Is Daylight Saving Time the New Standard Time?

Tomorrow, the clocks move forward an hour for the start of Daylight Saving Time. To me, something isn't right in the terminology used for the time change. Daylight Saving Time now lasts about about eight months and Standard Time is only in use for about four months.

I vote for Daylight Saving Time taking over the last four months. That way I won't have to lose an hour of sleep once a year and spend the next month adjusting :-)

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

Inverse (Short) ETF Portfolio Update - 3/7/09, Closed Out All Positions

The stock market is continues to be strange in early 2009. The market is volatile at unexpected times, e.g. after announcements by the Obama administration, and surprisingly calm in the face of bad news. I believe the market action indicates that it may be nearing a bottom.

To hedge against the market falling in November to December, 2008, I had purchased small positions of Ultrashort Real Estate Proshares (SRS), Ultrashort Financial Proshares (SKF) and Ultrashort Oil & Gas Proshares (DUG). These are inverse market index ETFs, meaning they rise when the market falls and vice versa.

In mid January, 2009, I was able to sell the Ultrashort Financial Proshares and one lot of the Ultrashort Real Estate Proshares at a profit. In the past week, I closed out the two remaining ETF positions, because I believe the market is near a short term bottom. Ultrashort Real Estate Proshares was closed out at a profit and Ultrashort Oil & Gas Proshares at a loss, but has a small overall net gain since a $6.08 dividend was paid in December, 2008.

	Hedging in a Volatile Market
Inverse ETF [purchase date]	Shares	Purchase Price	Final Results
Ultrashort Oil & Gas Proshares (DUG). [11/21/08]	100	$38.21	sold 50 shares at $33.07 on 3/2/09 sold 50 shares at 33.94 on 3/5/09
Ultrashort Financial Proshares (SKF)[12/11/08]	20	$118.99	sold 10 shares at $140.33 on 1/14/09 sold 10 shares at $165.95 on 1/16/09
Ultrashort Real Estate Proshares (SRS) [12/11/08]	20	$81.64	sold all shares at $98.58 on 3/3/09
Ultrashort Real Estate Proshares (SRS) [12/17/08]	20	$62.62	sold all shares at $66.82 on 1/14/09

I purchased these ETF because I believed they would provide some protection if the market should fall. However, upon further investigation, I learned that these ETFs can fall even if the market index declines over time, due to the ETFs being based on the daily return of the index, which Proshares customer service confirmed when I asked them about my observation. The Motley Fool has a great explanation, with an example, of how these 2X inverse ETFs may not protect against a long term decline in the index.

Based on my new learnings, I will not buy any inverse ETFs based on my long term expectations of the market. . However, if there is a V-shape rally in the financials, I may consider another 20 share position in the Ultrashort Financial Proshares ETF, if it drops below $100 :-)

Lesson learned: Don't buy derivative investments when I don't fully understand how they work, as in the case of 2X inverse ETFs.

Disclosure: At the time of publication, I no longer own any shares of the ETFs mentioned.

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

Dealing with Retirement Planning Uncertainty

With all the uncertainty in the finances, stock markets and economies, retirement planning is getting much more difficult. Here are just a few of the elements making retirement planning more challenging:

Poor stock market performance. Historically, the stock market returns have been 8 to 12% over the long periods. However, the returns for the past decade are now negative. The major indices are down over 50% since the most recent peak in October, 2007, resulting in index funds also falling over 50%. Surprisingly, some blue chip stocks, e.g. financial companies, have fallen up to 98% in the past couple years.

Financial advisors used to conservatively assign 6-7% long term returns for a diversified stock portfolio to growth of a retirement portfolio. However, in today's market, 6-7% seems overly optimistic. Unfortunately, using negative returns of the past decade doesn't offer much hope for growth either.

Declining dividend and interest returns. Retirees that depend on dividend and interest income have received rude awakenings this past year. Previously consistent and rising dividends payments are being cut or eliminated. For example, Dow Chemical, Pfizer, General Electric and many financial stocks have significantly cut their dividend in the past year. Dividend cuts of 50 to 90% are reducing expected income by the same amount.

In addition, interest rates have dropped significantly over the past six months as investors look for safe havens, e.g. U.S. Treasuries, where they can invest.

