests more of us are nervous about using smartphones for banking. Is there reason to be? Plus: How to minimize the risks.


You're in the store trying on a stunning but outrageously priced shirt. You have to have it, and your hand has already palmed your debit card -- but wait! Did your mortgage payment clear your money market account yet?

You could whip out your smartphone and check your balance using your bank's app, and maybe make a quick transfer between accounts. If you access your bank account information on your mobile phone, are you jeopardizing the security of your checking and savings accounts?

No, says Phil Blank, the managing director of security, risk and fraud at Javelin Strategy and Research -- not as long as you exercise some basic online street smarts.

"All you need to do is use a little common sense," Blank says.


If you think twice before accessing banking information on your smartphone, you're not alone. Even though smartphone use has jumped, more consumers with mobile banking capabilities are concerned that sharing personal financial information on their phones will open them up to hacking and fraudulent activity.

According to a 2010 Javelin survey, about 40% of smartphone owners said mobile banking made them nervous -- up dramatically from 26% in 2009.

"It's very clear to us that people are saying, 'I am nervous about using my smartphone to bank,'" Blank says.
In Blank's estimation, financial institutions must address this perception quickly. Otherwise, many consumers will never take advantage of mobile banking.

Marc Warshawsky, senior vice president of mobile channel planning and design at Bank of America, says its customers have no reason to worry about their financial information being stolen -- whether they're using a computer or smartphone to bank.

"We've taken the necessary steps to minimize any risk to their accounts, whether they access them on their mobile phone or from their computers," he says.

Besides, Warshawsky says, should something happen and their phones are hacked, customers of Bank of America would be protected by its zero-liability guarantee. "They would not be responsible for any unauthorized charges to their debit cards, credit cards or accounts," he says.

If you're still unsure, here's what Blank and Warshawsky say you need to do to be sure the transactions you make using a smartphone are safe:

Stick to your bank's apps for mobile banking or to trusted, well-reviewed third-party personal finance apps. Download them directly from the app store for your phone's type -- iPhone, Android, etc.

Treat your smartphone as if it's a PC. "I really hate the term 'smartphone,'" Blank says, "because what it really is is a PC that happens to make phone calls. If you look at your phone that way, you're minimizing your risks." For instance, install antivirus software on your phone as you would on your PC.Monitor the whereabouts of your phone. One big difference between your smartphone and your desktop computer is that the latter is much less likely to fall out of your pocket or purse. Check every so often to make sure your smartphone is on you when you're out and about.


Use public Wi-Fi access to conduct your banking business. You can't be sure it's secure, Blank says. Opt for wireless networks that require a network security key or have some other form of security.

Be the first in line to use your bank's new app. "Wait until it's been about 30 to 40 days and then go and download it," Blank advises. The reason? Sometimes early versions of apps contain malware or are not safe.Leave the keys in plain sight. Never send a text message on your phone containing sensitive information such as your Social Security number, checking or savings account number, or your account passwords. "We don't give the customer the option to store anything sensitive on their phones," Warshawsky says. "That's for their own protection."Be fooled by emails or text messages asking for personal information. Often, these "phishing" messages claim to be from your bank and ask for personal information or ask you to click on provided links to update account information. "We would never ask you to provide your ID or password over digital communications," Warshawsky says. You should also avoid visiting any websites that you don't know anything about.

Using your phone to bank on the go can be a great convenience. As long as you're smart about it, says Blank, there's no reason you shouldn't access your bank accounts through your smartphone.

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Pay mortgage if house is destroyed?

If a natural disaster leaves your home in ruins, your first impulse probably isn't to give your lender a call. Here's why it needs to be a priority.


The federal government has declared more than 50 official natural disaster areas so far in 2011. Last year, the total of large-scale floods, tornadoes, hurricanes and the like climbed to 81. Few states are immune to natural disasters, and each event affects thousands of homeowners who must cope with the physical and emotional damage, as well as the prospect of perhaps not being able to manage their mortgage payments.

Still, a disaster does not guarantee mortgage relief, according to Laura Vinton, counseling manager at Hope Enterprise, a nonprofit community development financial institution in Gulfport, Miss., a town devastated by Hurricane Katrina in 2005. "Any consideration is determined case by case, and it's a two-way process," she says.


After a disaster, banking regulators and government mortgage agencies typically issue proclamations directing lenders and loan servicers to make certain accommodations for borrowers. But those proclamations are only guidelines.

A May 25 Financial Institution Letter issued by the Federal Deposit Insurance Corp., for instance, declares: "Extending repayment terms, restructuring existing loans, or easing terms for new loans, if done in a manner consistent with sound banking practices, can contribute to the health of the community and serve the long-term interests of the lending institution."

Lenders must stay within regulators' parameters and agencies' loan-servicing guidelines, says Bob Davis, executive vice president of the American Bankers Association in Washington, D.C., though they still have latitude to consider borrowers' individual situations. For some, that might mean a longer period of forbearance or more flexible payment plan.

The Federal Housing Administration traditionally imposes a 90-day moratorium on foreclosures of FHA-insured loans in a disaster area. This freeze, triggered by an official declaration by the current president at the time of the disaster, gives the homeowner "a little more time" to work with the lender and insurance carrier to assess the damage and understand the situation, says Karol Mason of Wells Fargo Home Mortgage.

Those who still need help after the 90 days are over can try to negotiate additional relief.

"If the customer still needs assistance and hasn't been making the payments for the 90 days, that workout continues on an individual basis," Mason explains.

After the devastating tornadoes in the South this year, Freddie Mac released a press release strongly encouraging servicers to help affected borrowers with Freddie Mac-owned loans by:

• Suspending foreclosure and eviction proceedings for up to 12 months.
• Waiving assessments of penalties or late fees against borrowers with disaster-damaged homes.
• Not reporting forbearance or delinquencies caused by the disaster to the nation's credit bureaus.

