I love to travel and wanted to go to Europe in the summer, however the current dollar situation is going to make it a very expensive proposition. Currently one euro cost 1.5 dollars, this is just insane. It is very expensive for us to go and enjoy Europe. Most people think that this will only affect the travel to Europe but that is not true. I was in Jamaica 6 months ago and shops in Jamaica offered better prices for customers who paid with euros.

Just incase you plan on going abroad anytime soon be prepared to spend more then you bargained for. I’m not sure if there is any way to hedge your exposure when you travel but it would be nice to know who can give you the best exchange rate before you go abroad. I’m actually contemplating purchasing euros now and holding them until I travel. Although in the long term I’m very bearish on the euro/dollar, I don’t think the exchange rate will reverse in the near future.

Popularity: 27% [?]

What do people think about buying a foreclosure? Is it a good idea to buy a foreclosed property? Are there any cons to buying a foreclosure? Where can I find some info on foreclosures?

I’m currently contemplating buying a house in the next year and one idea that comes to mind is purchasing a foreclosed property. I’m not really sure where to go to find the information or how the process works but to me it seems like a good idea. From what I have recently read foreclosures are up 57% in January compared to a level a year a go. With the economy in a downturn I don’t see why I wouldn’t want to take advantage of the abundance of foreclosed property currently on the market.
Any opinions on the subject?

Here is an article on the current foreclosure situation
http://money.cnn.com/2008/02/26/real_estate/foreclosures_rise_again/index.htm?postversion=2008022608

Popularity: 15% [?]

Mutual funds are not traded throughout the day. When is the best time to buy shares in a mutual fund then? If I initiate a transaction during the day, the prices of the shares in the fund are based on the end of day prices of the stocks in the fund. At least that’s my understanding of it.

Is it worth it to try and buy funds at a low price in my IRA? Or should I just buy $250 worth at the end of each month?

Can I wait until the end of the day to see how the market went, and decide to buy shares in my Mutual funds after the market is closed?

Popularity: 19% [?]

This is an excellent article from globalpensions on investing. With the U.S. market in turmoil over the sub-prime debt and the weakening economy it maybe a good idea to invest abroad. I’m not an expert on international stocks or markets but it seems logical to try to diversify with international investments. If the pension funds are moving toward emerging markets is this a place an individual investor could play in?

http://globalpensions.com/showPage.html?page=gp_display_feature&tempPageId=702495

Sweet spot in the crisis

by Keren Holland 21 February 2008

Having remained relatively untarnished by the sub-prime fallout, emerging market debt is looking increasingly good to many pension funds. Keren Holland reports

As the credit crunch causes pension funds to take a closer look at their asset allocation, emerging market debt (EMD) is proving to be a winner.

Jerome Booth, head of research at Ashmore, said many investors were concerned they had too much in US holdings and were looking to EMD as an alternative. He said: “What we are seeing is a lot of central bank money, but also pension fund money.

“This is very much a risk reducer and a risk diversifier. People are realising they have far too much invested in the US, they need to reduce that, and this is the best way to do it.”

Two events during 2007 had a major impact on EMD, according to Booth. Since the summer, many panic stricken funds such as hedge funds had come out of the asset class because of ongoing problems related to the credit crunch. In addition, investment banks had reduced their exposure ahead of the year end.

He said: “All of that money came out and it hasn’t really come back in because they have continued to have problems since the summer.

“The more dedicated investors and big institutional investors just bought into that and it has gone higher and higher.”

Julian Lyne, global head of consultant relations at HSBC, said pension funds were increasingly investing in EMD.

He said: “What we are seeing is a number of pension schemes making direct allocations to EMD, what we are also seeing is allocations from fixed income being diversified into emerging market debt.”

One example was a client which had a high yield mandate and, as part of that, wanted to increase its exposure to EMD.

He said: “It is coming from a whole range of sources, and it has been gathering pace over the last 12 to 24 months.”

