Fortune Watch

Here we consider the seven stages of monitoring investments throughout life.

The seven ages of man is a speech from one of Shakespeare’s plays and catalogues the stages we go through in life, from baby to old age. It is an excellent comparison to investing and how investors need to ensure their investments keep pace with them as they move through life. However, this doesn’t just apply to saving for retirement, it applies to any investment goal and portfolios need to be monitored to make sure they are on track to achieve their objective.

Baby to young adult: Although financial commitments are negligible at this stage in life, it is a good idea to encourage children to save for themselves and to understand the basics of money from an early age.

Under 25: Retirement is a long way and a bulk of an individual’s income may be earmarked to fund their current lifestyle – buying property or cars for example – rather than saving for later years. However it is still a good idea to get started in investing and understanding what it is all about. Now also might be a good time to develop a high risk, aggressive portfolio as there is plenty of time to recover from any capital losses.

25 to 35: Although retirement may still seem a long time away, the earlier someone starts investing, the greater chance they have of building a significant nest egg for later years. At this stage in life people may be able to afford higher risk and more aggressive growth strategies as there is more time for investments to recover from losses or market volatility.

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In today’s marketplace, having a college degree can make one more competitive for jobs and serve as a key to upward mobility. The value of a college education goes beyond dollars and cents and building competency in a chosen discipline: there is an intrinsic value as well.

Perhaps this partially explains why millions of Americans forego common sense when picking college.

New Study Says Cost of College Is Not a Factor

According to a recent study by Sallie Mae, the country’s leading education lender, cost is often not a factor when picking college. “40 percent of families do not limit their search based on total expense.” Now, this would be fine if 40% of families were financially solvent enough to truly bear the costs of any school their students chose. However, students are increasingly being burdened with record levels of debts.

In fact, two-thirds of students graduate with some debt, with the average debt being $19,237. One-fourth of students will graduate with nearly $25,000, and 10% will graduate with greater than 35,000.

The primary reason attending school has become so much more expensive over the last decade is that school-related expenses (including tuition and fees) rise at rates that far outpace inflation.

According to the College Board, tuition and fees have risen in 2007 at more than double the rate of inflation for both public and private schools. Notwithstanding the fact that the inflation estimate is based on the consumer price index, which historically underestimates inflation by excluding gas and energy (too volatile), the cost of going to school can still be staggering.

While the annual costs for a public school (including tuition, room, and board) averages $13,589, the costs for a private school averages $32,307.
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The dreaded “R” word – recession – has been dominating business headlines for months now. More and more economists are predicting bleak economic conditions and weak job growth in the coming months.

If you get laid off, you can only hope you saw the writing on the wall long before your company announced its cuts. You can only hope you leave with an impressive work history, great recommendations, and updated skills. You can only hope.

Unfortunately, not everyone is so prepared when the boss delivers a pink slip.

Here are some things you can do starting today — whether you think you face a layoff or not — to keep yourself relevant on the job:

Act as if your job is always on the line, even if you’re still on the company payroll. Strive to make yourself more valuable — not just to your current employer, but also to any potential employers you’ll need to win over in the future.

Imagine yourself interviewing for a new position. Can you point to specific ways in which you’ve improved your skills and grown on the job? If so, keep up the good work.

Document your accomplishments. Update your resume regularly to reflect your ever-increasing skills on the job. You can use this information during your performance review and salary negotiations or, should the worst happen, for finding other employment quickly.

If, however, you’ve been coasting in your current position, it’s time to take some initiative. Try these surefire ways to increase your value as an employee:
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Stock futures pointed to a higher open Monday as investors remained cautiously upbeat about the recent downturn in oil prices, which dipped further below $114 a barrel even as Tropical Storm Fay headed for Florida.

Light, sweet crude slipped 42 cents to $113.35 a barrel in premarket electronic trading on the New York Mercantile Exchange, after rising in earlier trading.