Lenders typically will waive late fees and defer payments after a disaster, but those accommodations may not last beyond a few months. When the time is up, missed payments become due, either in a lump sum or according to a payment plan.

Any homeowner who suffers a financial setback, such as a job loss, as a direct result of a disaster, also may be offered temporary mortgage relief, even if his or her home was spared. Documentation will likely be required to prove the hardship.

Borrowers should contact their lenders as soon as possible after a disaster, Mason suggests. "It's that customer call that triggers all the actions that take place on our side," she explains.

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Rev. Billy: High priest of frugality

Bill Talen's character, a combination of minister and performance artist, preaches the evils of mindless consumerism and argues for changes in spending behavior.


What's the biggest religion in America: Catholicism? Evangelical Christianity? Mainstream Protestantism?
It's consumerism, according to the Rev. Billy -- the deeply held American belief that buying stuff makes us better and happier, that purchases can fill the voids in our hearts and souls.

"We really do consider it (consumerism) the largest fundamentalist religion in America today," the Rev. Billy said. "It makes us stand in lines, sit in traffic and tells us we need 23 different products just to take each other on a date."


If you're aware of the Rev. Billy, it may be from the 2007 documentary about his performance art/ministry, "What Would Jesus Buy?" Or his run as a "protest candidate" for mayor of New York in 2009.

Or maybe you have heard about the comedic exorcisms he and his gospel-choir group -- once called the Church of Stop Shopping, now the Church of Earthalujah -- performed in bank lobbies, Disney stores, Wal-Mart headquarters and the Tate Modern museum in London, where British Petroleum funds a gallery.


The targets: big business, big oil companies and big banks, which the Rev. Billy and his crew say promote consumerism and a laundry list of economic and environmental ills.

The Rev. Billy is the creation of Bill Talen, the son of a Midwestern banker and a refugee from the harsh Calvinist religion of his youth. Talen was an actor and writer in San Francisco before moving to New York City in the mid-1990s. That's where he created the Rev. Billy as a parody of pompadour-styled televangelists and where he soon gathered a choir of like-minded activists. Using humor, hallelujahs and the vocal hallmarks of evangelical ministers, the Rev. Billy preached the evils of consumerism and related ills: sweatshop labor, environmental degradation and big chains that muscled out family-run businesses.

He was coached by a mentor, the Rev. Sidney Lanier, the vicar of an Episcopal church that served New York's theater community. Lanier encouraged Talen to study how televangelists delivered their messages -- the cadence and rhythm that captured their audiences.

"It's an awesome vocal form . . . when you turn off the content," Talen said.

What started as protest art, though, has morphed since the 9/11 attacks. Talen, who spoke to me while on a break from leading workshops on "Art and Dissent" for the Hemispheric Institute in Chiapas, Mexico, said people started turning to his group for comfort and a spiritual connection after the World Trade Center towers fell.

"They trusted us as a way to be together to reflect about life without a fundamentalist, judging God," said Talen, who officiates at weddings and baptisms in his role as a minister. "We started developing a fellowship, a way to pray together, to sing together."

And they perform. A weekly show in Manhattan's East Village is scheduled to continue this fall after the Rev. Billy and his choir return from their tours of Europe and Mexico. The shows, along with their public protests staged as "interventions" and "exorcisms," use humor and original songs to question mindless consumerism.

"We use the drama of a joyous gospel choir and a televangelist to interrupt and change Americans' relationship to consumer products," Talen said. "This consumer economy has endangered us. We need to make basic changes."

Talen believes some of those changes are already under way, because of the staggering economy. With more people unemployed and underemployed, families are spending more time together rather than shopping for things they don't need. People are starting up businesses, and Americans are more aware of the importance of supporting local businesses.

Talen thinks we're capable of changing even more, of creating a kind of sustainable consumerism that doesn't create economic or environmental catastrophes. Falling into the cadence of a preacher, he references America's past: "We made a revolution. We abolished slavery. We marched for civil rights. We can do this."
But Talen worries the changes aren't happening fast enough to save us -- or our planet. That's why he's not particularly concerned that some people take offense at what he's doing and how he's doing it.

"We have to spend a little less time worrying about other people's feelings," Talen said. "New ways of believing always hurt the feelings of the people who believe the old way."


That said, he doesn't want his message to become too dogmatic or inflexible. He still likes to laugh and to make others laugh.

"I don't want to become a fundamentalist myself," Talen said. "We're all doing what we can. We need to forgive each other and move on."

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Stay wired without staying broke

Whether it's your cell phone, pay TV or Internet service, being connected costs, and you could be paying too much. The right strategies can reduce excessive charges.


Staying connected -- with each other and the world -- costs more than ever.

We're spending steadily more on phone service, even as many people drop land lines and switch to cellphones and Voice over Internet Protocol, or VoIP. The average digital cable TV subscriber now pays $75 a month. The cost for decent broadband Internet service is likely to rise as providers institute caps to limit data access -- and charge for overages.

The costs of all these connections can easily approach $200 a month for a typical family and exceed $300 for those who choose premium services.


Here are some strategies for making sure you're not paying more than you need to:
Cable and satellite subscriptions are set up to soak you.
Sure, you'll get a great rate -- at first. A few months later, though, part of your deal will expire, and you'll start paying more. A few months after that, your bill will jump again as the rest of your deal expires.


Pay-TV providers offer those great deals upfront because most people will continue to pay the bill as it rises, said Bob Sullivan, MSNBC's Red Tape columnist and the author of "Stop Getting Ripped Off."

"They count on our laziness," Sullivan said. "They know we hate little things about change, what economists call switching costs, like losing track of where our favorite programs are on the dial. Is ESPN 206 or 35? . . . Even the most vigilant among us let it go for a few months before we complain. All this is baked into their business model."

