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Pension assets are coming back, sort of

Apr 3, 2012
Yes, public pension plans are ripe for reform. But overhauling these plans is an opportunity to improve pension design for everyone.
Posted In: pensions, 401(k), IRAs, retirement savings, public pensions

Investment fees matter -- a lot

Apr 2, 2012
High fees eat away at returns.
Posted In: fess, investment, pensions, individual investors

A subdued reading on rates

Apr 2, 2012
The survey consensus was for no increase to slight increase in interest rates for 2012. Nothing dramatic. Very muted. There's no sense that the economy will turn gangbusters. At best, the economy will show modest gains in 2012.
Posted In: interest rates, Economy, bonds, Savings

Retirement and working longer

Mar 28, 2012
"A steadily growing portion of the workforce will continue to work at least part-time well beyond the 'normal' retirement age of 65," says a senior research fellow at the New America Foundation.
Posted In: Retirement, Work, Jobs, Social Security, pensions, 401(k)

Home renovation and retirement

Mar 26, 2012
Middle-aged homeowners should think about adding features that make it easy to age in place with any home remodeling project.
Posted In: home, remodel, Retirement, retirement planning

The Supremes and the health overhaul

Mar 26, 2012
However the Supreme Court decides its ruling will push health-care reform to the top of the campaign debate. Health reform won't go away. The costs of the system are too high. The fiscal, economic and household pressures remain too great. Back to the future won't work.
Posted In: health care, medical care, Supreme Court, health insurance

Bats goes bats: The worst IPO ever

Wow! Jaws are dropped all over Wall Street as Bats Global Markets -- the high-speed electronic-exchange -- withdrew its initial public offering (IPO) after computer glitches derailed trading in its stock. It had been priced at $16 yesterday, yet this morning its shares were trading as low as $0.02, according to Bloomberg News. Computer errors also forced a halt to trading in Apple, the world's most valuable company.

Imagine: Bats stands for Better Alternative Trading System. Oops.

The implications of the Bats debacle are huge. The exchange is a creature of the high-frequncy trading market. High-frequency traders use extremely powerful computers and sophisticated algorithms to exploit exceedingly small price movements, buying and selling in fractions of a second. The trading has led to weird market-shaking moments. Regulators are already investigating the firms and the impact of their high-speed trading on the market. In essence, the problem is that the quicksilver computerized networks have outrun the existing regulatory safeguards.

Greater scrutiny is needed.


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Mar 23, 2012

What goes up must come down

Mar 22, 2012
"What goes up must come down" was true with dot-com stocks and the residential housing market. Investors should understand that the same fate lies ahead for corporate profits, argues James Montier of the investment management firm GMO.
Posted In: corporate profits, stocks, Investing, Economics

A rush to hedge against inflation

The federal government sold $13 billion of 10-year Treasury Inflation Protected Securities -- better known as TIPS -- at a record negative yield.

In other words, investor demand was so strong that the yield on the TIPS was less than 0! The negative yield isn't unprecedented. The 5-year TIPS sold at negative yields in the past four auctions and the yield on the 10-year TIPS sold at auction under 0 percent for the first time last January, according to Bloomberg.

Are investors nuts? A yield on most safe investments of 0.0 percent to 1 percent is bad enough. But a yield less than 0 percent? Crazy, right? Not really.

TIPS are specifically designed as a hedge against a rise in the consumer price index, the main inflation benchmark. Right now, inflation is contained. Investors are essentially taking out an insurance policy against the risk that inflation turns out to be higher-than-expected or higher-than-feared over the next 10 years. The higher the inflation rate, the more valuable becomes the inflation hedge -- and vice versa.

The negative yield is essentially the price of the "insurance premium" for the protection from inflation. 

Like most insurance policies, investors hope they're wrong and inflation stays dormant over the coming decade.


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Mar 22, 2012

Reminder on first-time MRDs

What's an MRD, you ask? It stands for minimum required distribution. The reminder? Investors who turned 70 1/2 years old in 2011 should know that March 30, 2012, is the deadline for taking their first annual MRD from their IRAs and 401(k)s.  

According to a note I got from the mutual fund behemoth Fidelity, as of December, 48 percent of MRD-aged Fidelity IRA customers who turned 70 1/2 in 2011 had not yet taken the full required amount. Here's the thing: Investors who do not withdraw their full MRDs by March 30 may get hit with a 50 percent tax penalty on the amount not withdrawn. Ouch.

To be clear, if you're age 70 1/2 and older, you must take your MRD from your traditional IRAs and 401(k)s by Dec. 31 of each tax year. However, if you're taking it for the first time, the deadline is extended until April 1 of the following year. Since it falls on a weekend this year, the deadline is March 30 for tax year 2011. Don't forget.


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Mar 21, 2012

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About this collection

Five years after reporting from China, Kai Ryssdal and a small team return to see what's changed.