(March 1st 2009 – Present)

BND: VANGUARD TOTAL BOND MARKET – (1.34 %) loss

I am thinking about getting rid of this. I only have about 7% of my portfolio in this fund, but I just got it as a small hedge against the market going down more back in the spring.

IGE: ISHARES S&P NORTH AMERICAN – 43.28 % gain

This is an ETF that tracks companies involved in North American natural resources. Honestly, I can’t really explain why this fund has done so well, other than the fact that these stocks were hit so hard in 2008, that the only natural thing to do was rebound.

IVV: ISHARES S&P 500 INDEX – 31.75 % gain

The S&P has risen nearly 400 points in the past six months. I knew the market would recover, and the S&P is my favorite index to track. I think it does the best job at capturing a snapshot of the market without investing in the entire stock market. This one hasn’t surprised me.

IYR: ISHARES DJ U.S. REAL ESTATE – 58.19 % gain

The real estate market plummeted in 2007 and 2008. Even though it hasn’t rebounded much in 2009, things have stabilized, which has allowed many REIT’s to recover. I am still skeptical about this ETF, because REITs are very volatile. It’ll be interesting to see what the gain is on this fund at the end of the year.

VIG: VANGUARD DIVIDEND APPRECIATION – 26.15 % gain

Even though this fund hasn’t been killing it, I know that I will be keeping it for a very long time. It pays a decent dividend, doesn’t fluctuate in price too much, and seeks trusted companies that pay a large dividend.

VWO: VANGUARD EMERGING MARKETS – 27.59 % gain

This is another one that I will keep long-term. Emerging market funds are volatile, but Vanguard seems to know what they are doing on this one. The expense ratio is extremely low, and it has a great track record over a period longer than 6 months.

XLF: FINANCIAL SELECT SECTOR SPDR – 95.24 % gain

Save the best for last. I never thought in a million years this fund would gain 95% in six months! That’s absurd. My only thought process behind selecting this fund was that the financial sector had been beaten down so brutally, that I believed it was extremely under valued back in the early spring. It turns out that I was right. I expect this ETF to decline at the end of the year, but it will still be the main reason why I recovered all of the money that I lost in my 401(k) from 2008. I wish I would have pumped more money into it at the beginning of the year! But when you invest, you can’t think of it that way. Related Posts:

• Update On My IRA Account
• The ETF’s In My Rollover IRA
• Bought The VWO and BND Vanguard ETFs Last Week
• An Update On My Battered Market Sector ETF Strategy
• A Good Article About Leveraged ETFs

Performance Update On My Rollover IRA is a post from: Money Crashers

Here is a list of the funds I currently hold:

XLF: Financial Sector SPDR Index
IVV: iShares S&P 500 index ETF
IGE: iShares S&P North American Natural Resources
IYR: iShares Real Estate Inv. Trust
VIG: Vanguard Dividend Appreciation
VWO: Vanguard Emerging Markets
BND: Vanguard Total Bond Market

Now, here are the gains and losses for each fund since I purchased them in February of 2009. (expressed in terms of percentage)

1. XLF: 62%
2. IGE: 29%
3. IYR: 25%
4. IVV: 21%
5. VIG: 17.75%
6. VWO: 16%
7. BND: (3.8%)

The total percentage gain of the portfolio thus far is 28.25%. Obviously, buying XLF has paid off nicely, and it was a big gamble, but I was pretty confident that the financial sector was highly undervalued at the beginning of 2009. I am pleased with the performance so far, and I anticipate the Dow and S&P to close close to 10,000 and 1,000 by the end of the year. Don’t quote me on that, but it’s just a gut feeling that I have. The bond market fund is simply there as a hedge against inflation. I chose the natural resources fund and real estate, because like the financial sector, they too had huge hits in 2008, and I expected them to make a recovery in 2009 and 2010.

If you have any questions for me about this portfolio, please feel free to make a comment below!

Related Posts:

• Performance Update On My Rollover IRA
• The ETF’s In My Rollover IRA
• Bought The VWO and BND Vanguard ETFs Last Week
• An Update On My Battered Market Sector ETF Strategy
• Simplify Your Finances: Organize Your Investments

Update On My IRA Account is a post from: Money Crashers

1. The Real Estate Industry. It’s down right now, and it’ll stay down for a little bit longer, until the foreclosure situation settles down. Start investing in REIT’s and mutual funds that focus on real estate. The prices are so cheap, and this market WILL come back up in the next five years.
2. Renewable EnergyIn case you haven’t heard, Obama is now our president, and the democrats love talking about saving the environment. My guess is that they will pump a lot of money into efforts to continue to develop renewable energy sources. Look for mutuals and ETF’s that focus on companies dedicated to developing alternative energy sources.
3. The Financial Sector. They are down and investors won’t touch it. Snag financial services mutuals and ETF’s heavy on this industry, because you can buy it at a fraction of the price right now. Once the housing market comes back and the government cleans up the home lendinig industry, this industry will flourish once again with baby boomers starting to retire.