TV providers also salt your bill with other fees and charges you may not need to pay, such as:
Boxes you don't need. If you have an HD-ready set, you don't need an HD converter box, but your television provider might not tell you that. You also don't have to lease the service's digital video recorders -- you can buy your own, although you may still have to pay a service fee, which could offset the savings.


Installation charges. These are usually waived when you sign up for new service, but keep an eye on your bill, because the charge could sneak in later. A month after our U-verse bundle was torturously installed, not one but two charges for "installation of AT&T U-verse Voice" popped up on our bill, totaling $174. I was on the phone instantly (I had the customer-service number memorized by this point) and got credits to offset the charges.


Early-termination fees. Some providers, including DirecTV, are taking a page from cellphone companies and instituting whopping early-termination fees if you discontinue service. The providers say the fees are necessary to compensate them for the high costs of installing pricey equipment, but they can come as a huge shock to subscribers who didn't realize they were under contract.

One of my readers who lost her job canceled her DirecTV service to save money, only to face a bill of more than $300 because she was only a few months into a two-year service agreement. Others have faced fees after their equipment was destroyed in fires, tornadoes, floods or other disasters.


Your strategy: Carefully review your bill every few months. Compare what you're paying to what competitors, and your own provider, are advertising for new subscribers. Call and ask the provider to match the lower price. The good news is that television service is a competitive business now, and discounts are yours for the asking.

"I have actually put Post-it notes near my TV that let me know when my discount rate is about to expire," Sullivan said. "Then, when the date arrives and my bill is about to jump from $30 to $60, I call and threaten to switch. That usually gets the bill back down to $30 for another three months. Total savings: $180 for about 30 minutes' work. Anyone who can afford to turn down a $360-an-hour job right now, please raise your hand."

Before signing up for new service, carefully review all contracts and agreements for the "escape" clause, including how to cancel service and whether that cancellation would cost you. Talking your way out of early-termination fees can be tough, so the best strategy may be to avoid them by not signing up for service or upgrades that include them.

Or you could consider cutting the cord altogether. Many people are discovering they can watch all the television they want with a broadband connection and a set-top antenna to catch local broadcast stations. If you're not ready to go cold turkey, you may be able to save a small fortune by opting out of premium channels and settling for the provider's most basic level of service.

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Travel protection? Your credit card

You can travel abroad without your credit card, but there are many advantages to having it, including protecting yourself against potentially serious problems.

Safety in numbers, we're always taught. It's smarter to go out late at night with someone accompanying you than to make your way alone, and those who hike in the rugged wilderness without a companion could wind up like that guy in "127 Hours." Some personal finance and travel experts offer a similar take on traveling in foreign lands with credit cards. You're better off with them than without them.

Not that you shouldn't bring along some cash. If you don't, that could be problematic as well. "You can't go to the souk in Istanbul with a credit card. You've got to pay with cash," says David Litman, the CEO of GetaRoom, a hotel booking site that specializes in finding low rates. "There are people you will have to tip, and that's generally going to be with cash. You have to have a mix, but everything I can put on a credit card, I do."

Think this is overplaying the idea that traveling without a credit card could invite disaster? Consider the following:

1. If your cash and cards are lost or stolen, only credit cards can be replaced immediately. For example, if your hotel room is broken into and your cards are stolen, your first call should be to the local authorities. Then, you'll want to call the issuing bank to notify it of the theft. The best credit card companies will send you a replacement immediately and make sure you're financially set to continue your journey or return home. That's a part of their customer service.

With a debit card, as long as you call your bank within two business days, even if your checking account was cleaned out, you should eventually get all of your money back, except possibly the first $50. But you likely won't see it until the next business day, which could mean begging the American embassy to put you up for a night.

And if you only brought cash and that's what was stolen, keep your fingers crossed that the authorities rival their fictional counterparts on "Law & Order" or "Hawaii Five-0." Then, just maybe, you won't have to beg your family members to wire you enough money to get back home.


2. If you become sick, a credit card can speed up your treatment. Sure, it's unlikely, but Litman throws out a pretty terrifying scenario: "Let's say you're in Zimbabwe and you come down with dysentery, and you need $20,000 for a private aircraft to take you to another country where you can get better treatment," says Litman. "If your limit is $10,000 and you need your credit raised, and you explain what's going on and can fax over a doctor's certificate, they'll give you that."

That's a lot of hypotheticals, and the outcome would depend on your relationship with your credit card issuer -- we can imagine situations where you're still out of luck -- but his point is well taken. If you're stuck in another country with a desperate need for money, your odds of getting some quickly are a heck of a lot better with your credit card issuer than with your debit card's bank or having to wait for your relatives to collect and wire over some funds.


3. Credit card exchange rates won't drain your budget as fast. True, many credit cards charge a foreign transaction fee for purchases (not all: Capital One is free of them, and certain cards from Chase, Citi and American Express have removed the foreign transaction fee). But even then it's usually cheaper to pay the fee than to convert your American dollars or traveler's checks into foreign currency.

Why is it cheaper? "Credit card purchases are exchanged at the interbank exchange rate, usually the best rate one can get for currency exchange," says Howard Dvorkin, founder of the nonprofit Consolidating Credit Counseling Services.


4. Credit cards won't accidentally pay the wrong amount. Think about the scenarios that might happen if you wouldn't know a rupee or a peso if a Brink's truck full of them crashed into you. "If you're not familiar with the currency, it's so easy to put down the wrong bill," Litman says. "I've seen that happen, and while most people are honest, some are not."

Speaking of dishonest people, most major credit cards offer purchase protection. Whether that protection covers purchases made outside the U.S. depends on your issuer and your relationship with the issuer. But it's just another reason many people swear by credit cards for all their shopping at home and abroad.


