With stock market indices down 30% or more from their January 1st levels, most investors are battered, bruised, and hoping for happier times. In the midst of a generally depressed stock market, there are still a couple of clever ways to make the most of a bad situation using a Roth IRA. Read the full article

Yesterday, the House Oversight and Government Reform Committee hauled in a gaggle of hedge fund managers to grill them about, among other things, why they should receive such favorable tax treatment.

If I were a congressman, the question I'd have liked to have asked this crowd is, “Why is it so often the case that when hedge funds fail, they don’t merely fail, they implode, like dying stars?” This failure mode seems especially inappropriate for an investment class that's often touted as a way to make money in both good times and bad. Read the full article

Prescription processor Express Scripts recently reported that some of the confidential data that it maintains on millions of patients has been compromised. In October the company received an extortion letter from someone who possessed names, Social Security numbers, and prescription information for about 75 people. Some of Express Scripts’ clients (typically these are health benefit plans) received similar threats.

The company has established a website to provide information about the data loss, although at present the site doesn't contain much real information. Express Scripts believes it has identified where the lost data was stored, but gives no indication that it has figured out how many people's information was stolen.

As I’ve mentioned before, stolen medical data sells for a premium because it can be used to commit insurance fraud; medical data theft is potentially much more lucrative than credit card theft. This incident will bear close watching, especially if it turns out that a significant number of people's information was lost. Express Scripts says that it will provide free "identity restoration services" to individuals who become victims of identity theft as a result of this loss – so by the time help is provided, the damage will already be done. Read the full article

I've written several posts on the asset protection limits available to consumers who have invested in a variety of financial assets. With all the changes and adjustments that have taken place in the last few months in the financial landscape, I thought it might be helpful to provide a single article summarizing the insurance /protections currently available to investors. Read the full article

Last week, financial journalist and author Jane Bryant Quinn polled several members of the National Association of Personal Financial Advisors (NAPFA) for our opinions on whether it's still a good idea to have stocks in a retirement portfolio. The consensus? In a word, "yes." Read the full article

This completes the series of posts that I started during National Protect Your Identity Week. I'd like to finish by discussing several more ways to avoid becoming a victim of online ID theft. Read the full article

With so much attention being given to the $700 billion bailout of banks and the financial industry in the Emergency Economic Stabilization Act of 2008, not much has been said about the individual income tax provisions included in the massive 440-page bill passed last month.

If you'd like to avoid searching the full bill for the parts that might be personally relevant, here's a quick summary of some provisions that could be interesting to you even if you're not an enormous bank. Read the full article

The most common retirement planning mistake is a sin of omission: often, people just don't make a plan, perhaps because thinking about doing it is overwhelming. A recent Bankrate, Inc. poll showed that only 28 percent of respondents expect to be able to retire comfortably. In last year's version of the poll, 44% of those polled indicated that they were saving 5% or less of their gross income for retirement. This year's stock market collapse and depressed economy will be especially punishing to those close to retirement who were under-prepared. Read the full article

The IRS is reporting that more than 383,000 regular refund and economic stimulus checks have been returned as undeliverable by the Postal Service.

Taxpayers whose economic stimulus checks are not in the mail by Dec. 31 will lose out, because by law the checks cannot be sent out after that date. If you're expecting a check and haven't received it yet, browse over to the IRS's website and use the Stimulus Payment tool. Addressing errors must be corrected by Nov. 28 in order for checks to be processed in time. The "Where's My Stimulus Payment" tool provides instructions on how to update your address if needed or you can call (866) 234-2942. Read the full article

Most people thought that the Federal Reserve was being generous when it provided $85 billion to AIG in an equity deal plus $37.8 billion in liquidity lending. As it turns out, that might not be enough to keep the company going. Read the full article

Today I received another bogus e-mail claiming to be from Melrose Cooperative Bank, a bank with which I do no business. It's such an excellent example of the application of social engineering to phishing fraud that I decided to share it.... Read the full article

Last month I wrote that the federal government, in its takeover of Fannie Mae and Freddie Mac, had begun effectively guaranteeing the debt of the two agencies.

