Wednesday, January 31, 2007

Be comfortable with your activities and investments

I was at an airshow this summer and had the pleasure of watching the Army’s Golden Knights skydiving demo team. They teased and toyed with gravity and did things in the sky that made me shake my head in amazement. As I watched them step out of their plane that was WAY up there I couldn’t help but to think that a plane would have to be on fire, heavy fire, for me ever to want to jump out of it. Shortly after the Golden Knights finished an airshow pilot pealed his sleek aerobatic plane off the runway rolled it once and put it on an upline that had me craning my neck back in seconds. I stood and watched this guy roll, loop, and literally summersault this plane across the sky. As he landed all I could think was, “How do I get a ride in one of those?” Being upside down in a plane I am comfortable with, jump out of that plane I’m not.

Uncomfortable is pretty much my emotion when I read about people using money from zero interest credit card balance transfers to invest with. In short you pull money out with the balance transfers and usually push that money into an online savings account yielding 5% plus. Somewhere down that road you pay the money back and keep the interest. Is the plane on fire? Now don’t get me wrong. There are people that do this and make money consistently. Just ask 2Million. Over on his blog he has a great how-to about making money with balance transfers. More power to you if balance transfers work for you. For me it is too much like jumping out of the plane… blindfolded.

On the flip side of that I have no problem buying stocks on margin. With the margin buying I am still borrowing good size sums only now the interest is far from zero and the stocks a long way from FDIC insured. Can you make the plane go upside down again, please. Some would go as far as to say that buying on margin comes with greater risk than the balance transfers path. I would not disagree with that being said. For me margin buying is like snap rolling an Edge 540… exciting and fun. (Could one of these ideas be better than the other for you? Sure. Could they both be bad ideas for you? Yes! Could you be comfortable using both? Some people are.)

Many “professionals” say we should invest in things and companies that we know something about. Well hell I know a little bit about a lot of things, not all of them I would be comfortable sinking my money into. (I’ll take margin buying over balance transfers, stocks over rental property, aerobatics over skydiving, a mountain view over a city skyline…)

My point is this: Seek investments and activities that you are comfortable with. Don’t get me wrong I am not advocating NEVER doing things that take you out of your comfort zone, after all that is how we continue to grow. Just keep in mind as you read, listen, or watch different investment ideas being showcased that not everyone of those “great ideas” is great for you. There are no hard and fast rules as to how or what you ultimately should invest in. Don’t give it a second thought if your comfort level doesn’t match up with Dave Ramsey, David Bach, Robert Kiyosaki, Jean Chatzky, or even me. As long as you are making an effort in managing your money, preparing for your future, seeking enjoyable company and activities then that’s enough.
We all make far better decisions when we are comfortable with our current situation and investments as opposed to being mind numbingly stressed out. Repeatedly making better decisions not only increases the return on our investments but also the return on our life.

That’s it for today. Here’s to people, activities, and investments that make us smile. And to keeping an eye on our EveryDay Money.

Tuesday, January 30, 2007

Festival of Frugality #59 is up and running

Over at Money, Matter, and More Musings the Festival of Frugality #59 is up. Golbguru did a really nice job with the layout of this Festival. Articles are broken down into categories that make it all too easy to find what you are looking for or merely to browse. EveryDay Money was happy to contribute Baby Gear to this week’s Festival. So if you are looking for some good reading about ways to save some dough then head on over to this week’s Festival

Monday, January 29, 2007

Sandisk sold in After Hours

Good or bad is yet to be decided but today I finally gave up on SNDK. They report numbers tomorrow and today they dropped yet again. It was hard to give up on it and change the paper loss into the real thing. The loss was big enough to get my attention and make me feel like an idiot for picking this stock, but not so big as to take me out of the game. It could have been worse. But then again it could have gone far better than it did. A smack in the nose every now and then keeps me humble and reminds me to focus and pay attention.

