This is the fourth in a series inspired by a toy at CNNMoney. Previous installments covered housing payments, emergency funds, and asset allocation.
Today’s topic really ought to be a lay-up. The tool asks "How much of your portfolio is invested in your employer’s stock?" Obviously a trick question. The correct answer is so clearly zero, barring special circumstances or incentives.
Alas, no.
In a bear market, it’s tough to find a safe haven – a lot of the stocks in your portfolio will be sinking too. But don’t compound the risk by holding too much in any one stock. Best to keep it below 10%.
This bit of psuedo-wisdom assumes and implies so much that is wrong that I hardly know where to begin.
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I know you’re thinking that Halloween has already passed and that I should have a different name for the October frugal round-up. But I wanted to remind everybody that now is the best time to purchase next year’s costume and 
candy. Of course, if you have kids you can just set aside what they gathered this year trick-or-treating to give out next year.
It was a good month in the frugalosphere. Pragmatic Environmentalism pointed out that an IUD is the most cost effective of the non-abstinence methods of contraception. And Not Made of Money shared a tip for saving money on tailgate parties: hold them in your backyard to save on game tickets and parking.
Provident Planning had an important post Do It Yourself: Why Your Time Is Not Worth As Much As You Think. The author doesn’t quite say it, but the idea is that if you have time to read blogs you’ve got time to knit your own Swiiffer pads. It’s really just economics. If there is uncompensated leisure time in your day, then the marginal value of your time must be zero. You can’t argue with math.
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There is a movement amongst earnest policy wonks that might be called Nanny State Light. It’s a compromise position between full-on centrally planned we-know-what’s-best-for-you 
control and you’re-on-your-own-kid libertarianism.
The idea is that instead of making people do the right thing or hoping that they do what’s best on their own, you give them a little nudge and hint in the right direction. This is, I am told, the topic of a clever and popular book, Nudge, which I haven’t yet gotten around to reading. (But I bought a copy a few weeks ago. That’s something, isn’t it?)
The latest scheme along these lines to hit the media is in today’s Wall Street Journal. Apparently, all we need to do to get people to save more money is to send them a text message reminding them to save more money.
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This is the third in an occasional series inspired by a toy at CNNMoney. Previous installments covered how big your housing payment should be and emergency funds.
Today’s topic is asset allocation, which in the dumbed-down context of the CNNMoney "tool" means the 
percentage of your savings to put in stocks. If you type in that your age is 45 and that you’ve got half your kitty in the stock market, you get a big red flag and a warning. But maybe not the warning you were expecting.
Uh-oh… Looks like your portfolio is invested too conservatively. Stocks can provide good growth, but pose plenty of risks in the short-term. Bonds offer more stability. If you’re saving for retirement and want a quick idea of what percentage of your portfolio should be in stocks, subtract your age from 120.
So at 45 the right answer is 75% in the stock market. In fact, from experimenting with it a little I find that for a 45 year-old anything between 65% and 84.9999% gets the "Good Work" pat on the back.
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This is the fourth in a series inspired by a toy at CNNMoney. Previous installments covered housing payments, emergency funds, and asset allocation.
Investing, Media | Frank Curmudgeon | 
November 9, 2009 12:59 pm | 
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