Opinion

John Wasik

Fat Lady Hasn’t Sung Yet: OWS Shows Fight Is Far from Over: Explosive Actions on 2 Month Anniversary of Movement http://t.co/2shLcCXk

Nov 18, 2011 14:12 UTC

Fat Lady Hasn’t Sung Yet: OWS Shows Fight Is Far from Over: Explosive Actions on 2 Month Anniversary of Movement http://t.co/2shLcCXk

Thousands Occupy Wall Street: http://t.co/zpOQI47f via @AddThis

Nov 17, 2011 22:59 UTC

Thousands Occupy Wall Street: http://t.co/zpOQI47f via @AddThis

Real Estate: Why home prices won’t bottom out

Nov 16, 2011 17:56 UTC

By John Wasik

(Reuters) – Watching the U.S. home market struggle to rebound is like listening to children in the back of a car. No, we’re not there yet.

The National Association of Realtors reported that ten real estate markets are “leading the nation toward a general recovery and stability of the housing sector,” but myriad problems are going to weigh down the housing market for months to come.

The lingering malaise in the economy has triggered a new wave of defaults and foreclosures. After five straight quarterly drops, foreclosures nationwide shot up 14 percent from the second to third quarter this year, according to data released by Realtytrac, the foreclosure information service (see link.reuters.com/kaw94s), in October.

More precious than gold? Farmland has glowing appeal

Nov 15, 2011 15:19 UTC

Nov 15 (Reuters) – Where there’s muck, there’s money, the
old expression goes.

With 7 billion people now needing food on this planet,
putting your money into soil and agriculture might be a
long-term investment to consider. You’d certainly be in good
company: In recent years, high-profile investors such as Jim
Rogers and George Soros have made investments in farmland (see).

What makes farm property attractive? It has a finite supply
and may become even scarcer with global warming,
desertification and development. And with a rising population,
more tillable land will be needed.

Four international ETFs to escape financial chaos

Nov 11, 2011 14:51 UTC

Nov 11 (Reuters) – The financial troubles of Europe and the
U.S. have become fiscal soap operas on a grand scale. If you’re
an individual investor, where can you escape the endlessly
singing fat lady?

There are just a handful of countries that are reasonably
solid long-term investments. They are not without risk, yet
their leaders have managed their economies better than most
industrialized nations and they are thriving. The healthiest
economies also managed to invest in their countries while
avoiding the banking cyclones that are ravaging the U.S. and
Europe.

Here are four places with a positive story: gross domestic
product growth (GDP), top sovereign debt ratings, low or no
budget deficits (relative to larger industrialized nations) and
healthy domestic investment.

How to identify overpriced target date funds

Nov 8, 2011 14:38 UTC

Nov 8 (Reuters) – Not all target date funds are created
equal.

While these prepackaged, risk-reducing portfolios make a
lot of sense for retirement saving, you don’t know if the funds
within them are good choices unless you open them up and peel
them apart.

The lowest-cost among them contain index funds that track
baskets of securities. While neither a perfect nor risk-free
solution, these funds offer an efficient way to invest in the
entire stock or bond market without engaging costly active
management.

The products are designed to ratchet down stock exposure –
and then hold more bonds — the closer you get to a planned
retirement age or “target date.”

5 reasons to defy the bears and buy stocks now

Nov 4, 2011 17:24 UTC

Nov 4 (Reuters) – Buying stocks shouldn’t make sense
now.

Yet despite all of the growling in Europe, there are still
reasons why you should invest in U.S. stocks.

This is a contrarian view, to be sure. The last quarter was
the worst for stocks since 2008, with the S&P 500 index
suffering a 14 percent loss. For those keeping score at home,
that wiped out some $2 trillion in wealth.

Adding salt to that wound is the Federal Reserve’s slashing
of its growth forecast for next year and anemic U.S. job
growth.

Zap zombie funds within your portfolio

Nov 1, 2011 15:39 UTC

zombie index fundsDo you have zombie index funds within your portfolio?

Instead of eating up your brains, they devour your nest egg with high expenses and walking dead performance. They may be lurking within your 401(k)-type plan or individual retirement account.

I like index funds because they generally can track nearly any kind of asset class. As such, they are the white bread of investing and should cost about the same from fund to fund. The cheaper the better. Why pay Nieman-Marcus prices for the same thing you can get at Costco or Sam’s Club for less?

You can vanquish these funds without overtly violent acts, but first you have to identify them. Unfortunately, mandated fee disclosure is still pending, so you have to take the initiative.

5 ways income inequality happened, and will continue

Oct 28, 2011 15:14 UTC

By John Wasik

(Reuters) – As if on cue for an Occupy Wall Street commercial, the latest Congressional Budget Office report highlighted the large crevasse between the upper 1 percent of U.S. households and the rest of us.

When it comes to income inequality, this is what U.S. politicians should be digesting now. While it’s hardly a major revelation that for the top 1 percent of earners real after-tax income rose 275 percent between 1979 and 2007, the top 20 percent made more in after-tax income than the remaining 80 percent. That’s quite a difference since the lowest-income group’s median income only rose 18 percent.

Income inequality couldn’t be more of a mainstream issue as some 70 percent of Americans surveyed want wealth shared more equally.

Meditations on money mania: Why we gorge on the financial buffet

Oct 24, 2011 14:41 UTC

Are you a money maniac? While finishing up Michael Lewis’s “Boomerang,” his latest book on the financial meltdown, I was intrigued by a few of his observations on a cultural and psychological malady.

Since some of my academic training is in psychology, I’ll take a stab at what I think is going on. We spend (and eat) too much because the culture encourages it at every turn, but we have the ability to resist temptation. We’re hardwired to do the wrong thing, yet can still make rational decisions.

There’s also a part of the brain that Lewis didn’t really explore in much depth. I’m not sure what it’s called, but it involves conflating risk with the likelihood of financial success. Behavioral economists have many descriptions of these miscues. One might call it intentional and persistent denial.

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