What did I learn? I need to do a better job at not rushing in. I started with the idea of writing some nice covered calls. I did a quick once over and the numbers didn’t look too bad. Sandisk had already taken a hit after the last quarter’s numbers came out and I figured that they were about done falling. Oops. After I was knee deep in stock I got a crash course on flash technology. Depending on who you listen to there seems to be two basic arguments. This is a company facing declining margins and tougher competition than ever before. The 40s are just a pause in a share price on its way to the low 30s. Others argue that its cutting edge leadership, size, and efficiencies will allow it to overcome any NAND gluts, margin contractions, and on and on back to a stock price more in the neighborhood of 70s or 80s. Now here’s the problem. I am just not smart enough about this business or the flash industry to even be able to argue either side. And that my friends is a problem when you don’t even know where to stand. So I had to hang it up. There is just too much uncertainty going into tomorrow’s earnings call.

The numbers: Bought the shares on October 30th 2006 for $48.20 per share. Sold covered calls the same day (Nov. 50s) for $1.20. Since the stock wasn’t called away I sold Dec. 50s for $1.35 on November 20th 2006. Today sold all SNDK shares for $42.24. Final tally not counting commissions and margin interest about a 7.5% loss.

That’s it for today. Here’s to just moving on and to trying to keep an eye on your EveryDay Money.

Saturday, January 27, 2007

A little extra Part 3

Ok, I’ll admit I couldn’t do it. I know I said, back in Part 2, I was ready to strictly focus on fully funding the ROTHs this year before anything else… but. Today when I was writing out the bills I just “had” to send some extra to the mortgage. Last year I got into the habit and it just is hard to stop…inertia. Now don’t get me wrong I cut a nice size (at least for me) check to the ROTH. So all is not lost.

There are some legitimate reasons (at least I think of them as legitimate) behind my sticking with the extra payments. Let’s see, the last ten years of a thirty year mortgage the payments are mostly made up of principal. Since the payment is mostly principal then there will be less interest to deduct on the taxes. As the “experts” have said the tax deduction is a major reason that a mortgage is “good” debt. With so much less interest the last 10 years I guess it makes the last ten “less good” debt? Another reason I keep telling myself is that my wife and I already put about 15% or so of our pay away for retirement. If somewhere down the road we couldn’t put that percentage away then I would have to rethink the house extra. (No, really I would.) Also, if we didn’t have to pay a mortgage then we would need a fair amount less in income every month to maintain our lifestyle. Needing less income would give us both options in regards to job type and hours at work. With a baby coming in March those options might be worth lots down the road. In short I still equate a paid off house with freedom. Well maybe not freedom but at least choices.

I ran the numbers as best I could on a 30 year mortgage. If the amount that goes to principal is equal to the amount of interest each month then you can kill off a mortgage in about 15 years. So today I went back to my old, evil, money mismanagement ways and sent a check that matched principal reduction to interest accrued and took another full step closer to having more choices.

Are you sending extra to your mortgage even though you know investing that money “may” make better sense? Or do you still think that I have it wrong? Post a comment or drop me an e-mail. All feedback is appreciated.

That’s it for today. Here’s to finding a path that makes sense to you. And to keeping an eye on your EveryDay Money.

part 1

part 2

Thursday, January 25, 2007

Garmin, Crocs, and Sandisk take a beating

A beating is perhaps a shade strong. Today was not like an Enron “what the hell just happened” beating but today was enough that I almost titled this post: “The @*#$?! Sky is Falling”. By the end of the day Garmin, Crocs, and Sandisk were all showing red in my account. Crocs was the blue ribbon loser for me today, down 2.82%. Sandisk was a close second falling 2.05% and Garmin tried its best to suck today, down 1.49%. The small sliver of a silver lining was that Garmin stayed above where I bought them the other day. (That small positive note is courtesy of my wife, she always seems to see the bright side of things. With us going on three years of marriage I guess that sunny disposition has rubbed off on me some, probably when I wasn’t looking. )

After the beating today it will be interesting to see how they fair tomorrow. SNDK has earnings next week and CROX should be announcing shortly. What happens in the next few weeks will dictate what I end up doing with those two. Garmin doesn’t show its hand till February 14th. I still don’t know about them, a few of those GRMN shares may end up being carried as a long(er) term holding. It seems that GPS navigation is almost to the point of “have to have”. You know kind of like cable TV. (wink, wink)

Remember having to get UP and change the TV channel, getting letters in the mail from far away friends, and having to finally stop to ask directions when we were “almost” lost. My how cool companies have changed our world.

That’s it for today. Here’s to the market not punching too hard tomorrow and to keeping an eye on your EveryDay Money.