As a result, HSBC launched a new local currency fund which allows the manager to allocate to both local currency and hard currency.

Lyne said this gave the fund a much broader opportunity set. He said: “A lot of money has flowed into the area so it is not just a question of following the proven track, we believe it is important the fund manager is aware of how the market is changing, how emerging markets are changing and where the best opportunities for investors are.

“We have seen quite a lot of interest from pension schemes which are looking to have their fixed income manager have a particular target, perhaps an absolute return target, with the opportunity of investing in emerging market debt, both hard currency and local currency.

“I think what you are really going to see going forward is an allocation to a fixed income mandate with an absolute return target, where there is the potential to use EMD as one of a number of tools.”

Glyn Jones, CIO of specialist investment consultancy Psolve, said it was only the very large pension schemes that were investing directly in EMD, while smaller ones were finding alternative routes to the asset class.

He said: “Not many pension funds apart from the very large ones are investing directly. It is very difficult for smaller and medium-sized pension funds to have the time to govern anything other than a very simple investment strategy, so what we launched was an implemented consulting service, which is where we use Franklin Templeton. Our implemented consulting clients are using EMD without consciously having taken the decision themselves, having delegated the implementation of their strategy.”

Pension funds were also gaining exposure through rotational bond mandates, according to Jones: “We do not see many clients who will make a static strategic allocation to EMD. It does provide returns over the cycle but it tends to go through phases of good returns and bad returns.

“We think one of the important things to do is to have the ability to take that risk off the table if the asset class is looking poorer. We are seeing broad based bond mandates where the manager can make allocations to EMD, but also has the ability to allocate to other fixed income markets as they deem appropriate.”

Hard or local currency?

When it came to a choice between hard currency and local currency, most managers highlighted local currency as the place to be. Booth said local currency emerging market debt tended to be attractive because it provided a hedge against dollar weakness.

He said: “If the dollar were stable now, I would expect similar levels of return in dollar debt and local currency debt over the next year, but that is not what I expect.

“I am expecting significant further dollar weakness and with that potentially more performance com

ing out of local currency debt. So instead of maybe 15% return, you may get 10% to 15% in addition to that.” Simon Lue Fong, head of emerging debt at Pictet Asset Management, said local currency debt had emerged as its own asset class and demand had been strong. He said asset allocation models were showing investors they should have some investment in local currency debt.

He said: “In effect, investors are underweight this asset class, they have never invested in it because it didn’t exist, and the flow of money that has – and is going to continue to – come into this market for the next two to four years is quite large. nsions.com

“We get a good insight into this because people have asked us to come and talk to them about what this asset class is and that has ranged from everyone from central banks, pension funds, insurance companies and private wealth firms to private banks – almost every type of investor you can think of.”

Good performers

Lue Fong said the funds that performed best did well for two reasons. Firstly, those who started early had a first mover advantage because they could get assets invested before others.

In addition, as demand for the asset class continued to grow, prices were being pushed higher. Lue Fong said: “Everyone is trying to get into this game now – everybody wants a piece of this because the demand is there.”

Peter Eerdmans, portfolio manager, EMD, at Investec Asset Management, said the firm’s focus was also on local currency EMD. He explained: “We think that is the market for the future and one that will be growing. It offers many opportunities and in our expectation also offers superior returns to dollar debt.

“A lot of pension funds that have made allocations to EMD over the last four or five years will have done so to hard currency emerging market debt.

“I would argue they should at least consider adding or switching some of that into local EMD or even going for pure local EMD.”

However, Eerdmans said it would take time for pension funds to realise the benefits in comparison to hard EMD. He said: “It did make a lot of sense to allocate to hard currency EMD three or four years ago when local debt was still in its infancy, but local currency EMD has seen a lot of growth, benchmarks have been developed and managers have developed specific processes, so I think now is the time to start considering it.