Despite some worries in the market about Fay disrupting supplies from the Gulf of Mexico, oil remains near its lowest levels since early May, thanks to the dollar’s rebound and growing signs that developed economies around the world are slowing. Russia’s statement Monday that its troops have begun withdrawing from the conflict zone in Georgia also appeared to alleviate concerns about supplies from that region.

Dow Jones industrial futures rose 41, or 0.35 percent, to 11,704. Standard & Poor’s 500 index futures rose 3.20, or 0.25 percent, to 1,302.90, and Nasdaq 100 index futures rose 7.25, or 0.37 percent, to 1,972.75.

Last week, the Dow finished lower, but the S&P and the Nasdaq composite index ended up.

In earnings news on Monday, Lowe’s Cos. posted a nearly 8 percent drop in second-quarter profit. The results were better than expected, but the home improvement retailer also issued a disappointing outlook.

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Bolstered by falling oil prices and a rising dollar, US stocks could extend their modest gains next week, even in the face of still troubling consumer- and housing-related data.

Wall Street could extend gains next week if financial results from market bellwethers and data suggest the U.S economic slowdown isn’t as dire as once feared.

A slide in energy prices is a welcome boost in an economy hamstrung by the housing slump and mounting mortgage losses in the financial services sector. In the near term, consumers and business should feel some respite as energy costs recede, boosting prospects for a range of market constituents, including airlines, retail, industrial and technology sectors.

Oil’s downward trend helped boost consumer spending slightly in the past month, with crude hitting a three-month low below $114 a barrel on Friday. But its path remains volatile, prompting some investors to remain cautious about the market.

The dollar’s recent jump suggests to some that the health of the US economy could improve. The US economy began weakening before others and now that investors are seeing poor economic data from Europe and Asia, some think the United States is closer to a recovery than others.

“For the past two years, crude has followed the dollar almost lock-step.”

“The strength we’ve seen in the dollar is almost certainly helping bring crude down. At this point, as you move backward, it actually acts as a stimulus on the economy.”

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I read with amazement a story by Gary Simpson . It concerned a couple in their early 30’s from Western Australia who won AUD $793,151.87.

Their lotto dream was realized just two years ago. Lucky people huh?

OK. Nothing too amazing about that – so far. Reading on I was shocked to learn that this story is news now because, despite their massive windfall, this couple had never stopped claiming social security benefits. Greedy huh?

That welfare money is meant to be available to disadvantaged people who are in financial difficulty. Essentially it is “survival” money.

But the story gets worse, much worse…This couple spent ALL that money in just seven weeks! Gone. Vanished. Seven weeks! It hardly seems possible. So, what does that tell you?

The first thing that struck me was how utterly irresponsible this pair was. How do you spend $113,307.41 each week for seven weeks? I have great difficulty comprehending that.

What if this pair had spent just the $93,151.87 having “fun” and put the $700,000 into an interest bearing term deposit for three months at 6.00% interest while they got some decent financial advice? At the end of the three months they would have accumulated another $10,500 to play with (less tax, of course).

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“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” If you can grasp this simple advice from Warren Buffett, you should do well as an investor. Sure, there are other investment strategies out there, but Buffett’s approach is both easy to follow and demonstrably successful over a period of more than 50 years. Why try anything else?

For anyone who is not an accountant, annual reports of companies are dull things indeed. Once you know how much money a company has made (and you don’t need the annual report for that), there isn’t anything much that’s worth reading. However, there is one company in the world whose annual report is eagerly awaited for the interesting reading material that it has and that’s the American company Berkshire Hathaway.

The reason? The annual letter to shareholders that is written by the great investor (and Berkshire Hathaway’s Chairman and CEO), Warren Buffett. Buffett is perhaps one of the most respected businessmen of the world. His ideas on business and investing are full of a simple wisdom that would have sounded naive and unworldly had it not been for Buffett’s fantastic track record. Buffett’s 2007 letter, which was released on February 29, is as interesting to read as any of the earlier ones.

