TIE...buy buy buy

Insiders are gobbling up shares of their company's stock, I would suggest you do it too....yea yea yea, I know steel is out of favor and material prices are skyrocketing, however, this company is at a new low, has a solid dividend, has a great track record of year over year growth, a proven management team, and provides steel to developing, developed and emerging markets


All of this works in favor and like I mentioned above insiders are buying like crazy right now which is the best sign of all and furthermore they have averaged buying 762,000 shares per year over the last 5 years!!!!


BUY BUY BUY: here is the chart

adding a link for stretch IRAs

here is a great article I just found on stretch IRAs that probably explains them a lot better than I just did in my previous post. Check it out:

http://www.advisortoday.com/resources/stretchiras.html

Stretch IRAs

First off, I want to apologize for not posting lately. The market has been crazy and since I am in the middle of it, being in the financial industry, I've had a lot of work to do and too much on my mind to post. I will try and get back into a regular routine.

I received a comment from someone that wanted to know about Stretch IRAs. So this is what I will talk about in this post.

Starting off, you may be wondering what a 'Stretch IRA' is.

A Stretch IRA is a term used to describe an IRA established to extend the period of tax-deferred earnings, possibly over multiple generations. This IRA can be opened at any time. After the owner of the IRA dies, the beneficiaries will have the longest allowable period of tax-deferral on the required distributions of the IRA assets. The beneficiaries must start taking their required distributions in a timely manner once they inherit their portion of an IRA so it's important that each beneficiary is informed of the intention to 'stretch' the IRA.

With that said, is a Stretch IRA the right choice?

If you have enough money and income to fund your retirement without dipping into your IRAs, a Stretch IRA may work for you. Many older people put all or most of their retirement savings into tax-deferred IRAs with the intention of leaving these as an inheritance for their children. What they don't anticipate is the tax burden they are placing on their beneficiaries once they inherit the IRAs. A Stretch IRA can make this tax burden much less for beneficiaries once they inherit an estate. You will, however, need to review your Stretch IRAs periodically to be sure the beneficiaries are up to date.

So, how do you set up a Stretch IRA if it is right for you?

• The first thing you must do to set up a stretch IRA is choose the beneficiaries.
• Second, talk with a Financial Advisor. The IRA must be set up properly for your beneficiaries to benefit so you should work with a person or organization familiar with IRAs when setting one up.
• Next, you need to set up separate accounts for each beneficiary. If there is one beneficiary, set up one account. If you have multiple beneficiaries, you need to set up a separate account for each and designate the percentage of the IRA in the account. When the IRA holder dies, each beneficiary can choose to have their share distributed over their life expectancy.
• Lastly, you need to review the account with beneficiaries. It is important to let them know that they will inherit a portion of IRA assets upon your death.

Despite how helpful and beneficial a stretch can be, there is a possibility of a downside to a Stretch IRA. It may not be right for everyone. If you need the money in the IRA for retirement or before your retire, the stretch arrangement will be of no benefit. The tax laws might change before your heirs have a chance to benefit from the stretch IRA and might end up with a tax burden. You must review your stretch IRA arrangements at least annually so that your beneficiaries are kept up to date.

Hope this helps. If there are any more ?'s regarding these leave a comment and I'll get to them.

Retirement planning is key and the more that you can sock away sooner, the better. Keep that in mind. The most powerful financial tool is compounding, that year over year appreciation will make your assets grow a great deal. It is then important once you have the assets and a big sum of money to plan accordingly.

ETFs

Ok, so today I'm gonna give my 2 cents on ETFs: what they are and why I think they are very beneficial.

To start off, ETF stands for exchange traded fund. It is essentially the exact same thing as a mutual fund, but it can be traded throughout the day, whereas a mutual fund is priced and redeemed or bought after the market closes.

ETFs generally make diversification pretty easy, have low expenses, and are tax efficient. Because ETFs can be bought, held, and sold cheaper than mutual funds, some investors invest in ETF shares as a long-term investment for asset allocation purposes, while other investors trade ETF shares frequently to implement market timing investment strategies. There are several advantages of ETFs, I'll list a couple below:

1. Lower costs - ETFs generally have lower costs than other investment products because most ETFs are not actively managed and because they don't have the costs of having to buy and sell securities to accommodate shareholder purchases and redemptions. ETFs have lower marketing, distribution, and accounting expenses, and most ETFs do not have 12b-1 fees (these are just another management fee mutual funds have). All in all, they are considerably cheaper. Most charge b/w .10%-.25% whereas mutual funds are usually around 1.5%, considerably more expensive.
   