“I think with the right education, pension funds wouldn’t be that hesitant. Local debt obviously introduces currency risk because you will get exposed to the currencies of these countries. But I think many pension funds will view that as an opportunity because these currencies are likely, in the medium to long term, to appreciate against developed market currencies as they continue to develop and offer higher yields.

“That story of positive and structural reforms in emerging markets, coupled with currency strength, is a story that pension funds find quite appealing.”

Claire Husson, portfolio manager for Franklin Templeton’s EMD-dedicated team, said the latest Emerging Markets Trading Association Quarterly Bulletin showed that 71% of EMD turnover was in local bonds in Q3 2007, even more than in 2006 when local bonds represented around two thirds of foreign capital flows in EMD.

However, she warned care should be taken with local currency bonds, because with increased demand, the positive correlation between emerging markets and the rest of the global capital markets had dramatically increased. She said one of the best places to invest was in new emerging markets, or frontier markets, which provided opportunities because they presented a low correlation with the global capital markets, in particular Africa and Central Asia.

She added: “Illiquidity can be very supportive of the asset prices and some of these issuers have series of infrastructure projects to finance with new sources of government revenues and financing.”

In more mature emerging markets, or converging markets, Husson said new instruments such as inflation-linked bonds, debt instruments linked to contingent liabilities and corporate bonds were providing opportunities. But she said exploiting these opportunities required local presence or local connections, along with constant interaction with local market players and local representatives of financial institutions.

Popularity: 29% [?]

It’s tax season! How are people doing their taxes? What tax services do you guys recommend? Any new tax laws we should watch out for?

I’ve personally been using HR-Block on line. It’s rather easy to use and my information is automatically stored from last year. Also for a small fee my taxes get checked by a professional and HR-Block takes on the liability if I screw up.

Popularity: 13% [?]

I want opinions on Siri stock. I’m really considering buying some Sirius stock because of the potential merger with XM. If the two companies merge that could potentially mean a huge bump. As of February 19th it has officially been 1 year since the two companies have been fighting for the merge. As the months go by I think the government is met with more and more pressure because people are realizing that it’s a joke how long the merger talks have lasted when companies like Exxon and Mobil were able to merge after a day of hearings.  I don’t really want to get into the merger but I also want to know if the merger doesn’t go through what do you guys think of satellite radio’s future? Right now the biggest growth area for satellite radio is coming from new car buyers. XM is currently installed in GM, Honda and Hyundai. Sirius on the other hand is currently being installed by Chrysler, Ford and BMW. Do you guys think satellite radio will take off the same way satellite television took off? There is a price to pay when getting satellite radio but it is also geared more towards what the consumer wants. Terrestrial radio is currently dieing with ratings plummeting could this potentially become a big opportunity for satellite radio which has been growing at a rapid pace.

Popularity: 24% [?]

As I was thinking about getting another credit card, it got me thinking “How many credit cards is too many?” I have been thinking about opening up another card, and another soon after that. After looking over my year end summaries on all my cards the majority of my purchases are in categories which do not have special rewards bonuses. I receive only 1% back on my biggest purchases every year. If you are like me and you are maximizing your cash back rewards, you want a card that benefits you the most where you spend the most.

So how many cards is too many? (more…)

Popularity: 28% [?]

Recently my friend approached me with an interesting question. He bought a house a few years ago at the top of the real estate bubble. Obviously not a smart move but as we say hind sight is 20/20. His house has depreciated in price; however he is still paying taxes on the original price of the house. Obviously he would like to reduce his tax burden but as a new home owner he is does not know how to approach the problem. I’m not sure how many people have run into such a problem but it would be interesting to hear how you solved it. I have found an article that addresses this problem directly but any other ideas would be great.

http://money.cnn.com/2008/02/12/real_estate/tax_squeeze.moneymag/index.htm?postversion=2008021306