Monday, January 22, 2007

Will Garmin’s GPSs locate a pile of cash?

I just can’t seem to leave the margin alone. It wasn’t but a couple of days ago that some of my CROX got called away and put my margin balance almost to zero. Now tonight I’m right back at it. Garmin (GRMN) bounced around this morning and I “had” to pick up some shares at $49.

Some of my thinking: Earnings are due out February 14th. S&P has a 5 star Strong Buy on the shares and a 12 mo. price target of $61. Back in December GRMN was at $55. The shares are now in the $50 range, that’s about a 10% correction. The February 50 calls are being priced at a nice premium. Garmin has cool toys! All of these ideas and a few others were racing around my head this morning at the same time my available margin was blowing trumpets like Churchill Downs calling me back to the action. I pulled the trigger at $49 and promptly watched it fall below $49. Ain’t that what happens to everyone?

The decision I need to make…soon is whether to sell February covered calls? I could probably get around $2.00 for the February 50s. Take the $2.00 add the $1.00 for the strike price difference, divide that by $49.00 and I end up with around 6% for a month holding time. Not bad and kind of conservative. Or I can wait it out till earnings are reported. If the numbers are good then we race back to $50 (maybe) or above $50 (double maybe with a cherry on top) and I make 10% plus in a month.

Tonight I just don’t know which way I want to hop. If you have a take on Garmin or an opinion on which way I should go then drop me an e-mail or post a comment. Thanks.

That’s it for today. Here’s to being ready to pull the trigger and to keeping an eye on your EveryDay Money.

84th Carnival of Personal Finance is up

The new Personal Finance Carnival is up at Blueprint for Financial Prosperity. I have never hosted a Carnival so I can only imagine the amount of time Jim spent going over submissions and pulling everything together. There were dozens of articles submitted so there is something for you no matter what you are looking for. I submitted An Emergency Fund is like the Ark. I am happy to report that it made the Editor’s Choice list. So head on over and take a good look around. Don’t forget to drop Jim a comment letting him know his hard work is appreciated.

Friday, January 19, 2007

Crocs Covered Calls Called Certainly

About a month ago I sold January $45 covered calls for $1.40 on half of my Crocs position. Today Crocs closed at $47.95, two days ago it was pushing $52. And there in lies the rub of covered calls. The upside potential is limited by the strike price you pick and the premium you accept. As you can see I clearly left some dollars on the table with this trade… and that happens. It still goes down in the books as a positive outcome. Since only half of my position is being called away it is a little easier to shrug my shoulders at the dollars left on the table. If I had had January $45s on the whole lot of them then tonight I would be more… reflective on my trading decisions. For the shares that I still own the plan is to hold. I still look for good expansion out of Crocs and more money to be made on CROX.

In the end: CROX shares were bought on November 20th and 21st, for an average price of $44.26. December $45 covered calls were sold on November 21st for $1.60. Since they were not called January $45 covered calls were sold on December 21st for $1.40 and were called January 19th.

The math: $45.00 - $44.26 = .74 per share
.74 + $1.60 (Dec) + $1.40 (Jan) = $3.74
$3.74 / $44.26 = 8.45% for right at two months of holding time. (Does not take into account commissions and margin interest paid.)

You can see how it all started (here).

That’s it for today. Here’s to trades with positive outcomes and to keeping an eye on your EveryDay Money.

Wednesday, January 17, 2007

An Emergency Fund is like the Ark

When did Noah build the Ark? Before the rain, before the rain. That was where I was starting from when I sat down with a friend and his wife recently to talk about money. As I laid out the idea of having 3-6 months of living expenses set aside they both stared back at me and for a moment I felt my age. Their look said it all, “Hang on old man, we are young, have good jobs, and are both healthy. Three months seems a bit much.” My mind flashed back to when I was their age and remembered at that time in my life what I considered an emergency was missing Happy Hour. Funny how age changes your perceptions. They had asked my opinion on where they should start with their money and a good rainy day fund is usually tops on my list.

Before the rain, before the rain. I gave them the Noah analogy and some more “what ifs”.
After some thought they settled on trying to establish a two month emergency fund. I encouraged them to pile up some dough as quickly as possible, push it into an online savings account and let the current 5% interest rate help them along. Then they could add a little every month to keep it growing towards the six months of expenses target. They agreed. If you are going to go then go full speed.

