Stocks are Still a Good Idea

I risk stating the obvious when I say that economic times are still tough. The recession, as the term is strictly defined, ended last summer. But that just means that the economy stopped contracting. The environment is still plenty  challenging, even if it is a tiny bit less challenging than it was a few months ago.

So it feels a little strange to be discussing the first birthday of the bull market. Most people are not comfortable even calling it a bull market, using paler terms such as rally or recovery. But in any other economic context it would be hailed as a great and wondrous upswing that we have all been lucky to live through.

The S&P 500 closed at 682.55 on March 5, 2009. That turned out to be its low for 2009, and indeed for the decade. It was a level last seen in September 1996. In other words, with dividends ignored, the market had on average returned nothing for thirteen years.

Read more »

March Madness Madness

There are two ways in which I am handicapped in my analysis of today’s numerical fiction candidate.

First, I don’t like basketball. I’m not sure why. I’ve been accused of being off  the deep end about baseball and I’ll catch the occasional football and hockey game, but basketball does nothing for me. I never liked playing it as a kid, even during that brief window when I was taller than my friends.

Second, I do not have a job.

So I lack much in the way of personal experience to help me understand what is apparently a GDP-threatening scourge, the annual NCAA Men’s Basketball Tournament. It seems that employed basketball fans, who make up a surprisingly large proportion of the population, will waste enough work time to cost their employers $1.8 billion in "unproductive wages" in the tournament’s first week alone. Add in the money lost gambling on the games and the hit to e-commerce from the slowdown in internet speeds caused by people watching the games, and you’ve got a serious menace to the economy.

Or so I am told.

Read more »

More Trouble for LifeLock

I keep meaning to write more about identity theft. It combines several of my favorite themes, including the triumph of compelling narratives over actual facts, cloddish government bureaucracy, and, of course, bad money advice. Also, when I write about it I tend to annoy certain people that I enjoy annoying.

Yesterday the FTC and 35 state attorneys general announced a settlement with one of the major players in the ID theft business, LifeLock, in which the company agreed to pay $12M and stop its hitherto deceptive advertising.

I am willing to admit that when I entitled a post The Death of LifeLock last June I jumped the gun a little. Still, the outlook for the company continues to deteriorate. Yes, for a company of its size, a back-of-the-envelope has annual revenue at $180M, forking over $12M is not the end of the world. But it’s a noticeable hit. And the restrictions on advertizing may just be the beginning of the end.

Read more »

The Bad Example of the Secret Millionaire

Heard about the secret millionaire of Lake Forest, Illinois? I’ll assume not and recap. Grace Groner was born in 1909 and graduated from Lake Forest College in 1931, just about the worst year of the 20th Century to enter the job market. Luckily for her, she landed a position as a secretary at the then obscure firm Abbott Laboratories. She was a secretary there her entire career, retiring at age 65 in 1974. She never married and lived modestly.

So far, it’s a story that could be called poignantly mundane. But add in a few more facts and it transforms into a personal finance parable that will be repeated, and probably distorted, for some time to come.

In 1935 Groner bought three shares of her employer’s stock. From that day on, she reinvested the dividends and never sold a share. She past passed away this January, having reached 100. Her estate, including what is now a $7 million position in Abbott, was left to her alma mater, Lake Forest College.

Read more »

Frugal Friday in the Snow

February brought great heaps of snow to parts of the country not used to it, but being shut in for days at a time must inspire frugal thinking, because it  was a good month for cutting-edge frugalist tips.

Laundry continues to be a fertile area for frugality. Keeping Kingdom First carried a guest post that thoughtfully reminded us to make sure our dirty laundry is really dirty. But the author may go too far when she advises that you ask yourself "If I was paying someone to wash my laundry, would I want to pay to have this item washed?" Obviously, if a frugalist were paying somebody else to wash their clothes they would do it themselves to save money.

SavingAdvice.com brought us instructions on how to make our own dryer sheets. Finally, a way to save money on these household miracles with a thousand thrifty uses.

Read more »