2. Buying and selling flexibility - ETFs can be bought and sold at current market prices at any time during the trading day, unlike mutual funds, which can only be traded at the end of the trading day. As publicly traded securities, their shares can be purchased and traded using stop orders and limit orders, which allow investors to specify the price points at which they are willing to trade. That is beneficial b/c you can set a price on an order and if teh ETF hits that price it will be bought in your account without you having to constantly watch the price every day.
   
3. Tax efficiency - ETFs have lower capital gains, b/c they usually have low turnover of their stocks or bonds (turnover is when a fund buys/sells holdings). While this is an advantage they share with other index funds, their tax efficiency is further enhanced because they do not have to sell securities to meet investor redemptions, which occurs when an investor sells a large holding and the fund has to liquidate to generate the cash.
   
4. Market exposure and diversification - ETFs provide an economical way to rebalance portfolios and asset allocations and to use cash by investing it quickly. The majority of the ETFs out there track or mirror an index, like the S&P or the Dow, but recently actively managed ETFs have grown in popularity. There is a great website, etfconnect.com, in which you can search for ETFs of all types. ETFs offer exposure to a diverse variety of markets, including broad-based indexes, broad-based international and country-specific indexes, industry sector-specific indexes, bond indexes, and commodities. Do a search and find one that is appealing to you. For instance, if you are interested in clean, renewable energy and companies that produce that, you may look at investing in PBW, a Powershares Clean Energy ETF.
   
5. Transparency - ETFs, whether index funds or actively managed, have transparent portfolios and are priced at frequent intervals throughout the trading day.

These are some reasons I like and recommend ETFs. As always do a little research on your own and form an opinion as to whether you might be interested in them.

Sim City (Grupo Simec)

SIM = Grupo Simec = It is a Mexican company. They manufacture and sell iron and steel products. They export products to Central and South America, Canada, and the U.S. The stock is trading at $15.44/share, just off of its 52 week high of of $15.85. The annual low was $8.50. It does not pay a dividend and is strictly a growth play.

I usually don't like stocks that are near the high because I like having a lot of upside, but SIM is undervalued and Mexico is committed to increasing and improving their infrastructure. The stock also has a couple buy ratings and has most of the market share in Mexico. Its biggest clients are however the U.S. and China, believe it or not. We all know the economic boom that China is on and the amount of steel they require to build, I kid you not, a new city a week!

Furthermore, Simec is the second-largest producer of rebar in the world and the largest steel producer in Mexico. It has global exposure with 50% of its sales in Mexico and 50% outside of Mexico, which gives it some protection against country specific downturns. Overall, it is a good sound company that is likely to be a great long-term investment due to increasing demand & increased prices for steel.

Chart is below:

I am also going to post a great story from a book I read in my next post. Check it out.

When times are tough....

This is an excerpt from the novel The Pep Talk, co-authored by Kevin Elko and Bob Shook. It features stories taken directly from pep talks given to college and professional football teams the night before big games.

In one of the National Championship games, the University of Miami was playing the University of Nebraska in the Rose Bowl. In the locker room was a unique player named Joaquin Gonzalez, who grew up in Cuba and moved to Miami. Joaquin had perfect SAT scores and was offered an academic scholarship to Harvard but decided to play football at the University of Miami. What I often do when I speak to a football team is throw the football to a certain player and ask them to speak on how they should mentally prepare for the big game. Being extremely bright, I thought I would test Joaquin and see what he would say. When he got the ball he stood up and said, "I expect Nebraska to be the toughest team we ever played. Moreover, I expect the player across from me to be equally as good. As a result, I will bring the best me, not take a play off and maintain that intensity throughout the game." He went on to say, "My sporting blood is up and I am prepared for the challenge." That spectacular young man set the tempo and the game was not close as Miami dominated and won the National Championship.

The following year, the University of Miami was on a long winning streak and was playing Ohio State for the National Championship in the Fiesta Bowl. Again, I threw the ball to who I thought was another bright player. He took the ball, stood up and said, "Ohio State does not belong in this game." "I will wipe up the field with the guy across from me." Miami lost the game and the National Championship.

People are frequently saying that things are so tough right now or asking why things happen to them. What I would now say to them is similar to what Joaquin said. "Get your sporting blood up." Tough times will bring out the best in you. Tough times are a good thing. They let you step back and really assess and evaluate your life situation and your priorities. Tough times will not defeat you, but throwing personal discipline to the wind because you think times are too tough will defeat you.

