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15
Sep

Do you fall for an example not related to you?

Someone once owed a company I worked for money. Their defense basically consisted of: “I have always paid my debtors in the past and I’ll pay you guys.” Our lawyer’s response was “what does your payment history with others have to do with your debt to us?”

Using examples not related to you (for lack of a catchier term) is an old negotiating trick that works surprisingly well. How many of us who have had bad dating experiences may have heard the line “I have treated all of my girlfriends/boyfriends well” only to be treated poorly? Alternatively, the smooth salesperson always uses the “I have sold hundreds/thousands of these widgets/big ticket items/mutual funds and all my clients are happy.”

If one really broke down this types of lines, two problems immediately come to mind. Unless you happen to have a really small social circle or live in a small town, it would be difficult to verify whether your partner has actually treated all his former partners well (…and, regardless, would you really want to know how many ex’s he/she had?) or whether the salesperson actually had hundreds or thousands of satisfied customers. Thus, there is foremost

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14
Sep

Blue Chips Gain 46.24 (Market Update)

Stocks closed at the days highs, tacking on modest gains as investors searched for a clear market direction after a package of mixed economic data and Japan’s strongest attempt in years to tame its soaring yen.

The Dow Jones Industrial Average added 46.24 points, or 0.44%, at 10572.73, helped by a 2.9% climb at Travelers and a 1.7% gain at Kraft Foods. Pfizer also rose 1.1% as health-care stocks led the broader market.

The Nasdaq Composite advanced 0.50% to 2301.32, while the Standard & Poor’s 500-stock index edged up 0.35% to 1125.07.

Traders said that the recent rise in investor optimism has helped push the market up to the top of its tight trading range. One key signal will be whether the S&P 500 can break through the 1130 level.

“There’s a lot of uncertainty in the U.S. in terms of what direction where we’re heading in,” said John M. Burns, portfolio manager at Bingham, Osborn & Scarborough LLC.

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12
Sep

Banks Lead U.S. Stocks Higher (Market Update)

By Steven Russolillo

Stocks rose, led by a surging financial sector, after regulators agreed to give global banks more time than expected before imposing tougher capital requirements.

The Dow Jones Industrial Average extended its rally into a third week and was recently up 74 points, or 0.7%, at 10535. The blue-chip average is up more than 5% this month.

Financial stocks led the Dow higher, with J.P. Morgan Chase up 3.5%, Bank of America rising 2.9% and American Express gaining 2.4%.

The Nasdaq Composite rose 1.7% to 2280. The Standard & Poor’s 500-stock index gained 1.1% to 1121, climbing into positive territory for the year. All ten of its sectors posted gains, led by the financial sector’s 2.1% rise.

“We had a real buyer’s strike in late August and it seems people are finally getting more in the mood to buy stocks,” said Craig Hodges, president of Hodges Capital Management. He noted the S&P 500 breaking through its 200-day moving average as a key development.

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I was watching TV this weekend and kept seeing commercials about , which is an online calculator that supposedly helps you plan for retirement by telling you how much you need to save. Here’s one of them if you haven’t heard of them before:

After trying it out and finding out my 7-digit number, I wanted to see what was “under the hood”. Monte carlo simulations? Spits out random number to mess with your head? Maybe my Google-Fu is weak, but I couldn’t find anything except this from ING dated 2009. The final numbers don’t match up, but it does provide some insight into how the current calculator works. Using this

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Q. I am starting over after losing in real estate. I am looking for some inexpensive investments, like penny stocks. Recommendations? —Gary Hancock, Yellville, Ark.

Are you a gambling man? That’s what investing in penny stocks usually amounts to. They’re typically issued by very small companies and have share prices below $5. Research is often slim or nonexistent, and trading volumes can be light. In other words, they’re high risk. An investor looking to rebuild wealth is far likelier to succeed with a well-diversified portfolio. One option: Start with a low-cost balanced fund (one with a mix of stocks and bonds), and add to positions when you can. You won’t get rich quick, but you won’t lose your shirt either.

Q. With Vanguard offering no-commission ETF trades, should I convert my index funds to their ETF equivalents? —Chad Warner, Holland, Mich.

Commissions are a potential drawback of investing in exchange-traded funds, but now a handful of firms-including Charles Schwab, Fidelity Investments and Vanguard-offer commission-free trades to their brokerage clients for select ETFs. (Ex

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