Don’t Let Fraudsters Ruin Your Holidays and More

Don’t Let Fraudsters Ruin Your Holidays and More

By: Joe Delaney We all know that fraudsters are out there. We take care not to give out our social security numbers too often and fold our checks so the information doesn’t show through envelopes. We are especially vigilant around the holidays, choosing strong passwords to protect ourselves from cyber theft. Consumer fraud is one thing; investment fraud is another matter with much farther-reaching consequences. What’s a Ponzi Scheme? Since 1920 when Charles Ponzi was caught paying investors with money from new investors instead of actual returns, Ponzi schemes have only grown in number and scope. There were 500 such schemes perpetrated between 2008 and 2013 alone, totaling a whopping $50 billion in investor losses. Bernie Madoff was the Ponzi king during that period, responsible for $20 billion in white collar thievery. It is tempting to believe that we would never be duped by the Bernie Madoffs of the world and that our biggest problem is keeping our online passwords strong. Stories like Ruth and Len Mitchell’s remind us that it’s easier than we think to trust the wrong people and lose more than we bargained for. Meet Ruth and Len Mitchell Retirees Ruth and Len Mitchell turned over more than $100,000 to their accountant, Barry Korcan, to invest for them through his investment company. He was their neighbor and a friend. They didn’t think they had any reason not to trust him. In fact, Korcan was running a Ponzi scheme. There was no investment company and no real estate bonds. He was using the Mitchells’ money to repay other “investors” with no intention of repaying them unless he...
13 Financial Moves to Make Before 2016 Ends

13 Financial Moves to Make Before 2016 Ends

By: Mary Beth Storjohann The year is quickly coming to a close and there’s New Year’s resolutions aplenty. However, with resolutions being so open-ended, it’s easy to pile too much on at once and while you may feel motivated at first, fast forward a few weeks or months and you may find that you’ve thrown caution, boundaries and rules to the wind and are in the exact same position you want to get out of. Rather than resolving to change in 2017, there’s still time to opt for buckling down and getting things done in 2016. In many instances, the end of the year closes a financial window or opens a new door. Are you ready to wrap up your loose ends and set yourself up to take advantage of any opportunities the New Year brings? Here are 13 financial moves you should consider making before the end of the year: 1. Top off your 401(k) or employer-sponsored retirement account. Whereas you have until April 17th, 2017 to stash away money for 2016 into a Traditional or Roth IRA, you only have until December 31st to get your employee contributions into your company’s retirement plan. Are you sitting on cash in your savings account that could be better used here? Bump up your 401(k) contributions through year-end and use the extra cash in your savings account to replace the missing money from your paycheck. 2. Open a retirement account and fund it. The majority of Americans aren’t saving enough for retirement. If you want to be the exception, you have to do more than just open an account. You need...
7 Ways to Avoid Holiday Financial Stress

7 Ways to Avoid Holiday Financial Stress

By: Maryalene LaPonsie Black Friday sales are springing up online and in your local stores. But you still have time to pull together a financial plan for the holidays that will keep your bank account in the black. Carve out some time in the next few days to do the following, and you should be in good financial shape for the festivities to begin. Check your credit score. It may seem like an unlikely place to begin your holiday preparations, but Manisha Thakor, director of wealth strategies for women at financial advisory firm Buckingham and The BAM Alliance, says it’s smart to check your financial pulse before wading into the stores where easy credit is readily available. “There’s a power that comes from knowing where you are,” Thakor says. “That awareness will give you the right level of motivation.” Shoppers who are motivated to maintain or improve their score may find they are less likely to charge purchases or open new credit lines while holiday shopping. Although there are several credit scores available, Thakor recommends people check their FICO score, since it is the one most widely used by lenders. Decide whether to cast a wide net. Next, it’s time to create a game plan for holiday spending. “Think about whether you want to go narrow and deep with gifts or wide and shallow,” Thakor says. Narrow and deep means limiting the shopping list to only a few people and spending the majority of your budgeted amount on them. Those who decide to go wide and shallow may give inexpensive presents to a large number of people. “What you...
How to Budget and Spend Wisely This Holiday Season

How to Budget and Spend Wisely This Holiday Season

By: Tim Maurer The holidays are coming up quickly, and it’s wise to create a spending plan for gifts and expenses now, before they arrive. Tim Maurer talks with the TODAY show’s Stephanie Ruhle about ways to budget well so you can reduce holiday stress by planning ahead. By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements or representations whatsoever by us regarding third-party Web sites. We are not responsible for the content, availability or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products or services available on or through them. The opinions expressed by featured authors are their own and may not accurately reflect those of the BAM ALLIANCE. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice. © 2016, The BAM ALLIANCE Click here to read the original...
“Free Lunch” Investing Takes Time to Cook

“Free Lunch” Investing Takes Time to Cook

By: Larry Swedroe As the director of research for The BAM Alliance, I’ve been getting lots of calls recently from investors questioning their international equity investments. This hasn’t been a surprise, as any time an asset class does poorly, a significant number of investors will question why they own that asset. One particular inquiry I received addressed the fact that international equities not only had underperformed since 2009, but they crashed in 2008—just when the benefits from diversification were needed most, they failed to materialize. The investor thus questioned the reason for including international equities in his portfolio. Among the errors discussed in my book, “Investment Mistakes Even Smart Investors Make and How to Avoid Them,” is one called recency. Recency is the tendency to overweight recent events/trends and ignore long-term evidence. This leads investors to buy after periods of strong performance (when valuations are higher and expected returns are now lower) and sell after periods of poor performance (when prices are lower and expected returns are now higher). This results in the opposite of what a disciplined investor should be doing: rebalancing to maintain their portfolio’s asset allocation. The problem created by recency is compounded when international stocks underperform, greatly increasing the risk that an investor will commit a mistake. This occurs because of another common error: confusing familiarity with safety, which leads to a home-country bias. To address the question of where to find the benefits of international investing, we don’t have to go back too far in time. The problem is that investor memories can be very short—often much shorter than is required to be a successful...
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