Easy or tough, the price of winning is the issue. I remember the day that the racehorse Smarty Jones died; the horse's owner was quoted as saying, "The price of love is grief." I don't really know why, but that quote really hit me. I guess I thought love was free and took it for granted. Then I realized that nothing is free, we have to pay a price for everything we desire. This is evidenced in our own lives and the lives of others around us. I challenge you to look at what you love in life and make sure that you enjoy it while it lasts, because there will come a time when you won't be able to enjoy it anymore or as much as you used to.

This last paragraph reminds me of something. A friend mentioned to me that they recently got out of a long term relationship, one in which they thought that the person they were seeing would turn out to be the person they married. They said, "I now know how someone can die of a broken heart. But that being said, I feel good feeling bad." In other words, this person's broken heart was a price well worth paying for the love he gave and received because it really showed him what he had lost and how special it was. I guess that's why people say "you don't know what you have until it's gone."

Like Joaquin in the aforementioned excerpt, expect things to be hard and then it doesn't matter. After you make the decision that things are hard, manage the decision, and decide to bring the best you have to offer. Pay the price and stay on your day to day process. Give all you got, every minute of every day. It will be difficult but if you do this...you will not be defeated!

................................

I was thinking about what to write today and it just struck me; why do I invest? So I started making a list of all the reasons why some extra money would be beneficial in the future, and realized that had I had this list earlier, I definitely would have been more diligent in saving and would be in a better position to realize some of my financial aspirations. My suggestion: make a list. For me personally, there are many reasons I could list, but to name only a few:
-for retirement
-to do things I enjoy like travel, purchase art, etc.
-for my kids, when I have them, education
-capital appreciation, just to make my money grow so I have more purchasing power
-to achieve financial freedom and be worry free

All of these are reasons, however, it's not the process as to how you get them that I want to touch on, it's the actual end goal I want to focus on, those items I listed. The actual need or desire that you want to be able to afford or buy is paramount. That is what you need to focus on.

What I am trying to get at is that you should create a list of things you want to do in life. Yes, a list. That's it. This may seem a little bit corny, but fail to pay attention to what you'd really like to do in life, and you may find yourself one day, full of regrets. It's like they say, 'if you don't write down your goals, you won't achieve them'. It's so true. Think of all the things that you would have changed if you could go back and start over again or live life just a little bit differently. If you don't constantly remind yourself of what you want then where are you going to draw inspiration from? Creating this list is a lot more fun than you may imagine. Just think about the relief you will have when you check off accomplishments that you reach.

So how does this relate to finance? It is very simple. One of my financial goals is to purchase a home. This is the largest financial decision that many people will make, for me especially since I live in Los Angeles and homes are ridiculously expensive here. However, this goal is reachable, but I have to be willing to work for it. If reaching this goal means saving that extra $50, $100, or $200 a month by not buying some DVDs or going shopping one less time, then I am willing to sacrifice that. And you have to be willing as well. This is why keeping the list handy and constantly looking at it is important.

So, get a piece of scrap paper and jot down a rough draft of things you want to do, places you want to go, and money you need to save. This will give you a great idea of what you need to do NOW to achieve them LATER. Once you have this list, you can then begin taking steps in the right direction and make that nest egg grow.

The moral: If you lose sight of your goals, you will forget about them and ultimately not achieve what you set out to.



"May the wind always be at your back and the sun always upon your face and the winds of destiny carry you aloft to dance with the stars."

I am going Long TTM, check it out, good spot to look at investing

TTM, is Tata Motors. They manufacture and market heavy, medium and light commercial vehicles, utility vehicles, and passenger cars. They have 2 business units: auto and other. The auto segment includes the business of automotive products consisting of all types of commercial and passenger vehicles. The other segment includes construction equipment, engineering solutions, automotive components, and some software operations. The Group also manufactures spare parts for vehicles, marine engines, casting, and forging. The fact that their businesses are diversified is a great sign and they can draw profits from several places. All of their plants are located in India. Most of their business comes from that country as well, however, they just acquired Land Rover and Jaguar. This will make their business and line-up of cars very strong for the future, especially when the economy turns around.

On top of that, the stock is at $13.34/share. That is the lowest it has been since December '05. The main reason for the decline in the last couple months is due to the recent acquisition of Land Rover and Jaguar. Tata had to shell out some serious cash for the two car companies and that puts their balance sheet in a less attractive position. (Whenever a company makes a large acquisition, it will trade lower in the short term b/c it dilutes their earnings and they have to raise capital. In this tight credit market it is even harder to raise money so that hurts Tata as well.) TTM pays out a dividend of roughly 2.8%, which is always a benefit to investors. The 52-week high is just above $21/share and so that gives us a good upside for some profit.

