Financial Times One-Year Subscription for 2,000 Frequent Flyer Miles
If you have frequent flyer miles from American, Delta or Northwest airlines which you have no other use for, you can get a 1-year subscription to Financial Times newspaper for 2,000 miles.
I like Financial Times because the FT has a lot of analysis and commentaries and a good coverage for international business news. It’s a true world business newspaper whereas the Wall Street Journal is more focused within the U.S. Although FT’s home base is in the UK, you are getting its US edition. There’s still enough coverage for U.S. business and financial news. The commentaries are often written with an outsider’s angle, which is very nice. The letters to editors come from intelligent people all over the world.
This is a great deal because the 1-year subscription to Financial Times normally costs $99. A 1-year subscription to its chief competitor the Wall Street Journal costs $249. At a usual value of $0.02 per mile, 2,000 frequent flyer miles are only worth $40. So for a value of about $40 you can get a quality newspaper delivered to your home or office six days a week for one full year. I see the paper as an ongoing business education at very low cost.
Free E-File Is NOT Free
The tax preparation software companies already started selling their packages for 2008 tax year. The two major players Intuit and H&R Block both advertise that they include free federal e-file in their software this year.
From Intuit (maker of TurboTax):
Automaker Bailout Loan: Secured Or Not?
News came that the federal government is going to give a $17.4 billion loan to GM and Chrysler. It’s still not clear what the government receives as security for such loans. The Associated Press article on Yahoo! said,
“Under terms of the loan, GM and Chrysler must provide the government with stock warrants giving it the option to buy GM and Chrysler stock at a specific price.”
3 Reminders About Year-End Mutual Fund Distributions
I wrote on Tuesday that I bought PIMCO CommodityRealReturn Strategy Fund D (PCRDX) on Dec. 5, 2008. It’s a good segue to today’s post. As luck had it, only a few days later, my jaw dropped when I saw the price of the fund dropped 25% in one day.
It turned out it was just some year-end distributions. You probably heard or read about the usual advice “don’t buy a fund distribution” or more generically “don’t buy a dividend.” So how do fund distributions affect investors? What exactly is so bad about buying a distribution?
Ratings in Magazines Versus Actual Customer Experience
Good customer service is worth paying for. I think everybody understands that. But in this age of easy price comparison, we sometimes forget. Fellow blogger indexfundfan is having trouble with TradeKing, an online discount broker. TradeKing is holding his money hostage for 60 days. According to TradeKing, it was rated
- #1 in customer service by SmartMoney Magazine in 2008
- #1 Discount Broker by SmartMoney Magazine in 2006 and 2007
- the highest ranking of 4 stars in Barron’s 12th Annual Survey of Best Browser-Based Online Brokers
- an Official Honoree in the Financial Services category in the 12th annual Webby Awards
Looks impressive, right? TradeKing has been aggressively promoting itself with a $50 signup bonus for new customers and an affiliate program which pays referral money to websites that help promote it. But based on the way TradeKing treated indexfundfan, especially how it suspiciously changed its website after he complained about the 60-day ACH holding period, I doubt it has the best customer service.
Diversifying Portfolio with Commodities Futures Fund
I first heard about commodities futures in the last bear market. In 2002, commodities futures returned something like +25-30% while the S&P lost 22%. People were saying back then commodities futures were a great investment because they had “equity-like” returns while being uncorrelated with the stock market. This characteristic would add diversification to one’s portfolio and at the same time not reduce its return like adding bonds would do.
PIMCO introduced a commodities futures fund for retail investors in 2002. I wasn’t so convinced by the story. In my mind I had always associated commodities and futures with speculation. I also thought people were chasing performance while justifying it by saying they were doing it for diversification.
Since then, commodities futures funds had very good returns, all the way through the summer of 2008, driven by rapidly increasing prices of oil, agriculture products and metals. I was watching on the sideline thinking somehow I missed the boat. Then it crashed down hard. In a period of about five months, the price of the PIMCO fund dropped over 60% (blue line is the PIMCO fund; red line is S&P 500).
Reforming the 401k: Good Ideas and Bad Ideas
When stock market crashed, people’s 401(k) accounts crashed with it. Needless to say people are not happy. They are saying 401k’s don’t work. Wall Street Journal published an article How to Fix 401(k)s by Anne Tergesen. It listed many proposals for changing the 401k’s (and 403(b)s and 457′s). I think some of the proposals are good ideas while some others aren’t so good. I’m listing the ideas here with some short comments. Read the WSJ article if you are interested in more details.
Good ideas:
1. Auto-enroll all employees. Default contribution % and investment. Average participation rate among eligible employees in companies with a defined contribution plan is about 70%. That’s too low. Auto enrollment and default contribution and investment choices make it easier for everybody to participate in the plan. If the employees did nothing, they will be in the plan, have a reasonable contribution percentage and a reasonably diversified investment.
Jumped on Twitter Bandwagon
I keep hearing about Twitter. Wikipedia has this description:
“Twitter is a free social networking and micro-blogging service, that allows its users to send and read other users’ updates (otherwise known as tweets), which are text-based posts of up to 140 characters in length.”
Congressional Oversight Panel Report on Bailout
As I was driving home from work last night, I heard Professor Elizabeth Warren interviewed on Fresh Air program on NPR. Professor Elizabeth Warren is a Harvard law professor. She wrote the book The Two Income Trap which I reviewed before. She was also in the documentary Maxed Out which I also reviewed. She is the chairwoman of the 4-member Congressional Oversight Panel for Economic Stabilization, which was created to oversee the $700 billion Troubled Asset Relief Program (TARP) and make reports to Congress. The other three members of this panel are:
- Rep. Jeb Hensarling (R-TX)
- Richard H. Neiman, Superintendent of Banking, State of New York
- Damon Silvers, Associate General Counsel, AFL-CIO
The interview was about the first report from this panel. The report raised ten questions: » Read more …
PayPal Security Key Gone Mobile
I have a PayPal account and I have been using the PayPal security key for a while. The PayPal security key is a little key fob which generates a random 6-digit sequence every 30 seconds or so. You use it together with your password when you log in to your PayPal account. This provides the so-called two-factor authentication which is more secure than just a user name and a password. People who work in the corporate world use the same kind of device also known as a security token or RSA SecurID for accessing the corporate network through VPN. E*Trade also gives this kind of security device to its customers (link).
The PayPal security key has worked well for me. The only thing is it’s a separate thingy I have to keep in my bag. Imagine if all banks, brokerage firms and credit card companies start issuing these. I will have like 10 of them. Finding the right one will become a challenge. Recently PayPal started offering a mobile security key service. For a one-time setup, you enroll your cell phone for this service. You enter your cell phone number. PayPal sends a random code to your phone via SMS text message. You confirm the random code and prove that you own the phone. Next time when you log in, after you put in your password, PayPal will ask you for a security code. You click on a button and let them send a security code to your enrolled cell phone by text message. You check the text message on your phone, enter the code, then you are in. If somebody stole or guessed your password but they don’t have your cell phone, they still can’t get in. I tried the mobile security key and it worked smoothly. I get a text message in about 2 seconds after I click on the button on PayPal. With the mobile security key, I won’t have to keep my hardware key handy because I always have my cell phone with me.
PayPal doesn’t charge anything for sending the text message, but if your cell phone company charges you $0.20 for each incoming text message, it will cost you $0.20 every time you log in to PayPal. In such case you are better off getting the hardware security key which costs $5 including shipping but it’s just one-time. The mobile security key service works the best if you have unused text message allowance with your cell phone plan or if you don’t log in to your PayPal account more than a few times a year.
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