Noah didn’t just start the Ark he actually got it FINSHED before the rain. Their plan of attack is simple in its approach. Cut the cable movie channels, cut back on eating out, and start taking lunch to work more. They are also putting some shopping on hold (new houses need new things, but not all at the same time.) and he is picking up extra duties at work. (I think picking up extra hours or duties at work is a great idea. If that is not possible a second job for a few months is another possibility to help build quicker. A good garage sale, in warm weather, can pull in some cash also. ) The whole point I tried to make to them was get some cash on hand before something happens and you have to reach for the plastic.

If you stand outside in the country you can actually smell the rain coming. Now some of you may be thinking the same thing as my friends started out thinking, “I have plenty of room on my credit cards for almost any emergency.” “You don’t understand the bank has already set us up with a home equity line of credit in case something happens.” My response was and is this. Let’s say an emergency comes up so you throw it on the credit card and move on. You now have a NEW payment next month. Doubtful you can pay it in full next month because there’s not enough slack in the budget. If there were you would have used that slack instead of the credit cards. Now you are paying interest on an emergency. (The phrase kick him while he’s down ring any bells?) In a couple of months something else happens, car tires, refrigerator goes out, deductible for x-rays from rolling an ankle during a pickup game of basketball (no wait that last one was me). The point is now you have ANOTHER NEW PAYMENT. As you can imagine it doesn’t take but a few small emergencies before the budget is worthless and you are waist deep in water. Nervous1 summed it best on a thread over on the MSN Money boards, “Your $0 dollar emergency fund will be more than sufficient to cover any $0 dollar emergency you have.” Putting emergencies on credit (cards or home loan) would be like Noah building and someone coming right behind him pulling out every other nail. Get the rainy day fund finished and the emergencies will be more like rough seas then someone trying to drown you. Good luck with your building.

I see my friend all the time so I know how they are doing, drop me an

e-mail or post a comment and let me know how YOUR rainy day fund is coming along.

That’s it for today. Here’s to being prepared and to keeping an eye on your EveryDay Money.

Tuesday, January 16, 2007

Is BEST BUY a Buy?

I bought some Best Buy stock back in August. Sold some September 50s calls and wouldn’t you know it, they got called away. (I made just a little over 5% not counting margin interest and commissions. Not bad for a month.) Since then I’ve kept an eye on it as it climbed to the upper-50s and thought oops. With it once again being back in the $49 range I am wondering if it is not time to take another poke at it. I have some margin that will be freeing up this weekend (January $45 calls of CROX being called away, I’m pretty sure.) Monday would be the first chance for me to buy some BBY. I kind of like that, forced time to think about it.

Best Buy reports earnings April 4th, they had a little trouble last time around. They have fallen from around $58 in October to below $49 today. S&P has a four star buy on them and a $63 one year target price. Since this buy would be on margin I am looking for a quick turn of 5% or so. Ideally I could turn it in less than a month, kind of like last time. The question I am still mulling over is whether to do covered calls again. Right now I am leaning toward playing this one straight up with no calls. There is probably more to be made here if I decided to hold longer but when it is on margin my thinking is, “just give me the money and I’ll get out of your way.” I’ll let you know next week. (This is me merely thinking out loud. Please do your own homework. Buy and sell what you think is best for your portfolio.)

Have an opinion on Best Buy or another stock I should be tracking? Drop me an e-mail or post a comment.

That’s it for today. Here’s to making a few dollars and to keeping an eye on your EveryDay Money.

Monday, January 15, 2007

The Carnival of Investing is up

Two Carnivals on a Monday, now that’s the way to start a week. The Carnival of Investing is up at The Sun Financial Diary. There are several good articles. The layout of the Carnival is straight forward and will have you checking out informative post in no time. I was happy to submit an article about DRIPs. Drop by and take a look.

83rd Carnival of Personal Finance is up

The 83rd Carnival of Personal Finance is up and running at Young and Broke. Amanda did a good job putting so many submissions together. She has them broken down into categories for easy searching. EveryDay Money chipped in with Online savings accounts, welcome to being old(er). There were over 70 articles submitted so drop by and take a look around.

Saturday, January 13, 2007

Is your car costing you a future?