5. Credit cards make it easy to rent a car, secure a hotel room and book a flight. A lot of people love traveling with credit cards due to travel perks. The best credit cards, for instance, will let you collect frequent flier miles. But, sure, if you aren't one of those people, a debit card will get you a flight just fine, whereas paying for an airline ticket with cash can be problematic -- and even cause suspicion from an airline. In this post 9/11-era, do you really want that?

And paying for a hotel room and a rental car with a debit card can be even trickier. You may come through perfectly OK, but you'll want to call ahead if you can, to make sure that the rental car company accepts debit cards. Then you'll want to ask if the company will make you pay a deposit for renting a car. Some companies will tack on an extra $200 or $300 that won't be available in your checking account until you return the car.
Some hotels may let you hold the room with a debit card but then turn you away at the desk because you plan on paying with that debit card. Or they may let you pay with the debit card but add on one of those holds of several hundred dollars.


And given that it can be hard enough to stay in a hotel and use a rental car in America with a debit card, you can imagine how things might go in another country if you have a language barrier to overcome as well.

In the end, is it possible to travel abroad and be just fine without credit cards? Of course. But credit cards are arguably the best insurance travelers have that their photo album isn't filled with pictures of the family sleeping on a park bench next to the London Underground.

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4 hidden risks to your portfolio

A market like this one is difficult enough without accidentally adding risk to your portfolio. But a little knowledge and perspective can help you stay calm and avoid big blunders.

In recent days, queasy investors have run from stocks to bonds and cash, then back to stocks. But when investors react to daily market moves, they often go too far, experts say. Instead, smaller tweaks might be more beneficial.

Investing is inherently risky -- stock prices drop, companies default on their debt, even sitting in cash runs the risk of failing to keep up with inflation. And much of it, investors don't control -- including an unprecedented ratings downgrade for U.S. government debt, for example, or the precipitous, unforeseen market drops of the past two weeks.

Even so, there is plenty you can do as an investor to control risk, including making sure there's enough diversity in your investments to prevent everything from moving in lock step. You should also have a clear, long-term plan, which can offer perspective when the short term doesn't go your way. "If you focus on those big levers that you absolutely can control then you actually stand a great chance of being successful," says Chris Philips, senior investment analyst for Vanguard's investment strategy group.


Obviously, there's no way to eliminate all the risks in investing. Sometimes, surviving a market swoon feels like exactly that: survival. But there's no reason to make it worse than it has to be. Here are four common investing mistakes that add unnecessary risk to a portfolio -- and how to fix them:


Reality: Some bonds are safer than others.
Until last week, U.S. Treasurys were considered risk-free, with no chance at all that the issuer (aka Uncle Sam) would fail to pay up. Post-downgrade, investors may be able to see a bigger picture: Bonds of all kinds can carry hidden risks. They still have a place in a portfolio, advisers say, usually to generate income and to provide stability -- when stocks fall, bonds often rise, or at least don't fall as much as stocks. But within the universe of bonds, there's a wide range of risk, which make some issues far more vulnerable to big losses than others. The more a bond pays in yield, the riskier it is. High-yield corporate bonds, for example, commonly called junk bonds, can offer yields an average 6.6 percentage points above Treasurys. They also have a higher risk of default. Over the past 12 months, 2.2% of high-yield bonds defaulted, according to Standard & Poor's Global Fixed Income Research; during the same period, no investment-grade bonds did.


The fix: Don't chase yield.
Even with high-yield bonds, the odds are still in the investor's favor, but they're also some of the most volatile issues around, with prices that tend to rise and fall more like jittery stocks than mellow bonds. To reduce risk, investors should have no more than 7% of their bond portfolios in high-yield bonds, says Ron Florance, managing director of investment strategy at Wells Fargo Private Bank. Investors should diversify with other bonds, such as municipal bonds, investment-grade corporates and foreign issues, he adds. And while investors can't control rising interest rates, which also erode the value of bonds, Florance recommends sticking to bonds with short maturities -- about seven years or less -- because they will get hurt less if rates go up.


Reality: A dozen funds -- or even a mix of stocks and bonds -- may not cut it.
Households that invest in mutual funds own about seven funds apiece, on average, according to 2010 data from the Investment Company Institute, a mutual fund industry trade group. That ought to be enough to get good and diversified, no?

A closer look often reveals that even with a passel of funds, portfolios can be far more concentrated than they first appear. Investors often fail to realize that they can be holding two or more funds with very similar strategies, which isn't always apparent in a fund's name or track record, says Todd Rosenbluth, a mutual fund analyst for S&P Equity Research. An investor who owned the $61 billion Fidelity Contrafund (FCNTX) and the $24 billion T. Rowe Price Growth Stock (PRGFX) fund, for example, would end up essentially doubling down on information technology and consumer discretionary stocks, according to S&P.

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5 strategies for a new bear market

If the last couple of weeks have left you unsettled, it’s no wonder. The tactics used by these mutual funds can help you defend your wealth against a falling market.

In what seemed like the blink of an eye, the stock market's spring swoon mutated into a summer surge. Then, just as quickly, the rally gave way to a huge sell-off. Clearly, investors are unsettled and uncertain about the future -- with good reason.

Risks abound: Joblessness remains disconcertingly high, and economies in the U.S. and much of the developed world are fragile. Notwithstanding the latest bailout of Greece, investors worry that that nation, as well as the bigger countries of Italy and Spain and even the U.S., could default on their debts.

Timing the stock market is notoriously hard, and we don't encourage you to try to. But if the market's gyrations leave you queasy, you may want to go on the defensive. Fortunately, plenty of mutual funds, employing a wide array of strategies, let you do just that.

Here are five approaches to protecting your portfolio, listed in order of increasing complexity.

Some plain, old-fashioned stock funds have proven records of outpacing their brethren in tough times. They do this by picking stocks that tend to hold up well in down markets, raising some cash when they have trouble finding bargain-priced stocks (but not enough to be considered market timers), or some combination of the two. The problem with these kinds of funds is that they will almost always suffer at least a bit in periods of stress, and because every bear market is different, they may not do as well in future downturns as they have in the past.