Here is the chart:

Timing the market. (Don't try this at home!)

First off, let me throw in a disclaimer (CAUTION!!) and say that neither trying to time the market nor day trading are good strategies. This is just my opinion, but if you read enough publications, as evidenced by the link I pasted below, you will see how many so-called experts are routinely wrong.

Market and timing may not mean much alone, but when you put them together they become the most dangerous phrase in investing, especially when done by inexperienced 'traders'. Market timing is the strategy of trying to predict future price movements of an investment or the market and either buying or selling based on these 'educated' guesses. The real benefit of knowing what is going to happen is that your return from buying a stock before it takes off is obviously going to be better than if you buy the stock when it is already on its way up.

The ultimate “buy low and sell high” market timers are called day traders. These day traders, who move in and out of positions in minutes or hours, are the extreme market timers. They look for several small profits each day by capitalizing on swings in a stock’s price. Most market timers operate on a longer time line, but may move in and out of a stock quickly if they perceive an opportunity.

There is controversy about market timing. Many investors believe that over time you can’t successfully predict market movements. Market timing becomes more of a gamble, in their opinion, than a legitimate investing strategy. Other investors argue that it is possible to spot situations where the market has over or under valued a stock. They use a variety of tools to help them predict when a stock is ready to break out of a trading range. (I won't get too specific but many use a technical or fundamental analysis which you can look up and learn more about if you so choose.)

Unfortunately, stock prices do not always move for the most logical or predictable reasons. An unexpected event can send a stock’s price up or down and you can’t predict those movements with charts. This is why it is illegal to have inside info; if you knew about some good or bad news before the general public, you would be able to get in or out of a stock holding and benefit immensely.

The internet stock bull market of the late 1990s is an example of what happens when investors, in the excitement of the moment, become market timers. Everyone had a hot tip about the next “big thing” and investors were jumping on stocks as they shot up. Unfortunately, most of these rockets came crashing down just as quickly as they went up and many investors held on way too long.

The disastrous result was an exact reversal of what they hoped. In the end, it was a case of “buying high and selling low.” You don’t need to know much about investing to know that’s not a successful strategy.

For most investors, the safer path is sticking to investing in solid, well-researched companies that fit their requirements for growth, earnings, income, and so on and so forth.

In summary, if you look for undervalued stocks (like AMX and AIG, which I mentioned below, and many of the large banks, yes I said banks), you may find one that is poised for moving up sharply given the right circumstances. This is as close to market timing as most investors should get and takes a lot of time and effort to pick the right stocks to invest in.

Here is a good article on this topic if you want to read further:
http://www.fool.com/investing/value/2008/05/30/is-this-the-bottom-who-cares.aspx?source=ihptclipb0000001

Gold plays

Inflation will be a huge problem in the coming year(s). A common hedge against inflation and the US dollar, which has precipitously fallen, is gold. I wanted to point out some gold plays that may interest you.

If you want direct investment in the gold index then I would recommend GLD. This is the 'streetTRACKS Gold Shares ETF'. It mirrors the GO@LD, which is the London gold index price. This is directly correlated to the gold price. Gold is trading at $900/ounce today and GLD is at just under $90/share.

To evidence the statement that GLD and GO@LD mirror each other, I have pasted in the graphs below. The top is GO@LD, again, the actual price per ounce of gold and the bottom is GLD, the etf that mirrors the gold price.

GO@LD


GLD




Looks the same right? Well, that's b/c it is! Just goes to show there is no reason to buy the actual gold. Just buy GLD.

Another play would be to own stock in gold explorer, miner, producer and manufacturer companies. Some of these are ABX, AUY, NEM, GG, GOLD, and HMY. There are several others but these are the most well known. They differ somewhat as to where they mine or own mines at and to what extent they are vertically integrated (which means whether they just mine the gold or if they look for it, mine it, and then produce bars/coins, and sell it). Check some of them out and see if owning one or a couple would interest you.

The main idea is to diversify your portfolio. The best way to do so is to own some gold in the portfolio b/c it is a hedge against the dollar and inflation. This helps b/c usually the dollar depreciates during times when the market has soured, precisely as it has done in the past 6 months or so. During the same time gold has appreciated and the GLD and gold stocks have followed.

For the record, I own AUY. I think it's a great growth play. I also believe gold as a commodity will continue to rise in price for a year or two, or at least until the inflation anxiety passes.

The Guru