Home prices declining. Values are no longer growing at 3-5% per year. Often a major part of a person's net worth, homes prices are now falling since the bursting of the housing bubble in 2007. In addition, one in nine mortgage holders are falling behind in payments.

How can one plan for retirement using these types of investment returns? The answer is one can't. These type of returns would lead me to conclude my only options are to work forever or to depend primarily on Social Security :-)

For me, the solution is to assume that long term returns will be close to the average and adjust for short term (up or down) variances. To me, an assumption of 7% long term returns from stocks is a reasonable estimate. Although it appears unlikely now, I believe the market will be at or above 7% returns within a year.

If the market continues to fall, our adjustment will be to continue reducing expenses and increase wage income through part time jobs or a full time job. If we were still working, we'd reduce spending and increase the amount of funds saved.

If the stock market has returns over 7%, we will adjust by increasing our cash position, and perhaps paying down our mortgage, which is our only debt. We would do this to be better prepared for the next market decline, since I expect the year to year volatility to be much higher over the next few years.

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial or retirement advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

Creating a Game Night

When we were children, my sister and I regularly played board and card games. It was a great form of entertainment -- cheap, spontaneous, and fun. Although there wasn't a scheduled game night, we regularly played Monopoly, checkers, Chinese checkers, Trouble, Parcheesi and various card games.

Our 4 - 1/2 year old is just starting to understand the concept of games. Over the past year, I've been slowly teaching her the concept of more complex games by rolling the dice, moving pieces, and collecting wedgies on a Trivial pursuit board. We've also been moving chess and checkers pieces on a game board and playing some card games designed for young children, such as Go Fish.


Last week, we had our first family Game Night at the My Wealth Builder household. We played two games, Blokus and Moose in the House. While both games were a little advanced for a 4 -1/2 year old, she was able to play both with a little help from us. In fact, she even won a couple rounds of Moose in the House as my spouse and I focused on beating the other.

It was a great night. We made some popcorn, played a few games and had a lot of fun for one evening. We'll definitely continue doing a game night periodically and, perhaps, even try to make it a weekly event.


For more on Crossing Generations, check back every Thursday for a new segment.

This is not financial or family advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

Need More Dead Cats

With the sharp declines in the indices and many stocks, I've been waiting for the proverbial dead cat bounces to enable selling of some of our stock positions. Unfortunately, the decline in the indices has been relatively steady with only a small rally in late November, 2008 through December, 2008, after Tim Geithner was announced as the Treasury Secretary nominee.

While I took the opportunity to sell off some stocks in late December, 2008, I would love to get several more opportunities in the next few months. My current plan is to continue to sell off into any significant rallies, and, when the market declines again, rebuy some of the stocks. Hopefully, there will be a few more dead cat bounces in the next few months. However, it's beginning to look like even the dead cats are unsure of what to do in this market :-)

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

Waiting After Geithner's Testimony to Buy

With the market at 12 - year lows, I started to place buy orders for select stocks yesterday. While I don't know if the market has bottomed, I believe this is a good time to make small additions to existing positions.

I just found out that Treasury Secretary Tim Geithner is testifying before a House Panel today at 12:30 PM. So I'm going to wait until after that event before placing any more orders. It seems every time he speaks, the market responds by declining :-(

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

Links to Carnivals from February 24 - March 2, 2009

Here are links to Carnivals in which My Wealth Builder participated from February 24 to March 2, 2009:

Carnival of Satire #111

Carnival of Financial Planning

Carnival of Personal Finance

Carnival of Family Life

For some interesting articles from the blogosphere, check out these Carnivals and give the hosts some recognition for their hard work.

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial or family advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

3/2/09 Stock Position Update - Slightly Up Despite Dow and S&P Reaching 12 Year Lows

I continue to take no further action based on my buy list and short list of 7/7/08. I have taken four long and one short position, which has been closed. Since all the stocks have received sell signals, I'm no longer buying from the 7/7/08 buy list. I have also not taken any action on the 10/20/08 Buy List, which has received sell signals for 5 out of 5 of the stocks by 11/2/08. I finalized a new buy list on 1/12/09.