Launched in 1970, Sequoia Fund (SEQUX) has compiled a distinguished record, first under Richard Cunniff and William Ruane, disciples of value-investing guru Benjamin Graham, and more recently under Robert Goldfarb and David Poppe. The fund invests in large, predictable businesses that have a lot of cash on their balance sheets but not much debt -- and thus can weather tough economic times. In addition, the managers let the fund's cash position expand when they have trouble finding attractive opportunities -- at last report, 21% of Sequoia's assets were in cash.

Over the past 10 years, Sequoia returned an annualized 6.1%, topping Standard & Poor's 500 Index ($INX) by an average of 3.4 percentage points per year (all returns are through June 30). The fund shone especially brightly during the two big bear markets of the '00s. In 2008, it lost 27%, 10 points less than the S&P 500's decline; in 2002, when the index sank 22.1%, Sequoia dropped only 2.6%. Looking at Sequoia another way, it captured 77% of the monthly increases in the S&P 500 from Jan. 1, 2000, through June 30, 2011, but shared in only 48% of the index's declines.


DGHM All-Cap Value Investor (DGHMX) differs from Sequoia in three notable ways: It's only four years old, it's practically unknown, and it stays fully invested at all times. The fund stood out during the 2008 market conflagration, dropping a relatively modest 22.4% that year. And private accounts run by fund sponsor Dalton, Greiner, Hartman, Maher held up well during the 2000-02 bear market. The accounts, which employ the same bargain-hunting strategy as the fund, essentially matched the S&P 500's 22.1% decline in 2002 but earned double-digit gains in both 2000 and 2001, down years for the market.

DGHM invests mainly in high-quality, undervalued companies that are leaders in their industries and generate strong free cash flow (the cash profits left after the capital outlays needed to maintain a business). The mutual fund is run by 10 analysts, each of whom is responsible for a sector. One of the fund's earliest and best-performing holdings is Teradata (TDC, news), a digital storage company whose stock has more than doubled since September 2007.

Balanced funds can cut your stock losses through a simple maneuver: They hold less in stocks. The typical balanced fund invests about two-thirds of its assets in stocks and the rest in bonds. Vanguard Wellington (VWELX), one of the oldest and cheapest balanced funds (annual expense ratio: 0.30%), benefits from an extra dose of an all-too-rare ingredient: common sense. At least a year before mortgage securities started to implode in 2007, co-manager Edward Bousa began selling shares of banks that had stockpiled them.

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How to pick stocks in an ugly market

Given the turbulent markets, cash may seem like the best place to be. But if you’re willing to take a little risk for a chance at higher returns, look for a dividend stock with a currency kicker.

What if you can't muster the optimism to buy beaten-up growth stocks today -- and yet you're not so pessimistic that you're out in the backyard burying gold? Over the weekend I started thinking about stocks that pay dividends, but in some currency other than dollars. It strikes me as an attractive combination.

You have to have a degree of long-term optimism to buy growth stocks during the current global sell-off. And maybe you don't right now -- what with the continuing euro debt crisis, the downgrade of U.S. debt to AA from AAA by Standard & Poor's, and stock market reaction Monday that had a whiff of panic. Quite possibly this doesn't feel like a time to be buying any of the stocks I picked in my Aug. 5, column, "10 go-go stocks for a no-grow world."

Maybe you can muster a degree of long-term optimism, but the short term looks very dark. And you're not sure how long that short term will last -- a few days or a few weeks?

In that case, sitting in cash feels like the right thing to do. Buy some gold? Gold topped $1,700 an ounce Monday morning on buying in Asia. It's probably still a good hedge -- if the next stop is $2,000, that's a 17% gain from here. But it's expensive and carries its own risk of a correction. Plus, it has the drawback of not paying any yield. Bonds? Certainly not U.S. Treasurys as everyone tries to figure out the ramifications of the U.S. downgrade.


Because I don't know how long current market conditions might last, I recommend you think about safety, certainly, but safety that pays a little bit. And that's led me to what I'm calling a safe, currency-enhanced dividend play.

For example, I've been thinking, a dividend yield of 3.47% on shares of DuPont (DD, news) looks attractive compared with the 2.34% yield on the 10-year U.S. Treasury. Sure, DuPont is rated just A for the long term by S&P. But that A looks a little better today than it looked when the U.S. was AAA just last Friday.


The one thing that troubles me about DuPont, though, is that this U.S.-based (but global) company does business and pays its dividends in dollars. When it comes to doing business around the world, a weak dollar that promises to become weaker still is a mixed blessing. It certainly gives a U.S. company a pricing edge against competitors that sell in stronger currencies. (I'd hate to be a chemical company selling its goods in Swiss francs right now, for example.) On the other hand, it also raises the cost of raw materials especially those that aren't priced in dollars. I don't think you can call a weaker dollar a plus or a minus for all U.S. companies. Which it is and how much depends on a specific company's mix of business.

But there's no doubt that, all else being equal, I'd prefer if DuPont paid me its dividend in something other than dollars. If the dollar continues to weaken, that dollar-denominated dividend stream will be worth a little less each day.

What would I prefer? Not euros or yen, certainly. But there are still strong currencies in the world. Swiss francs. Canadian and Australian dollars. The Swedish krona and the Norwegian krone. With each drop in the dollar, the euro or the yen, the value of dividend streams from companies doing business in these currencies increases to anyone collecting those dividends in a weak-currency country.

That's not to say that you should pile into just any strong-currency dividend stock. Remember that a strong currency is a mixed blessing for the company doing business in that currency. A Swedish manufacturer going head to head with a U.S. manufacturer is facing a competitor able to sell its goods for less to many customers every time the dollar falls. At the same time, the goods of the Swedish manufacturer get just a little more expensive to many customers every time the krona appreciates. If you want to see the damage that having to compete in a strong currency can do to companies, just take a look at the devastation in Brazil's goods exporting sector from the strong real.