Rolling your way into the car of your dreams:

The idea is simple in its premise if not a little challenging in its implementation. You save a few thousand dollars and pay cash for a car that simply gets you from here to there. Now this car may not turn the head of anyone in your neighborhood but does reliably get you from point A to point B. At the same time you start setting aside what would have been a car payment of $250 (or there abouts) each month in a online line savings account which earns you around 5% interest. At the end of three years you will have almost ten thousand dollars in that account. Take the ten grand and the car you’re driving roll them together. With the $10,000 and the trade in you should be able to trade up for “a little nicer” car. (Caution: Don’t let your ego overreach and roll the $10,000 + the trade in + a LOAN for this “little nicer” car.) Repeat the $250 a month set aside process. In another 3 years roll the new 10 grand with the “little nicer” car and upgrade again if you must. In short if you can save $250 a month then six years and two rolls later you can be driving a paid for automobile that turns the neighbor’s heads. OR

Roll your future not the car:

After you have rolled into a “little nicer” car then perhaps you realize that this type of ride isn’t so bad after all. The next three years you continue to save as planned but at the end you don’t roll into a different car. You decide, “screw the neighbors I’m going to be cash rich not car poor.” The $10,000 gets left in the online savings account earning interest and waiting until you NEED a different car. The $250 a month now gets pushed into a less than fully funded ROTH or a less than maxed out 401(k) or a nice dividend reinvestment program.

A look at what could be:

$250 a month invested that returns 9% gets you about $10,700 in three years. For five years of focus it grows to around $19,500. For those that are disciplined, in ten years you have just shy of $50,000. For those of you starting young, twenty years rolls to just under $170,000.


As I said the idea is simple: drive a paid for car and invest what would have been a car payment. It is the implementation of that idea that is the challenge. But, for the ones who rise to that challenge, master their car emotions there is indeed a rich reward for the disciplined and focused.

That’s it for today. Here’s to paid off cars, fully funded ROTHs, and to keeping an eye on your EveryDay Money.

Thursday, January 11, 2007

January Poll Results

Q: Your expected return for 2007?

As the New Year is getting into full swing I thought it would be good to find out what everyone thought the market would bring them this year. Now that the poll is closed I’ll share my thoughts. I have heard the market’s historical return of 10% idea so many times growing up that I think I am brainwashed. So my realistic answer, (the one I use with friends, coworkers, and such,) would be 10-20%. Now privately at home when it is just the wife and I, when I am running scenarios and the calculator on MoneyChimp ask for an interest rate… well then I invariably use something between 30-40%. Might as well shoot big, especially if no one is looking. Well enough about me, here is how you voted.

Above zero, I’ll be happy: four percent

Less than 10%: six percent

10-20%: forty three percent

20-30%: twenty three percent

30-40%: thirteen percent

40-50%: four percent

Above 50%, I’m that good: four percent

Thanks to everyone that voted. The February poll will be up in a couple of weeks.

That’s it for today. Here’s hoping the votes go your way. And don’t forget to keep an eye on your EveryDay Money.

Wednesday, January 10, 2007

Finding the next covered calls

Man, Crocs management presented at the IRC Conference this morning at 8:10 am West Coast time. (Where’s the coffee?) For math people that’s about 11:10 am East Coast time and if you look at today’s chart that is about the time CROX took off running. In short management had nice things to say about margins and also announced licensing extensions with the NFL and the NHL. CROX finished the day with almost twice the 3 month average volume and a price of $47.68 (4.04% up).

With CROX up on good volume there is a really good chance that my January 45s covered calls will be called away at next week’s end. If that does happen then two things will come about: 1) Half of my CROX position goes away. 2) Pretty much all of my margin loan goes away. Not sure how excited I am about #1 but #2 let’s me go hunting for another stock. Since I will be on margin I don’t want anything too crazy. Ideally I will be able to find a stock that I can write some February calls against (take in a little money to off set the interest). 2.5% - 3.5% call premium is what I normally shoot for (again nothing too crazy) on a stock that I won’t mind sitting on if it doesn’t get called away come February. If things go well the stock moves up some, it gets called away in February and I make about 7-9% for the effort. All the while my CROX and SNDK continue to climb. (Well that’s the plan anyway.)

