Complex Financing

If you’re like most people, looking back over the past few years can leave a bitter taste in your mouth in regards to personal finances.  One good thing about making mistakes…you get to learn from them!  Moving forward, we all have an opportunity to make changes in how we manage our money and investments to avoid some of the mistakes of the past.  Reviewing your past investing strategies can help you pinpoint areas that could use a bit of tweaking.  Here we look at how you can adjust your investment strategy to better serve your needs.

Take Stock

Whether you’re rich or poor, everyone has been affected by the recession.  What worked in the past?  What didn’t?  Was your emergency fund too small to survive a lay-off?  Or was it large enough at first, but you ended up squandering your savings on non-emergencies?  Did you panic and sell your investments at the bottom?  Honest answers to these questions will help you decide what, if anything, you need to adjust going forward.

Consider The Risk

If you’ve spent years building a nest egg only to see it cut in half, you might be considering one of the following paths:  an aggressive approach to quickly rebuild your savings or a more cautious approach to limit future loss.  I urge you to avoid giving into either impulse.  What’s done is done, and you can’t get your money back.  Going for broke is obviously extremely risky, but so is investing so conservatively that you’d have no chance of reaching your goals.  It is important to reevaluate your risk tolerance in light of recent losses to determine if you were perhaps a little aggressive in your asset allocation.  If you panicked, you should adding more cash and bonds to your portfolio.  If, on the other hand, you brushed off your losses and had no trouble sleeping at night, you might even consider increasing your equity exposure.

Review Your Asset Allocation

Once you have determined your risk tolerance you should take a second look at your asset allocation.  Risk tolerance is only part of the equation, after all:  your need to take risk is at least as important as your ability to take risk in determining how to divvy up your investment dollars.  After much consideration, I decided to make a few changes to my Roth IRA allocation.  These tweaks were more about rounding out my asset allocation with a few minor asset classes than recalibrating its risk profile, however.

Stay The Course

When stocks are plummeting, it’s tempting to jump on the band wagon and follow what everyone else is doing:  namely, sell.  Likewise, when the market is going gangbusters (like it has been recently, especially REITs), it’s tempting to jump at what’s working right now.  It is imperative you do your own homework and that you adjust your investment strategy to reflect your own personal needs and comfort level.  What works for your neighbor, boss or physician may not be what is right for your situation.  Nobody cares as much about your finances as you do.  Only you can decide what asset allocation is right for you.

You should review your investment strategy on a regular basis regardless of the state of the economy because your needs and goals will change over the years.

The consumer credit market all but came to a standstill for months over the last year. But even worse is the fact that many consumers watched their credit histories destroyed after years of timely payments. Rising foreclosures, and credit card and loan delinquencies, have created many black marks on credit reports that will haunt consumers for many years.

Non mortgage consumer credit has been falling at a steady rate. As of September 2009 revolving consumer credit was still falling and had hit a 13.3 percent decline when calculated at an annualized rate. Though it is good that consumers are reducing their debt load, it also indicates less spending and spending is what spurs the economy.

But the fact is that millions of consumers are now wondering if those black marks on their credit history will prevent them from borrowing money in the future. The answer is: maybe. But that should not stop consumers from working on restoring their credit.

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As all of you no doubt have heard already, a massive Earthquake struck the poverty-stricken island nation of Haiti on Tuesday, killing tens (if not hundreds) of thousands of people and leaving many more homeless.  According to the U.S.

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There has been a hot topic email going around on the Internet in regards to the Ohio Bureau of Motor Vehicles and their plates expiration date. The article “Ohio BMV: Email Not True” found on whiotv.com summarizes the situation. Many Ohioans have received an email stating that the State of Ohio is trying to trick residents into paying more for the license plate renewal. The supposed month long grace period after the birthday was apparently going away and violators would be charged in an extra penalty to try and balance the budget. Many expected the Ohio DOI to be on top of this.
But state officials say this email isn’t true. Since 1989 the expiration date for plates has been on the actual birthday, not the end of the birth month like many misinterpreted. A spokesperson for the BMV stated there has been an increase in penalties for not having a sticker updated on time, but this was made very public in the Transportation Bill. Read more…

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If you’ve purchased a home over the past few years and applied for a mortgage loan, you probably remember how confusing the different terms and conditions in a loan agreement can be. Comparing loan costs between lenders has been nearly impossible for years because different lenders have different names for the same types of fees. With the financial industry struggling and under intense scrutiny to treat customers fairly, the mortgage process is undergoing an overhaul that should make mortgage documents more transparent and understandable.

With the new year came new laws that require estimates provided to potential borrowers by lenders to portray a more clear and accurate picture of the actual cost of the loan. H

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