But it became clear this week that the government is still hedging about the extent of its backing of the agencies' debts. Read the full article

It looks like this week's discussion on identity theft will probably overflow into next week a bit, because I'm finding new information to share. Having discussed some of the social engineering-based approaches to stealing your private information, today I'd like to take a brief look at how you can protect your computers against more subtle forms of attack. Read the full article

Only about 10 to 15% of identity thefts with known causes have been attributed to online data theft, but this statistic is not very reassuring. According to the Identity Theft Assistance Center, only 42% of ID theft victims are able to determine how their information was stolen. If the majority of victims don't know how their information was stolen, it may not be safe to assume that the 10-15% figure accurately represents all ID theft losses attributable to online sources. How can you avoid being victimized online? Read the full article

The parties involved in the Lehman credit default swap (CDS) auction are settling up today, and everyone is hoping that none of the participants got too badly burned (even if they're hedge funds). Read the full article

The Federal Reserve announced this morning that it is creating a Money Market Investor Funding Facility to ease tensions in the short-term credit markets. Read the full article

Since this week is National Protect Your Identity Week, I’ve decided to post a couple of articles that are largely drawn from a newsletter that I wrote a while ago. The threat of identity theft is real, although as I have noted before, ID theft rates don’t seem to be increasing. Even so, if you aren’t taking precautions to avoid identity theft, you make yourself an easy target. Fraud-related theft tends to increase in times of economic crisis, so it’s wise to be cautious.

The National Foundation for Credit Counseling is spearheading National Protect Your Identity Week; you may want to check out their Protect Your ID site, which has a number of useful resources on this topic. Read the full article

Today, the FFS Blog is participating in Blog Action Day 2008. Along with over eight thousand 9,700 other bloggers, my topic today is poverty.



Read the full article

This is a question that most people will face sooner or later, since labor statistics indicate that the average person entering the workforce will change jobs at least seven times. What follows is a short discussion of some of the key considerations that should be kept in mind as you evaluate this question. This summary is not personalized financial advice; remember that there will be tax and/or other financial consequences depending on what you decide to do. Read the full article

I had no idea when I began this web log in April that I'd be writing an average of four posts a week. But activity in the financial markets has been extraordinary this year; in addition to the educational posts that I had planned to write, I've written many more posts related to current events than I'd envisioned. There are a number of posts I hope to write in the near future: more on hedge funds, life insurance, charitable giving, the cost of college, buying versus renting, retirement - when I can find the time.

I definitely wasn't planning to write my 100th post right after the biggest down week in the history of the S&P 500 and the DJIA. The turmoil in the markets caused an extraordinary increase in my site traffic. According to Quantcast.com, my average monthly traffic is at 2,300 2,500 people per month and still climbing. I'm not assuming that it will stay that high after the markets calm down, but it will be interesting to see what happens next! Read the full article

Until now, it hasn’t been entirely clear how much damage will result from the Lehman bankruptcy. An auction taking place today will be an important step in assessing which financial institutions stand to take a hit.

Today’s auction involves a type of security that many people know little about or have only heard of recently: credit default swaps. Read the full article

As part of the Emergency Economic Stabilization Act of 2008, the level of FDIC insurance coverage has increased as of October 3rd to $250,000. As I noted in an earlier post, it’s possible to have much more than $250,000 of coverage at the same bank, because the coverage depends on the titling of the account. Read the full article

Saturday’s Boston Globe reported that MA Treasurer Tim Cahill has approached the Treasury about extending credit to the state on terms similar to those that have been offered to Wall Street, and the LA Times says that the “Governator” of California has also written Treasury Secretary Paulson to ask for a short-term loan of $7 Billion. Read the full article

Today's WSJ notes that Fidelity, Vanguard, and T. Rowe Price Group have signed up for the Treasury Dept's guaranty fund for money market funds that were held prior to September 19th. Now all the major mutual fund families with large money market funds appear to be participating in the fund (Charles Schwab is also on the list).

Investors wondering about their accounts should check their fund's web site; participating funds seem to be announcing their participation fairly prominently. You may also want to confirm that the specific fund that you own is covered; for example, Schwab's U.S. Dollar Liquid Assets Fund is not included because it's not a U.S.-based money fund.

The guaranty fund will be in effect for at least three months and the Treasury dept. has the option to extend the coverage for a year. I decided to add this post because the blog is still getting a lot of traffic from people with questions about whether their mutual funds or money market funds are insured, and this information might be helpful to them. People with questions might also want to try the Treasury's FAQ page on the money-market guaranty fund.

See a related post here: How Can I Tell If My Money Market Fund Is Safe? Read the full article

As recently as the end of September, many European commentators were describing the current subprime-ignited financial crisis as evidence of American arrogance. Now, however, the other shoe has dropped, and credit-related sickness is evident in the European banking system too. Read the full article

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And now, to keep my lawyers happy: This site is for educational and informational purposes only. Nothing contained here should be construed by anyone as an invitation or solicitation to buy or sell any security. This site does not contain personalized legal, tax, investment, or financial advice. Users of this site should consult with a qualified adviser to obtain advice suited to their personal circumstances. Any links provided here to other web sites are for informational purposes only. We take no responsibility for the accuracy or content of linked sites.

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