So, again, you need to look at the pluses and minuses of a strong currency on any company. I like Nestlé (NSRGY, news), 3.42% yield paid in Swiss francs, for example. But I worry about the pressure a strong franc puts on the company's prices around the world. (The degree to which Nestlé produces its products locally mitigates some of the competitive disadvantages of a strong Swiss franc.)

So what would be my ideal strong-currency, dividend stock -- besides the obviously strong-currency bit, of course?

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How to really fix the federal budget

Families and businesses count and add the numbers honestly. They invest and plan for the future, and borrow when it makes sense. Washington could take a lesson.


The U.S. budget is broken.

No, no, I don't mean that the U.S. is deeply in debt, so deeply that some wonder if we can ever dig ourselves out. And I don't mean that our annual deficit, an estimated $1.65 trillion for fiscal 2011 year, threatens to soar even higher.

I mean that the actual federal budget, the mechanism that's supposed to tell us whether our finances are in good or bad shape, and whether they're getting better or worse, is broken. It doesn't give us an accurate picture of our financial health. And as for giving us guidance for where we're headed, well, it's like using a meat thermometer to gauge the weather, like timing a soft-boiled egg with a sundial, like deciding what to wear by looking at average daily temperatures, like . . . .


Don't get me started.

As a result the entire battle over raising the debt ceiling, cutting the annual federal budget and even, maybe, raising taxes (excuse me, enhancing revenue) someday is a battle fought between two armies blundering across the landscape wrapped in the deepest Scots haar fog and whacking about with their claymores at friends, foes and innocent sheep alike.

And a balanced budget amendment? Nobody can possibly decide whether it's a good idea, a disaster, or a harmless joke, given the present state of our governmental budgeting. To start, what do the terms "budget" and "balanced" even mean in Washington?

OK, enough of a rant. Let's get down to brass balance sheets. We can start with those definitions for "budget" and "balanced."

Look at the scorecard constructed by the Congressional Budget Office for President Barack Obama's fiscal 2011 budget. Revenue, estimates the CBO, will come to $2.27 trillion. But note that only $1.7 trillion of that is "on-budget" revenue according to the CBO. The budget office calls the additional $570 billion "off-budget" revenue.

The same terminology turns up on the spending side. On-budget spending amounts to $3.2 trillion, with off-budget spending adding up to $497 billion.

If you're looking to balance the something called THE budget, what numbers do you look at? And what is off-budget spending anyway?

Turns out most of what's off the budget comes from the collection of Social Security taxes -- revenue -- and payment of Social Security benefits. That money goes into (and flows out of) the Social Security Trust Fund and doesn't get counted as part of the budget. Although as you know if you've been following the current debate about the debt ceiling, Social Security checks do seem, strangely enough for an off-budget item, to come out of the U.S. budget. (Another off-budget item is the U.S. Postal Service. And some spending moves between off- and on-budget. The costs of the Iraq War were initially covered through special emergency appropriations, for example, and weren't "on budget.")

Let's say you define what you mean by budget, maybe by putting all the off-budget items into the budget to create what's called a unified budget. You've still got another problem definition. What do you mean by "balanced"?

Let's say, it's the 1990s and the Social Security Trust Fund is taking in more than the government is paying out. That was true during much of the Clinton presidency (and, in fact, until relatively recently). But you know that this is a temporary situation. As the baby boomers continue to age, the time will come when the trust fund is taking in less than the government is paying out. So considering the absolutely predictable future obligations, when is the budget balanced?

That's a problem with the expected. Now, how about the unexpected? Hurricane Katrina made landfall near New Orleans at the end of August 2005. By October 2005, Congress had appropriated $62.3 billion in supplementary spending for disaster relief and recovery. Even then, voices in Congress argued against that spending because it would increase what was seen at the time as a large deficit.

Or how about the expected unexpected? By this, I mean the business cycle. We know -- or at least everyone except Alan Greenspan knows -- that the economy will go through boom and bust cycles. During the booms, tax revenues will soar and expenditures for some things -- unemployment benefits, for example -- will fall. If the government does nothing to change spending -- such as passing a huge tax cut -- the budget will move toward surplus. During the bust years, tax revenues will fall as the economy slows and the costs of things such as unemployment benefits will climb. The budget will move toward deficit, especially if the government decides that the downturn is severe enough to justify increased spending on infrastructure projects, say, or tax cuts or credits to spur hiring.

We know from the history of the Depression -- from the budget-balancing efforts of President Herbert Hoover and in the very earliest part of President Franklin D. Roosevelt's administration -- and from the 1937 relapse into Depression -- that balancing a budget during a downturn, which requires cutting government spending, makes the downturn worse. When the bust in the cycle produces what some economists call a demand recession, marked by falling private demand for goods and services, increased government spending on goods and services can lessen the depth and duration of the downturn.

So is your definition of a balanced budget one that is always in balance no matter what strikes the economy? Or is it one that says "emergency" spending is OK, even if it puts the budget into the red? (And if the latter, you still have to define "emergency.")

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Keeping your cool in a brutal market

In rough times, the usual advice for everyday investors is to stick to your plan and avoid rash moves. But that’s not easy to do. These strategies may help.


When the markets roil, many advisers stick to the same mantra: Stay with the long-term plan. Don't do anything rash. In fact, don't do anything at all. But even for committed buy-and-hold investors, that's easier said than done.

The market is officially in roller-coaster territory now. Two weeks ago, the Standard & Poor's 500 Index ($INX) was up a very respectable 5% for the year. Late last week, the index went negative. Investors finding it tough to stick with their long-term investment plan these days are not alone. Most investors buy high and sell low, most of the time, say experts.