(Money Magazine) — Sigrid Crane couldn’t understand it. The tax assessor for the town of Vienna, Va. pegged the value of her home in 2007 at $570,000, up $20,000 from the year before, despite the fact that the local market had already gone south. Crane fought back - and won. She may soon have a lot of company. Property taxes have risen at more than twice the rate of inflation this decade. When home prices were going up at least that much, it was hard to complain. Besides, since many locales re-assess properties to their “true market value” only every few years (in some cases even less frequently), an owner in a particularly hot neighborhood made out. The value of his property rose faster than one across town, but the tax burden didn’t shift. Oh, how times change. Now every major national index has recorded a drop in home prices, and plenty of once sizzling markets have gone stone cold. That doesn’t mean homeowners in suburbs around Boston, New York City, Miami and Washington, D.C. can expect a friendly note from the tax man lowering their assessment. As Harvey Levinson, chairman of the Nassau County, N.Y. board of assessors, notes, “If we reduced everyone’s assessed value, the tax rate would just have to go up.” Nevertheless, the pullback in prices could give you an opportunity to ease your property tax squeeze. Fewer than one in 50 homeowners try to appeal assessments even though up to 60% of properties are overvalued by assessors, according to figures cited by the National Taxpayers Union. So if you file an appeal that’s based on more than your indignation, you’ve got a good chance of success as long as most of your town doesn’t do the same. “The bottom line is that if homeowners aren’t focused on what has happened in their marketplace, they are paying too much in property tax,” says John Brusniak, a Dallas property tax lawyer. Depending on how far you’re forced to take an appeal, expect to spend from five to 20 hours on it. Most of the time you won’t need a lawyer. And with potential payoffs in the thousands over many years, why let it slide? If your assessment has you banging your head against the desk, follow these steps to bring down your bill as painlessly as possible.

1. Learn your system
Taxing authorities use different methods to calculate home values. Some look at recent sales of similar homes. In rural areas where sales are few, they might estimate the cost to rebuild. Others use some combination of methods. Call your assessor’s office and ask how it pegs values. In some locales your tax liability is based on a percentage of your property’s estimated value. You’ll want to know what that percentage is so you can figure out whether the actual value the assessor is assigning to your home is fair.

2. Get your assessor’s evidence
The assessor didn’t pull his estimate out of a hat, even if it seems that way to you. Visit the tax man’s office and ask for the evidence used to value your home. Get your home’s property card, which lists basic details like lot size, square footage and number of bathrooms.

3. Make sure the description is right
When municipalities or counties re-assess property values, they typically hire an outside contractor who looks at hundreds or thousands of homes in a tight time period. The appraiser has to come up with shortcuts. Three vent stacks on the roof? That must mean three full baths. Never mind that an upstairs laundry room could be the culprit.

The assessor’s file should contain a worksheet that the appraiser filled out during inspection with addresses of homes he compared with yours. That was a key to Crane’s success. The appraisal that was done on her 1960s house (still with vinyl siding and pink bathroom fixtures) valued it as though it were comparable to one of the area’s new brick-and-stone McMansions. In the end her assessment was lowered by $20,000, saving her around $200 a year.

4. Build your case
You won’t have much time to file an appeal, generally 60 days or less from the time your annual tax assessment was mailed. (That typically occurs between late spring and late summer.) And you can’t just march into an appeals board with a newspaper article showing price declines and expect to win.

If the issue isn’t a simple error on your property card, you’ll need to arm yourself with recent comparable sales or assessments that show your house has been valued too high. You can look up your neighbors’ home valuations at the assessor’s office. The easiest way to come up with comparable sales is to ask a real estate agent for help.

If you’re in a new community, she might find homes with an identical floor plan that sold for thousands under your appraised value. Your ideal comparable homes will be of the same square footage and age as yours and sit on almost the same size lot. To make your case you’ll need at least five sales - 10 is better - from around the time of your assessment. Your agent might charge you a $50 to $100 fee, but the expertise is worth it.