The portfolio was up even though market indices were down 4% for the week. The holdings are up 3.75% from the previous week, due primarily to the energy stocks advancing slightly. The overall portfolio is down 29.3% and the remaining holdings are down 45.3%. The previous bottoms occurred October 10, 2008 at -35.0% and -53.0% respectively. The only positive still has been the gain from shorting Las Vegas Sands. Otherwise, the prices of these stocks have been destroyed by the October through November decline.

For reference, the stocks on my 7/7/08 buy list were: Potash (POT), Research in Motion (RIMM), Bucyrus (BUCY), Williams Cos. (WMB), Southwestern Energy (SWN), Hess (HES), and Range Resources (RRC). The system has given a sell signal for every stock: Williams Cos. (8/8/08), Range Resources (8/22/08), Hess (9/12/08), Research in Motion (9/12/08), Southwestern Energy (9/26/08), Postash (10/10/08) and Bucyrus (10/10/08). The stocks on my 7/7/08 short list were: Las Vegas Sands (LVS), Sears Holdings (SHLD), and Life Time Fitness (LTM). Southwestern Energy was the only stock identified for the 1/12/09 buy list.

	From My Wealth Builder 7/7/08 and 1/12/09 Buy List
Stock [purchase date]	Shares	Purchase Price	Price on 2/27/09
Range Resources(RRC) [7/10/08]*	50	$58.17	$35.57
Potash (POT) [7/18/08]*	10	$215.09	$83.97
Southwestern Energy (SWN) [7/18/08]*	50	$39.46	$28.77
Potash (POT) [7/24/08]*	10	$192.02	$83.97

*Range Resources received a sell signal on August 22, 2008. Southwestern Energy received a sell signal on September 26, 2008. Potash received a sell signal on October 10, 2008. I plan to sell the position once it reaches the original purchase price, which may take a very, very long time.

At this point, I will continue to hold these stocks and make no more purchase since sell signals have been give for every stock, except for Southwestern Energy, which appears on the new 1/12/09 buy list.

	From My Wealth Builder 7/7/08 Short List
Stock [short date]	Shares	Short Price	Price
Las Vegas Sands (LVS) [7/7/08]	100	$38.10	closed 7/11/08 @ $33.69

I have only able to short Las Vegas Sands so far, which I have closed. I didn't short Sears Holdings and Lifetime Fitness since both stocks need to be "rented" from a shareholder for about 0.1% a day and a minimum of $50,000 needs to be shorted.

At first, I was looking for other stocks to short, but at this point, I think it's too risky to be shorting .

On 8/15/08, Las Vegas Sands closed at a short term high of $56.30. It closed at $6.32 on 10/24/08, rebounded to $14.19 on 10/31/08 before falling again to $3.23 on 11/21/08. It closed at $2.28 on 2/27/09. It's too bad I didn't hold the short position until now :-)

The market continues to be choppy. The Dow and S&P have reached 12-year lows. As of the close on 2/27/09, the Dow, Nasdaq and S&P 500 indices were respectively at 7062.93, 1377.84, 735.09. The Dow and S&P 500 are now below their respective 2008 closing lows of 7392.27, and 752.44 , respectively. The Dow, Nasdaq and S&P 500 are returns are -18.92%, -12.63% and -18.18% respectively year to date.

Economists now acknowledge that the economy has been in recession since December, 2007. I expect the market will likely continue to be choppy. For now, I am looking reinvest the cash that was raised at the end of 2008 and I will no longer be trying to short stocks. I held off reinvesting last week and plan to trickle in around 25% of the funds over the next few weeks. However, we will not be adding any new money, until the Dow crosses either 6000 or 10,000.

Disclosure: At time of publication, I am long Range Resources, Potash and Southwestern in my trading account. The managed accounts are long Hess, Potash, Range Resources, and Sears Holdings.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

Stocks Fall to 12 Year Lows

According to CNNMoney.com, the Dow and S&P have fallen to 12 -year lows. At 7062.93, the Dow had its lowest close since May 1, 1997 and at 741.02, the S&P 500 had its lowest close since December 18, 1996.

Although the market may go lower, I think it will be a buying opportunity this week and plan adding to our positions in stocks that I believe will do well as the economy recovers, e.g. Amazon (AMZN), Monsanto (MON), and Google (GOOG).