"I've gotten a ton of calls," says David Peterson, the president of Peak Capital Investment Services in Highlands Ranch, Colo. "But the advice I've given is not to panic. We've gone through corrections before, and if you look at where the market was a year ago, we're still up from that."


Sometimes, panic can be instructive, advisers say. If a long-term plan looks good only when the market's going up, then maybe it's not such a great plan. After all, a solid investment strategy should be tailored to include enough risk-taking to help you achieve your long-term goals, but not so much that you freak out over every decline in the market. But if this is a question of mind over matter, there are strategies that can help you do the right thing.

Any decisions you make during a volatile period will be colored by your emotional state, says Terrance Odean, a finance professor at the University of California, Berkeley's Haas School of Business who has studied investor behavior. "You don't want to be making your decisions under emotional duress," he says. "Movies are good. I once under similar circumstances read three of Raymond Chandler's books in a row. If you're in California, you might consider the beach."

If you can temporarily avoid thinking about the temptation to sell your holdings to avoid further losses, advisers say, it's often enough to get you back on track and refocused on your long-term investing goals.
Of course, tuning out isn't for everyone. E-Trade Financial customers took the opposite approach on the first big down day; logins to the online broker's mobile trading platform were up 30% compared with the previous week, and mobile trades hit an all-time high, nearly twice as many as the previous week's average. Whether you're tuning in or tuning out, try to keep things in perspective.

Take a deep breath, and take a look at a one-year chart of the market, says Christopher Larkin, E-Trade's senior vice president of the U.S. retail brokerage. "It's really going to ease your mind," he says. (Really. On a yearlong chart, the market's still up.)

Having a long-term investing plan doesn't mean sitting on your hands, says Fran Kinniry, a principal in Vanguard's Investment Group. If you want a portfolio that's half stocks and half bonds, you've got to buy stocks when prices drop and sell when they rise to keep things in balance. Sure, most investors do the opposite. But how do you feel when you walk into the mall and spy a 50% off sign?

"In most purchases, the way to get people interested is to put them on sale," says Kinniry. "And the reality is that the market is cheaper today than it was yesterday."

Investment options have been growing exponentially since the market downturn in 2008, as more investors want better protection against losses, Larkin says. After a sharp slide, the cost of such portfolio insurance does rise, but it's still out there for investors who decide the protection is worth the cost, he says. For example, buying a put option gives you the right to sell a stock at a set "strike price" until a certain date; the value of the option increases the further the stock falls below that strike price. While prices for such options vary, recently you could protect a $120,000 position in the SPDR S&P 500 (SPY, news) for about $7,500, or 6% of its value, according to data provided by E-Trade.

In some cases, selling part of a position so you can sleep better at night isn't such a bad idea, says Marc Pearlman, an investment adviser based in Williamsville, N.Y. "For the person who's prepared, they already know that under these circumstances they might take a loss, and it's not a panic," he says.

However, this strategy shouldn't be relied on to unmethodically dump positions. Pearlman recommends making the tiniest possible change needed to calm your nerves, but still maintain your stakes until things settle down.


When you sit down to make or revise your long-term financial plan, you probably do it in a moment of relative calm. "Our appetite for risk depends a good deal on our emotional state," Odean says.

What seems like a reasonable amount of risk when you're feeling good might seem insanely reckless on a day when the market plunges. The next time you're going over your plan, consider dialing back the amount of risk a bit, "acknowledging that when fear grabs you, it's hard to stick with the plan, and starting off with a more conservative plan than you would if you were Spock from 'Star Trek,'" Odean says.

To help investors figure out their true risk tolerance, E-Trade offers portfolio stress tests, showing how much a given investment might lose in a repeat of various market calamities, Larkin says.

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More in debt than Uncle Sam

As Americans ridicule their government for running up huge deficits, household balance sheets are in their worst shape in 80 years. But investment discipline can start to repair the damage.


You may remember J. Wellington Wimpy, more commonly known simply as Wimpy, Popeye's beloved friend from the iconic comic strip. Wimpy was soft-spoken and intelligent, but also cowardly, lazy, stingy and gluttonous. A true scam artist, Wimpy usually finagled his favorite meal, a hamburger, from some unsuspecting patron at the local diner. Wimpy's parsimonious ways included his famous con line, "I'll gladly pay you Tuesday for a hamburger today."

Decades later, this character, created in 1932 during the Great Depression, has become a symbol of fiscal irresponsibility.

Today, the United States is facing its own Wimpy-esque moment in the form of the debt ceiling. The free burgers have flowed for some time now, but the patrons have grown wise to the scam. The pitch of pushing off today's payment until some future Tuesday has become a bit haggard and worn thin for many in America.


Simply look to Greece, Portugal, Spain and other countries to see what it is like to have one's hamburgers taken away. The forced diet does not look pretty.

Strangely, as the U.S. citizenry passionately criticizes its government for running up a budget deficit, a greater irony is afoot: When it comes to debt management, Americans are, sadly, worse than their government.

While government debt sits at 94% of national revenue, U.S. household debt sits at a whopping 107% of personal income.

The household balance sheets of Americans are in worse condition than at any time since the Great Depression. The ratio of household debt to gross domestic product is greater than at any time since 1929. And while we all are trying to comprehend what life will be like as a poorer nation, many Americans have not yet comprehended their own personal poverty.

From the early 1940s through the late 1960s, an ethos of saving before spending ruled the roost. If you sought to buy a house, a 20% down payment was required. Similarly, substantial savings were required to buy a car. Home furnishings, clothing and more were purchased primarily with cash.

By the 1970s, however, rampant inflation helped form a debt culture that found footing and gained steam.
If you saved, inflation threatened to erode the value of your savings, while the price of your desired purchases continued to rise. What was the point of saving when you could buy with little to nothing down, deduct interest from your federal tax obligations and have those things you longed for?