When interviewed by the media about the current state of the economy, Dave Ramsey always responds by saying that he looks at the stock market right now as a “half off sale”. It’s this kind of approach to money and life that makes people successful. If you wake up every day worrying about what is to come, you’ll never get ahead. But if you look for opportunities to become wealthy, increase your income, and develop a new career, you’ll get ahead in life. Think about that this week, and start looking into the real estate, financial, and renewable energy sectors for value stocks.

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Take Advantage Of Values In the Stock Market is a post from: Money Crashers

Here’s my favorite quote from his op-ed:

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense.

You cannot say it any better, and he is dead-on right about this. If you have a 401k or an IRA, then you SHOULD be an investor for the long-term, so all of this economic talk does not matter to you. Continue to buy into the stock market with index funds and mutual funds with good management and low expenses. Be greedy when others are fearful and be fearful when others are greedy — words to live by.

Another good quote from Buffet:

Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.

So, for all of you wondering if you should cash out your 401k or IRA, do not do it. Continue investing in mutual funds that track the overall market and industries that are not over-leveraged. Be wary of WHO you are investing in, not whether your should invest or not.

Have a great weekend everyone. Related Posts:

• Don’t Let Your Fears Stand In the Way Of Investing
• A Good Article About Leveraged ETFs
• The Difference Between YTD Return and Yield
• Investors Pour Into S&P 500 ETFs
• How I Evaluate A Mutual Fund Before Investing In It

Buffet Encourages Investors To Buy Stocks and Trash the Cash! is a post from: Money Crashers

• Performance Update On My Rollover IRA
• An Update On My Battered Market Sector ETF Strategy
• Living Paycheck to Paycheck Will Leave You Powerless
• Update On the Final Version Of The 2009 Economic Stimulus Plan
• What I Would Do with a $100,000 Windfall

Dow Up 936 Points Yesterday is a post from: Money Crashers

What can you say? The stock market had a horrible week, and it was one of the largest sell-offs in American history. Not to mention, the government is buying a percentage of a group of U.S. banks. This is the first time the government has done something like that since the great depression. The worst part is that government continues to meddle in the free markets, and this country is coming closer and closer to socialism. I have had people comment on here in the past asking me why I am so opposed to the United States becoming a socialist country, and the answer is simple. Socialism puts economies in stagflation. The government controls the price of goods and services rather than supply and demand. The government controls your health care, and they control who consumes what and how much they consume. The government controls your life, because the economy is centered around your life. The economy stalls and suffers for a long period of time rather than a cycle of time. You cannot look at our economy year by year. If you do, you’ll see times of great economic growth and times of great economic recession. You must look at our economy from a bird’s eye view to see the success of capitalism on our lives and the health of the country.

Government officials LOVE socialism, because it centralizes the power to the federal level. When you look at socialism around the world, there are some countries off the radar that do fine with it including Canada and Sweden. And then there are countries like North Korea, Venezuela, and Cuba that are all run by dictators with a socialist economy. This is not a coincidence, because dictators must control everything at the federal level, and socialism is the economic philosophy of choice. The fact that we have our government buying stake in privately run United States banks is a scary thing. It’s one step closer to socialism and one step closer to you losing more freedoms as a citizen of this great country.

What can we do? Vote for government officials that run a campaign committed to promoting limited government and capitalism. Capitalism is the philosophy that works. If you take one year and say, “oh, capitalism didn’t work then”, you are ignorant and don’t know what you’re talking about. Capitalism works over a long period of time with periods of highs and lows, because the market corrects itself. Socialism sounds so great, because it promotes economic equality for all and stealing from the rich to give to the poor. But, it doesn’t work, because economic prosperity is not a right. It’s something that you work for, and it shouldn’t be given to you. You should be rewarded for great performance and punished for not working hard and not providing a quality product or service. The government has bailed out AIG and many others for poor decision making when they should be getting punished for the decisions they made.

Think about this over the weekend, and comment about where you stand with your economic philosophy. Before you start cramming down my throat why socialism is the “fair and equal” way to handle the economy, think about what it really means. Think about how it won’t motivate ANYONE to work hard and produce quality goods and service. Because when it comes down to it, we are motivated in the work place to make a profit, and this motivation causes us to be the best we can be and strive to produce goods and services that people want, need, and desire. Related Posts:

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• Show Your Patriotism Tomorrow

Dow Continues To Drop; Government Buys Stake In U.S. Banks is a post from: Money Crashers

The problem with the stock market and investors today is that ONE single piece of news makes investors go crazy. All it takes is one story about unemployment going up, and the market tanks 350 points today. Whatever happened to investors looking at the ACTUAL freakin’ companies that make up the stock market and their strengths/weaknesses. No one cares about the earnings of dow companies, anymore. No one evaluates the health of an industry sector. It bothers me. Why do we let the media and every story, poll, and statistic about the economy severely affect the market.