Take a critical eye to the homes and make sure there aren’t circumstances that an assessor could use to explain a huge difference. Is one of your comps next to the railroad tracks? Did you just replace the roof on your 25-year-old home?

Put together a spreadsheet listing the addresses of the comparables, the sales prices and dates, the price per square foot and a description of what makes the homes similar to or different from yours. Finally, to complete your homework, drive out to the properties and take photographs of the exteriors.

If you can’t find comparable homes that sold for at least 10% less than your property’s assessed value, throw in the towel. Some areas require the valuation to be off by even more than that to win an appeal.

5. Meet the assessor informally
Go over the evidence you found in support of a lower value. This meeting might be hard to arrange in larger towns, but it’s worth trying. If the assessor more or less agrees with you, the rest of the process will be a lot faster and smoother.

Attitude is important. You’re showing the assessor how his appraiser messed up. Don’t add to his defensiveness by tossing verbal grenades like “I pay your salary.” If the assessor won’t budge, make him explain why. Take notes: He’s handing you his battle plan for the formal appeal.

6. File the appeal
Usually this is with a county board. Hand deliver it and get a receipt or use certified mail. Within a couple of weeks you should get a notice acknowledging receipt, but depending on your county’s size, you could have a long wait for a hearing. David Jantzen, an IT consultant in Atlanta, filed an appeal last summer, but he still doesn’t have a date. “The wait time is crazy,” he says.

Most appeals are heard over the course of a couple of weeks. Before your day arrives, attend a hearing to get accustomed to the proceedings. Certain board members might raise the same objections all the time. So make sure you’re ready to answer those questions.

Prepare visuals with photos of your home and the comparable homes, then write out and rehearse your presentation. Keep it to eight minutes or less. Brevity will score you points and leave time for the board to ask questions.

7. You lost?
First, you’ll likely appeal to a state agency. If that fails, you’ll probably have to go to court. At this stage of the game you’ll need help from a lawyer and probably an appraiser, says Cathy Steele, a property tax attorney in St. Louis. That needn’t cost a fortune. You can retain a lawyer for a contingency fee that varies based on your potential tax relief. An independent appraisal will cost $400 or so.

The state, which will be handling hundreds of such appeals, wants to end the dispute as quickly as you do. “Before trial, these offices knock out as many settlements as they can. They’re going to voluntarily give at least some relief in 95% of cases,” says Melinda Blackwell, chairwoman of the American Bar Association’s property tax committee.

Jantzen, who hopes that his appeal won’t have to go that far, suspects that he’ll be able to knock thousands a year off the tax bill on his Atlanta property, recently assessed at $1.5 million. “Homes on my street have been assessed at less than $1 million, and others have been on the market for years,” he says. “It would be irresponsible not to appeal.”

Popularity: 24% [?]

I just started filing my tax return and thought my IRA contributions were tax deductable. I maxed out my IRA this year putting in $4,000. I get a message from Turbo Tax that it is not deductable because I made too much in that year? Does this sound right?

Popularity: 15% [?]

Interest on a checking account is not something people generaly look for. For a checking account people want no fees of any kind and free checks. Most internet banks offer free ATM renbursment. They can offer this service because it is much cheaper for these banks to pay back fees when you use them, rather than having the overhead of installing their own ATM’s across the country or world. Having a checking account that pays interest is a bonus.

Most local banks do not offer interest on their checking accounts. Bank of America checking accounts have a .05% APY. This is essentually no interest. Bank of America also has high monthly maintenace fees, and a large minumum balance to avoid fees. Currently, to avoid fees, their minumun balance is $10,000. Student checking accounts have much lower fees if any at all. If banking locally has no clear benefits people with these accounts should look else were for checking. Students should be looking into other checking accounts after they graduate because their free checking account will soon expire.

Here is a list of some great Online based free checking accounts:

bankrate

Popularity: 16% [?]