Over the coming decades, American household debt ballooned, eventually doubling from $7 trillion to $14 trillion between 2001 and 2007. Debt fears, however, were assuaged by the rapidly growing value of real estate; homeowners used equity lines to buy more property and cars, as well as pay for vacations and toys. Burgers were flowing for all.

Then in 2008, the sudden and violent decline in home prices revealed just how bad the debt binge had been. Tuesday had finally arrived, and, like Wimpy, our wallets were a bit too thin to meet our obligations.

A renewed focus on government fiscal irresponsibility should lead us to honest self-examination. At the heart of this audit should be confronting personal debt and embracing basic investing disciplines.

Each person must make a decision to feed the debt furnace or build a retirement engine.

Like Wimpy, we all experience the gnawing hunger to consume more than we need. Each time we reach out, through credit, for a burger today, we take our future dollars and throw them into the blazing furnace of consumption. The heat of the moment is delightful, but the result is the poverty that's unfolding before our nation.

When we behave like wise and disciplined investors, we resist our pulsing appetites, take our hard-earned dollars and direct a predetermined portion to smart, long-term investments. In doing so, such investors build an engine through the miraculous power of compounding interest.


Unlike Wimpy and other debtors, this interest works in your favor. Ben Franklin understood that for such savers, "money can beget money, and its offspring can beget more." Albert Einstein called compounding the "eighth wonder of the world."

Those who reject debt and invest wisely create a powerful engine, so that Tuesday's obligations can be fully met on time, leaving a few burgers to spare.

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Time to prepare for a new recession

With the US credit downgrade and continued market turmoil, the odds of another recession keep rising. Take a close look at where your portfolio stands in stocks, funds, bonds and gold.

The risk of another recession in the U.S. is growing, and investors need to adjust their portfolio holdings accordingly.

The downgrade of U.S. Treasury debt late last week only underscores the need to examine the investments you own, why you own them and the risk you're taking. The types and amount of domestic and international stocks in your portfolio, and your opinion of emerging markets, cash and U.S. government bonds -- even the reason for owning gold -- all need to be reassessed in order for your investments to thrive in a challenging, slow- or no-growth environment.

"At this point, it's only a question of whether (a recession) has already begun," said David Rosenberg, the chief economist and strategist at Toronto-based investment manager Gluskin Sheff.

Investors clearly believe they already know the answer, given the punishing sell-off in stocks worldwide over the past several days.


And now that debt-ratings firm Standard & Poor's has stripped the U.S. of its triple-A rating for the first time, dropping it a notch to AA+ out of concern over the U.S. political process, both stock and bond investors have yet another imperative to consider new ways to take advantage of less-forgiving market conditions.

"We are not likely done with this correction, as the factors that triggered this sell-off have yet to be addressed, let alone successfully resolved," said Sam Stovall, the chief investment strategist at Standard & Poor's Equity Research, in a note to clients on Friday.

While another recession within 12 months is more likely -- many observers now put the odds at about one in three -- those who believe the economy will escape this mud-stained "soft patch" without a setback may ultimately be right.

Regardless, it's clear that the investing playbook is changing. Here's what you need to know to stay ahead in the game:

Stock investors realize the U.S. economy has been on a slow track, but until last month the overriding belief was that domestic growth would improve over time.

So when the Federal Reserve's stimulus package known as QE2 stopped at the end of June, investors also knew the frail patient would still need help getting around. The hope was that a robust corporate sector would provide support with capital spending and job creation.

Then the picture darkened. The confidence-sapping debt-ceiling debate, Washington's newfound austerity and economic data that cast doubt about the efficacy of QE2 has stoked fears that recession, not inflation, is the gravest threat to fragile U.S. and global markets.

"What we had was an artificial recovery propped up by deficit spending and monetary stimulus," said Rob Arnott, founder of Research Affiliates, a Newport Beach, Calif.-based investment management firm.

"If the private sector failed to have its animal spirits invigorated by the fiscal and monetary stimulus, then the stimulus failed," he added. "And that puts us back into a recession that never really ran its course."

Such a backdrop isn't conducive to either corporate or consumer spending. Accordingly, risk-averse investors are now focusing on the return of capital more than return on capital. Stock and fund buyers are embracing traditional "recession-proof," dividend-rich sectors such as utilities, health care and consumer staples.

Within those sectors, look for companies that have above-average dividend yields, are flush with cash and sell goods and services that people need regardless of the economy. In the best cases, solid businesses can take advantage of weaker rivals to gain market share and emerge from a downturn even stronger.

"A focus on hybrids or income-equity portfolios that generate a yield far superior than what you can garner in the Treasury market makes perfect sense," Gluskin-Sheff's Rosenberg said in an e-mail.

More sophisticated investors can maximize their return potential by reducing exposure to riskier assets such as small, aggressive growth stocks and adopting a bigger-is-better approach, Rosenberg added.

"Relative-value strategies that can go short low-quality and high-cyclical equities while going long a basket of high-quality and low-cyclical equities will be a moneymaker in this environment," he said.

Mutual funds designed to make money when the market loses are also worth considering as a hedge. Jeffrey Hirsch, the editor-in-chief of the Stock Trader's Almanac, favors two so-called bear-market funds, Grizzly Short Fund (GRZZX) and Federated Prudent Bear Fund (BEARX).

Hirsch said he expects further stock declines: "My number is Dow 10,000," he said, referring to his near-term target for the Dow Jones Industrial Average ($INDU).

"Avoid taking any hasty long positions in individual stocks and the broad market," he added. "You can probably buy anything you want cheaper over the next few months."

Still, with volatility and uncertainty swirling, don't take anything for granted. Investors need to keep an especially close eye on their portfolios, as conditions can change quickly. Health care and consumer staples, for example, are two areas to be a cautious about overweighting, as they tend to lag when the market begins another upward move, said Stuart Freeman, the chief equity strategist at Wells Fargo Advisors.

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