Disclosure: At time of publication, we own shares of Amazon, Monsanto, and Google. In addition, we have sold put options to open on Monsanto.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC

3/1/09 Bottom Fishing Portfolio - Making Small Buys in Monsanto and Amazon

Since October 3, 2008, my attempts to buy stocks near a bottom have failed miserably. My first attempt was to buy financial stocks, which have since fallen 50 to 90%, and an agricultural stock, which has fallen 14%. I have also experimented with buying calls on auto stocks and financial stocks, also without success. I've had the most success selling put contracts to open on Monsanto (MON) and Energy Conversion Devices (ENER), which earned a few hundred dollars to slightly offset the losses.

At this point, I am no longer buying any financial company stocks, which I consider to be toxic. In the near term, the only investment I will make in a financial rebound is buying calls, which limits the downside. I had already used the call buying strategy with Ford, with no success, prior to the auto bailout. I briefly considered buying stocks with 6-7% dividends, but then several of the potential candidates cut their payout significantly. The only strategy that has been profitable is selling puts short on Monsanto and Energy Conversion devices.

Because the strategy is working, I will continue to sell put contracts to open. In addition, since I think a bottom is near, I have decided to make selective buys of stocks that I believe will emerge well from the recession, Monsanto and Amazon. This week I bought 50 shares of Amazon and 100 shares of Monsanto.

The portfolio prior the the purchase of Monsanto and Amazon was up 3.2% in the past week, versus a market fall of 4.06% in the Dow. Financial stocks rallied last week on unfounded expectations of a Treasury plan. The overall portfolio before this week's purchases was still down 50.0%

	Bottom Fishing Portfolio
Stock or Option [purchase date]	Shares	Purchase Price	Price on 2/27/09
Bank of America(BAC) [10/3/08]	100	$38.00	$3.95
J.P. Morgan (JPM) [10/3/08]	100	$49.74	$22.85
Wells Fargo (WFC) [10/3/08]	100	$37.07	$12.10
Monsanto (MON) [10/3/08]	50	$88.97	$76.27
Ford Dec 5 call (FLA) [12/2/08]	1000	$0.078	expired 12/20/08 at $0
Ford Jan 7.5 call (FAU) [12/3/08]	1000	$0.088	expired 1/16/09 at $0
PNC May 45 call (PNCEI) [1/20/09]	100	$1.51	$0.60
PNC Jan 55 call (WYLAK) [1/20/09]	100	$1.71	$1.21
Monsanto (MON) [2/23/09]	50	$76.38	$76.27
Amazon (AMZN) [2/26/09]	50	$64.45	$64.79
Monsanto (MON) [2/26/09]	50	$80.26	$76.27

Currently, I have profited from all five put contracts which have been closed or allowed to expired. I will continue to sell put contracts on Energy Conversion Devices and Monsanto.

	Put Contracts Sold Short to Open
Option [short date]	Shares	Short Price	Price on 2/27/09
Monsanto Nov 60 put (MONWL) [10/3/08]	100	$2.39	closed on 10/29/08 for $0.91
Energy Conversion Nov 20 put (EQIWD) [11/12/08]	100	$0.69	expired 11/21/08 at $0
Monsanto Dec 40 put (MONXI) [11/20/08]	100	$1.19	expired 12/20/08 at $0
Energy Conversion Dec 17.5 put (EQIXW) [11/25/08]	100	$1.39	expired 12/20/08 at $0
Energy Conversion Feb 15 put (EQINC) [1/14/09]	100	$0.44	expired 2/19/08 at $0
Monsanto Mar 65 put (MONOM) [2/23/09]	100	$1.09	$0.85
Energy Conversion Mar 20 put (EQIOD) [2/26/09]	100	$0.74	$1.30

It's clear to me that the financial stocks will not likely recover in the near future. If these stocks should rally significantly, I will look to close out the long positions in the financial stocks.

Disclosure: At time of publication, I own shares of Bank of America, J.P. Morgan, Wells Fargo , Monsanto and Amazon shares. I am long PNC call contracts and short Monsanto and Energy Conversion Device put contracts.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial or investment advice. Please consult a professional advisor.

Copyright © 2009 Achievement Catalyst, LLC