We’ve become a nation of instant gratification mongers, and it used to show on our stomachs. We must have our food as fast possible. We must have our information as fast as possible. And now, we must invest and make money as fast as possible.

Money Crasher’s Tip for the Day: NO ONE BECOMES RICH OVERNIGHT. Even lottery winners have probably been playing for the past 20 years. It just doesn’t happen.

What are your thoughts about this volatile stock market. Related Posts:

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Seriously, What Is The Deal With the Stock Market is a post from: Money Crashers

Think of all the companies out there that offer luxury brand products and services. These are the companies that will suffer from the economic downturn, because the more we have to spend in gas and food prices, the less money we’ll have to buy brand-named clothing, Apple laptops, Tivo services, and satellite radio subscriptions. I’m not predicting that Apple and XM radio stock are going to plummet. I’m not a financial analyst. The point I’m trying to make is that you shoud focus your investing on companies that aren’t affected as much by consumers with less disposable income.

A great example of a boring company with great long-term growth potential

We all need to brush our teeth, use toilet paper, clean our houses, and wash our clothes no matter how high gas prices are and how low housing prices will be. Proctor & Gamble is a great example of a company that is worth looking at to invest in during slow economic growth. It’s not a sexy company, but it continues to grow and post steady profits.

Do you have any other suggestions of boring companies that perform well no matter how the economy is doing? Share them with us! Related Posts:

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• Update On My UpDown.Com Investments

Investing Tip: Invest in Boring Companies When the Market is Down is a post from: Money Crashers

Their debt to equity ratio was 32!

Debt to equity ratio is basically the liabilities of the company divided by the equity that the firm holds. Anything over 2 is supposed to be considered a high for a d/e ratio, and Stearns was at 32! The problem with all of these large investment firms is that they are a bunch of eggheads that went to famous business schools that taught them to leverage the hell out of their assets. You can argue that every company leverages their debt, but many don’t have a D/E ratio more than 2 or 3.

What this means to you: I am a strong proponent of not encouraging people to leverage their debt or assets. Many people are doing this with credit cards. They are maxing out the 0% credit card and placing the money in an online savings account to earn 3 to 4% interest. The problem is that by the time you consider taxes and the return that risk eats up, it’s not worth playing games with debt. A home equity line of credit is another way of leveraging one of your biggest assets, your home. When you take out a HELOC, that lender is going to become a second lienholder on your home. Don’t add more risk to the roof over your head. You can disagree with me on this one, but just look at Stearns. They took a financial principle taught every day and exploited it. Look where it got them? You may be able to get away with leveraging debt if you are conservative with it, but the problem is that greed rears itself into the equation and before you know it, you’re in over your head.

Bear Stearns invested in an unproven market

Bear Stearns had a lot of cash invested into the subprime mortgage industry. It’s funny because I am sure there were executives and senior analysts in the company that remember the LAST time the subprime mortgage industry crumbled. Subprimes have a place in society. They help people with less than perfect credit become homeowners, but the problem is that it gets exploited by greedy lenders and consumers with eyes bigger than their stomachs get sucked in. But, the fact that Stearns put so much of their assets into hedge funds that invested in the subprime market makes you wonder where the Stearn’s executives were educated. Again, it may have been just a case of greed.

How do you learn from this? Diversification of your investments is the single most important concept when becoming a serious investor. Investing heavily into one company, one industry, or having only one investment strategy is foolish. You are banking on the fact that the one company or industry will always do well, and it will never perform good at all times. You must make your investment portfolio diverse. I always make sure that my investments have an element of international stocks, so when the U.S. market is slow, it still has the chance for Asia and Europe to keep the portfolio strong.

I am guessing that this won’t be the only brokerage firm to go under, because many of them are still employing the same strategies as Bear Stearns. Hopefully, they will learn from the mistakes of Bear Stearns.

Related Posts:

• Destroying Your Debt
• My Take On Home Equity Lines of Credit
• The Real Reason All of These Companies Are Failing
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What We Can Learn From the Bear Stearns Down Fall is a post from: Money Crashers

For those of you that lived during the days of Jimmy Carter, you shouldn’t be worried right now. You saw the highest mortgage interest rates in history, high unemployment, and horrible stock market returns. I just don’t see the big signs that say we’re heading for two years of economic decline. Related Posts:

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Stock Market Rallies In The Afternoon To Post a 300 Point Gain is a post from: Money Crashers