How Investors Perceive the World

How Investors Perceive the World

A unique and humorous perspective on how investors view international opportunities.

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Friday Morning Reading

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Investments

Why Are Bond Yields Rising? (Pragmatic Capitalism)
Bullish Sentiment Falls Again (Bespoke)
Why Core ETFs are Making a Resurgence (Index Universe)
What are the Benefits of International Diversification? (CBS Moneywatch)

Economy

Why It is Time for the Fed to Stop QE (Inside Investing)

Companies

Pepsi is Engaged in Talks for an Acquisition (Daily Finance)
Amazon Enters the Grocery Business (Daily Finance)

Personal Finance

Want to Save Thousands of Dollars over Your Lifetime?  Learn How to Cook. (20 Something Finance)
Money and Happiness Are Related (Harvard Gazette)
Money and IQ Scores (Harvard Business Review)

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How To Manage Debt When Your Investments Don’t Work Out

CFLR

By: Al Krulick of Debt.org

Regardless of what your broker, your brother-in-law, or that out-of-work actor on the TV commercial tells you, there is no magic formula to winning at the stock market.
Sure, there are better and worse strategies, but if we could all predict how the Dow Jones or the S&P would do on any particular day, week, month or year, we’d all be Warren Buffet. And even he must have some losing streaks from time to time.

So your investments didn’t quite work out the way you had hoped. Maybe it wasn’t stocks. Maybe it was a real estate investment trust that didn’t pan out; maybe you got caught with too much gold when gold took a dive; maybe your horse didn’t place or you bet on the wrong basketball team.

What matters is that, for whatever reason, the funds you thought you had, you don’t have anymore. They’ve decreased, shrunk or vanished altogether and now instead of being flush, your debts are staring you in the face. Somehow, you’ve still got to manage. Here are some tips:

Don’t Panic – There’s no point in freaking out or blaming yourself, your financial advisor, or even your brother-in-law. And the guy in the TV commercial can’t hear you no matter how loudly you yell at the screen. Anger and anxiety will just prevent you from thinking rationally. So calm yourself and run the numbers down to your last dime. What do you have in your savings and checking accounts, retirement plans, insurance policies, home equity, projected income? What are your short and long term debts? Which debts are secured, like your mortgage or car, and which are unsecured, like your credit cards.

Keep the Lights On – Make your secured debts your highest priority. You need a place to live and transportation, so pay your mortgage and your car loan, or the bank will come running – not to mention the repo man. Also pay your utility bills. You can’t write checks in the dark. Contact your unsecured creditors and explain your situation. If you can show them that you’re attempting to settle your accounts, but need a little more time or perhaps a payment modification, they can surprisingly understanding.

Get Help – If your unsecured debts, like overdue credit card balances are seriously in arrears, you may want to consider contacting a debt relief company with experience in debt settlement and debt consolidation. A debt settlement plan can help you reduce the amount you owe and/or arrange for a reduction in late fees and penalties. Debt consolidation can help lower your overall interest rate. A credit counseling agency can help you put together a debt management plan that will allow you to chip away at your debts over time.

Change Your Spending Habits – Whether your investments turned sour due to your own bad decisions or to factors beyond your control, you’ve still got to cut your expenses. Put the credit cards away, stop impulse shopping sprees, eat more dinners at home and postpone all non-essential purchases. Most important: Don’t run up any more debt while you’re still trying to repay the ones you already have.

Stick With It – Managing debt requires commitment and perseverance. Even successful investors had down periods they probably wouldn’t want to go through again. Think long-term and have the determination to plod through this rough patch. There may not be a real pot of gold at the end of the rainbow, but your personal financial storm will pass. It always has.

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TED Talk Tuesday

Marketing guru John Gerzema argues there is an upside to the Great Recession.  An uptick in the national savings rate and changes in the way consumers are spending their time and money points to the possibility that the same consumer who contributed to the recession can potentially be the force that leads America out of adverse economic times.  Gerzema supports his claim by identifying four major value shifts that are driving shifts in consumer behavior.

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Friday Morning Reading

Stock Market

Is the market finally correcting? (Charts etc.)
Market’s Reaction to the Broken Record That is Ben Bernanke (Reuters)
Crediting the Fed for High Stock Prices is Scapegoat for Bad Analysis (A Dash of Insight)
There Goes the Nikkei… (Pragmatic Capitalism)

Personal Finance

Most Important Piece of Financial Advice for College Graduates (The College Investor)
Average Tax Refund: How Does This Year Stack Up to the Historical Average? (20 Something Finance)
FDIC Insurance Coverage: What is it? How much? Who is Covered? (20 Something Finance)
Why You Can’t Keep Your Existing Healthcare Plan Under Obamacare (Mish’s Global Economic Trend Analysis)

Investments

How Commodities Can Help a Portfolio (CBS Money Watch)
A Reason To Own Bonds (Rock Ferri)
When Stock Markets Start Falling What’s the Best Investment Strategy (Investor Junkie)
A Lesson From Warren Buffett: Doubt Yourself (Wall Street Journal)
Looking Up a Fund’s Holdings (Oblivious Investor)

Companies

Seven Fun Facts About Corporate Taxes (Harvard Business Review)
How Jamie Dimon Became a Risk Factor (Harvard Business Review)

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TED Talk Tuesday


Where do personal finance and linguistics overlap?  Yale economics professor Keith Chen explores the relationship between attitudes towards the future and the language used.  His paper is in the process of being published by the American Economic Review. Chen has found a correlation between two different language types and remarkably different rates of saving for the future.

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Monday Morning Reading

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Personal Finance

Gambling Addiction to Financial Recovery: The Story of Linda Mannerberg (Daily Finance)
Dear Class of 2013: You’ve Been Scammed (Marketwatch)
Why You Need a Roth IRA (Kiplinger)
Challenging the Gender Gap in Financial Knowledge (New York Times)

Economics

Weekly Indicators (Bonddad Blog)

Mergers and Acquisitions

Yahoo agrees to buy blogging service Tumblr for $1.1 billion (New York Times)

Investments

Don’t Ask an Economist for Investment Advice (New York Times)
Stress Points: What High Frequency Data Tell Us About Hidden Tail Risks (PIMCO)
Chicago Mercantile Exchange: Growth through Niche Markets and Innovation (The Economist)

Money

What is Bitcoin?

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