For the last few days Garmin (GRMN) has caught my eye. It has taken a few downgrades (Merrill Lynch and DA Davidson). The stock once over $56 a few days ago has backtracked to $52.30 today. The February 55s don’t look to bad. And if they get called away it is right in that 7-9% range for the month. I don’t know yet. First I have to get to next Friday’s option expiration and see what happens to my CROX.

If you have an idea on a good covered call play for next month drop me a comment or an e-mail. Thanks.

That’s it for today. Here’s to always finding somewhere to go next and to keeping an eye on your EveryDay Money.

Tuesday, January 09, 2007

Festival of Frugality #56

The new Festival of Frugality is up at Savvy Steward. That’s number 56 for those of you keeping score at home. Savvy Steward did a nice job putting this Festival together based around a biblical commandments theme. I was happy to submit Coupon Time and to be a part of this Festival. Drop by and take a look around there are several links to good post that will help you make the most of your money.

That’s it for today. Enjoy the Festival and keep an eye on your EveryDay Money.

Monday, January 08, 2007

Blog Carnival of Personal Finance 82nd edition

J.D. over at Get Rich Slowly has raised the bar with this latest Personal Finance Carnival. If you have never been to a blog carnival you owe it to yourself to go see this one. In short a carnival is where a host takes all these great links from all over and organize them so with one stop you can find dozens of quality post. This carnival is all about Personal Finance with J.D.’s own superhero twist. J.D. was nice enough to include a post I had written on getting discounts on car insurance. So drop in, say hi, and take in all the great link there at your finger tips.

That's it for today. May you always find interesting things to read and are able to keep an eye on your EveryDay Money.

Sandisk and Crocs come out swinging

Today is the first day of CES and someone must have liked what they saw and heard from Sandisk. The stock went as high as $45.15 today and finished up nicely at $44.30. Sandisk introduced several new products that should help the bottom line this year. If you didn’t see any of the press announcements on the new products you can get caught up by visiting SNDK’s pressroom. After watching today’s action and hearing all about the new stuff I am glad I found a little more patience when I was ready to throw in the towel. I am not getting too excited right now and still have fingers crossed with earnings right around the corner.

Crocs had a good showing today also. They finished up 2.56% at $44.80. Someone must think they are going to say some really good thinks at the big investor conference that is starting on Wednesday. You have so many people talking fad and one trick pony with this stock. If their new line up of shoes starts doing well then I feel this stock could make me some real money. I am looking forward to what is said on Wednesday, although with earnings right around the corner I don’t feel they will be giving away any secrets.

All in all it does my mood good when both of these stocks start the week off strong.

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Sunday, January 07, 2007

Online savings accounts, welcome to being old(er)

Perhaps it is a sign of fleeting youth once you start reflecting on how much things have changed during your life. I remember needles skipping on albums, eight tracks not fast-forwarding right, and cassette tapes getting chewed up and stuck in car radios. Now I can download dozens of songs to my MP3 player and never ever really touch the music.

I remember a very nice blonde lady behind the counter that always had a root beer sucker for me when I went inside the bank with my Mom. I remember there being lines to use the new ATMs. (Some of you will remember those really long lines in the bank on pay day.) Now with online banking, debit cards, and payroll direct deposits the number of trips to the bank become less and less.

All these changes got me thinking when we started building our rainy day fund. (Everyone should have an emergency fund. The “pros” suggest 3-6 months of livings expenses.) What I didn’t want was our hard earned money being mothballed in some savings account grinding out 1% a year. Now it can be debated on where is the proper place for an emergency fund to be sitting and that is for each to decide. For me I want that money guaranteed safe and near at hand. So as our rainy dollars started to pile up I went in search for something better than the near zero percent offered by my local brick and mortar bank.

An online savings account was just what I was looking for. The ones listed below are all FDIC insured and pay north of 4%. There are others, but personally I would start researching these first. (Interest rates current as of 1-07-07)

Emigrant Direct (5.05%) HSBC Direct (5.05%) Citi Bank Direct (5.00%) ING Direct (4.50%)

I will admit I was worried about it not working or more to the point me not working it correctly. When I first started using our online savings account I felt much like I did when ATMs were just getting started. If I screwed it up then there isn’t anyone near by to fix it. (Oh how I miss the nice blonde behind the counter.) Well it has been over a year since we first opened ours and I am happy to report my fears were misplaced. The transfers into and out of the account have gone smoothly and the interest rate continues to be about five times as much as a “normal” savings account.