The central tenet of Buffett’s investment philosophy is that one should not invest in anything that one does not understand and that one should be unremittingly focused on long-term value. Buffett is also deeply skeptical of financial engineering and ‘innovative’ financial instruments. In today’s situation, when volatility rules and people are investing day-to-day and sometimes hour-to-hour, it’s worthwhile to take a cool look at what people like Warren Buffett have achieved and how they’ve achieved it.

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Gold prices plummeted to 8-month lows on Tuesday as the dollar’s rally triggered a massive sell-off, hitting oil and industrial metals as well.

Spot gold touched $801.90 an ounce, its lowest level since late December, and was at $816.50/817.45 at 1433 GMT compared with $819.25/820.85 late in New York on Monday.

The precious metal is down more than 20 per cent since hitting a record high of $1,030.80 on March 17.

“The speed and severity of the dollar’s run higher has resulted in some long liquidation,” said Daniel Hynes, analyst at Merrill Lynch.

“At the moment it is hard to see an end to it, but we still have some supportive factors such as inflation, geopolitical tensions and falling mine supply.”

Prices of the metal attempted a recovery earlier on Tuesday after the dollar slipped on profit-taking. Also under heavy selling pressure was industrial metal platinum used to make autocatalysts. Investors have been selling their holdings on concern about falling demand from car makers.

The bulk of the world’s platinum is used by automakers in autocatalyst systems that scrub exhaust fumes of dangerous and environmentally damaging chemicals.

Spot platinum fell to $US1,462.50 an ounce, the lowest since the middle of December, and was last at $US1,492/1,512 from $US1,517/1,537 an ounce on Monday.

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ATM machines have been around forever. They are convenient to those of us on the run however pose a great element of risk. Using an ATM machine in a safe manner requires awareness. Just because an ATM machine is available 24-hours a day doesn’t mean it is safe to use it at all hours of the night.

Most ATM robberies occur at night between 8:00 PM and midnight. ATM robbers are usually males under 25 years of age and usually work alone. ATM robbers usually wait nearby for a victim to withdraw cash. Most ATM robbery victims are women and were alone when robbed.

Most claim that they never saw the robber coming. Most ATM robbers use a gun or claim to have a concealed weapon when confronting the victim and demanding their cash.

Here are some tips that can make the ATM process safer:

Use ATM machines in well-lit, high-traffic areas. Don’t use ATM machines that are remote or hidden behind buildings, pillars, walls, or away from public view. Beware of obvious hiding places like shrubbery or overgrown trees. ATM robbers like to have the element of surprise and no witnesses.

Robbers like good escape routes such as nearby freeway on-ramps or high-speed thoroughfares.

Choose an ATM that looks and feels safe, even if it is a couple of miles out of your way. Try and limit your use to daylight hours. Try to rake someone with you if you have to go after dark. When you drive up to an ATM, look around the area for any suspicious persons. If you see anyone suspicious standing nearby or sitting in a car, drive away. When you approach an ATM on foot be prepared and have your access card ready.
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Your personal finances have a lot more in common with a football team than you might think.

OK, I admit it. I like football. This season has been especially exciting to watch. Although I don’t understand all the strategies just yet, I enjoy watching the carefully planned plays. Sometimes they work, sometimes they don’t, but nevertheless, very fun stuff to watch.

As I’m watching the games, it occurs to me that football and finances have a lot in common. (I admit, sometimes it’s hard for me to turn my ‘work’ brain off, even in the middle of an exciting game). The plays are carefully planned, the teams spend countless hours practicing and strategizing, there is an experienced coach that guides the team to victory and they never give up.

Their goal is specific, understood by all and there is serious motivation to win. Do you see where I am going with this?

Your money matters, your financial roadmap, require the same mindset as those big, bad, burly football players. If you don’t have a specific plan in place, if you don’t practice and don’t have someone guiding you, you will probably not end up where you want to. When it’s time to send your kids to college, go on that vacation or retire, where are those funds coming from? What if you lost your job unexpectedly? Do you have reserves to fall back on?

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