If you haven’t embraced MP3 players and online savings accounts then this may be a good year to start. The only question I have is, “where’s my damn root beer sucker?”

That’s it for today. Enjoy the benefits of getting old(er) and keep an eye on your EveryDay Money.

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Friday, January 05, 2007

Piloting my ROTH (investing)

For some time now I have thought of ROTHs and mutual funds in tandem. Mutual funds seem to have all the diversity the “professional management” that I equate with a nice safe retirement. So as my wife and I have pitched nickels and dimes into a ROTH the money has always landed in a mutual fund. That is until a short while ago.

Toward the beginning of November (2006) I pushed a hand full of nickels into a ROTH opened with my favorite online brokerage. Now with this money I have none of the diversity or “professional management” but all the fun and excitement that comes from flying the plane instead of merely being a passenger. My thinking was this; surely I could beat the averages since I was only running such a small amount of cash. The money so concentrated that any winner picked would have a dramatic impact on my returns. On the other hand if I stepped on an Enron… well let’s not focus too hard on that hand.

So this year, with spousal support, I will take a turn at piloting my own ROTH. I know full well the long term hazards if this should go against me. This idea of picking individual stocks to place in a ROTH is probably not for everyone. (By the end of 2007 it might not be for me) I’ll let you know.

Do you pick individual stocks for your ROTH or fly with the “pros”?

That’s it for today. Here’s to great returns and fully funded ROTHs. And to keeping a sharp eye on your EveryDay Money.

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Wednesday, January 03, 2007

Push (trading)

Let me wade right in here. At one point Crocs sprinted up almost 5%. Watching it, I was thinking $50 by Friday and $60 by month’s end. That may be overly optimistic but hey I can attach any number I want when I am daydreaming.

Well it didn’t take much to snap me back to reality. Sandisk is the antidaydreaming stock if there ever was one. At one point Sandisk was down almost 5%. What’s with the 5% stuff today? So my idea of a rise going into CES burst into flames and came crashing down around my head today. To my knowledge there hasn’t been a big press release about anything, so I have no idea what was the driving force today. My lack of understanding doesn't stop the speculation from flying on the boards. Sometimes a little comic relief in the middle of a melt down is healthy. For the record, I am voting against the drop today being the result of “the pros coming after the little guy conspiracy”. But let it drop like this again tomorrow and I might reconsider. What I do know is that it was Ugly today. And I am back to internally questioning my hold decision.

At the close CROX was sitting pretty with a 1.85% increase and Sandisk sat with a 3.04% loss hanging around its neck. Both stocks made their move with above average volume. After having my emotions run in two different directions, like my stocks, it was anticlimactic to have my account finish almost even for the day. Like a stupid push in blackjack today left me a touch unsatisfied.

How do you feel when you end flat neither showing a gain nor a loss for the day’s effort?

That’s it for today. Here’s to not ending flat too often and to keeping an eye on your EveryDay Money.

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Monday, January 01, 2007

Happy New Year

I hope you all have your resolutions in place and none of them have been broken on the first day. Good luck with them and I hope they last. Both Crocs and Sandisk finished the year on an up note, so my New Years may get started on a good note. Sandisk has CES starting on the 8th and both companies report numbers toward the end of the month. After having waited this long I will hold SNDK till earnings with my fingers crossed. With expanded distribution this winter I am looking for CROX to report big numbers. They need to or their P/E and stock price is liable to fall off the table. Guess we will see Wednesday when everyone comes back.

I didn’t do any resolutions this year. If I was pressed to come up with one it would be simply; make good decisions based on solid research. That sounds nice and easy enough, at least tonight with the market closed this whole day. When the market opens and the New Year kicks off it will be harder. When I am watching my money bounce up and down it becomes harder not to get emotional. At least I can say I am getting better. I make fewer trades based on emotions than I did when I was younger. The downside is that I had to get old(er) in order to get that experience. I wish you good luck with your money for this whole year and many after.

Did you make any resolutions?

That’s it for today. Here’s to making smart decisions this year and to keeping an eye on your EveryDay Money.