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Sensationalism is everywhere and it's hard to know what's real, anymore. The economy is tanking, the marketing noise is deafening, and you just don't know what tomorrow will hold. This site is dedicated to a no-hype retelling of what's working for me in real estate, business, and life. Welcome.

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Archive for Stock Market


Are You Getting Out of The Market?

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I promised I’d keep you up to date on the stock market insights passed along from my Father who spend a good deal of his time immersed in the financial news of the day.  And there is some heated political commentary here which I don’t apologize for since I think the misguided “fairness” policies of the Obama regime are in large part responsible for a lot of the pessimism in the stock market now.

My parents are so upset that my Dad really shocked me when he told me last night that he was stabilizing his financial position by getting SIGNIFICANTLY out of the stock market, selling shares at a loss, and going into secure assets like cash and treasury bonds.


He suggested that he is concerned that the stock market will continue to do badly for the next 2-5 years or more and that the recession that we’re currently in will turn to a depression shortly.

This might be a good time for you to review one of my most popular posts – What to invest in during a recession.

Given that Ben and I are much earlier in our investing careers and not approaching a retirement horizon as my baby-boomer parents are, he admitted that it might make more sense for Ben and me to not SELL in order to increase our cash position, but to continue to stock pile cash, rather than dollar-cost-averaging into the market as it continues the Obama-fueled free fall.

Assuming the market has another few bad years ahead of it, we don’t need to be in a rush to continue buying in.

Take away lesson – look for security in cash, government bonds, and precious metals.

Inflation and Deflation

Also, he mentioned that we face both inflationary and deflationary risk.

Deflation will come in the short term – this is caused by economic contractions in which people lose their jobs and can not afford to pay as much for things like houses, cars, food, recreation, etc.  Deflation will cause the cost of goods to go down.  This is bad for businesses and people who hold real estate, as the prices they can charge for goods and services will decrease.

Inflation will come over a longer period and Dad thinks it is somewhat inevitable at this point.  Inflation means that the currency loses it’s value and spending power.  Milk used to cost $3 a gallon and now it costs $4.  This erosion of the dollar will massacre baby boomers’ retirement funds.  (This is unfortunate for Obama’s so-called “Investor Class” since it punishes the people who have worked hard and saved and done the responsible thing all their lives…)  Anyway, inflation will be one of the few “tools” that the government has to dig us out of this mess with.

When inflation strikes, leverage can be your friend (the opposite is true during Deflationary economies).

Bottom Line: Cash Now, Buy Later

It’s an ugly time in the US economy right now.  The smart money is on storing up cash until “the bottom” – whenever that might be – and keeping an eye out for a turn around, both in stocks and real estate.

For the stock market, the news today said that we’d know we were close to the bottom when the market didn’t keep having these giant downward slides like it has for the last couple days, and we started to see stronger interest in buying into the market.

The real estate market is a little slower moving and even easier to time the bottoms on.  There’s some great information about knowing when to buy, sell and hold real estate here.


Family Budget Best Bets:  Keep your job, look for extra ways to earn income – such as babysitting, lawn mowing, delivering pizza, starting a business, etc.  Then sock it away!  According to my friends in MLMs, network marketing or “direct selling” as it’s called now, does well during a recession because people are willing to put the time and energy into making a second stream of income during lean times.


Good luck!

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Buyer Beware: Lessons from Ponzi Scheme Billionaire Bernard Madoff

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Aye, Carumba!  Apparently government isn’t the only place there’s graft!  Last Thursday, officials pulled the lid off billionaire money manager Bernard Madoff’s 20-year-old Panzi scheme.

Madoff’s illicit “investment fund” paid an attractive 8-12% return reliably, no matter what the markets did.  That, say investigators, was red flag number one.

My mother and I chatted about this last night and she mentioned a new investment fund opening in our area is probably not enjoying the ripple effect that Madoff’s headlines are having on its investment prospects.  It’s probably tough to be raising money for investments right now.  Not only is the economy in the tank, but investors’ confidence is low in the aftermath of this news.  Fortunately for me, I don’t have any open funding projects at the moment. 😉

In the wake of this giant blow to trusting investors, (a lot of charities invested with Madoff, too), I think it’s worthwhile to take a look at what to do (and not to do) in selecting our own investments.


Watch Out For Sales Triggers That Lead To Social Pressure To Invest

One of the brilliant parts about Madoff’s business plan was how he attracted new investors. Marketing was largely handled through word-of-mouth.  Big-wigs at country clubs and golf clubs would be appointed as ambassadors for the fund.  They would go in, brag about their portfolio’s stellar returns, and build buzz to get people talking.  When listeners would express interest in the investment fund, the ambassador would mysteriously say that the fund was open by invitation only, but he would see if he could “get you in.” 

This was a powerful model because prospects assumed these big-wigs knew more than they did and were more savvy investors.  Also, after the ambassador went through the trouble of “getting you into” the fund, it might seem insulting not to invest, or to ask too many questions.

In fact, Madoff was known to turn away investors who asked the hard questions… thereby discouraging that type of behavior and ensuring the majority of his clients toed the line.


Ask the Tough Questions

It’s so hard in today’s busy world to really ask the tough questions (or even figure out what they are, so we can ask them!) when we’re confronted with an investment opportunity.  Salesmen are highly skilled at pushing our emotional triggers so we make the decisions they want more quickly (and rashly!) than we might otherwise do!

Here are a few indicators that you are getting sold that I’ve picked up:

  1. Where did you meet this person?  Are you in a “sales funnel” right now?  If you are at a seminar event, if you have responded to an ad, or if someone called you on the phone to talk to you about this opportunity, chances are good that you are being sold.
  2. What happens if you don’t buy now?  Are there any “triggers” being employed to encourage you to make a decision?  Common triggers include Time Pressure (you must act before this deadline passes), Social Proof (Testimonials are a common example of this.  Anything that promotes the idea that “everyone” is doing it…), Bundling/Bonusing (“When you act now, you also get…” or “But wait, there’s more!”), and lookout for Upsells – now that you’ve bought this inexpensive product, how about upgrading to something just a little bit better.
  3. What is this person’s business model?  If they have a HUGE profit margin or spend a lot more time converting prospects than delivering products and services, then chances are good that you’re in a sales funnel.
  4. What type of product are you buying?  If it’s something exciting or emotionally charged along the lines of making money, weight loss secrets, a business opportunity, or how to look younger; take a second look.  These types of products are perennial best sellers and have attracted a lot of sales professionals and a lot of over-hyped products.

Know How To Brush-Off Frequently Used Sales Devices

One of the best books I’ve read on this topic of understanding the psychology of sales is: Influence: The Psychology of Persuasion by Robert B. Cialdini.

Cialdini, a professor of Psychology, wrote the book because he wanted to figure out why he was such a “chump” when it came to biting on salesmen’s offers, even for products that he didn’t want. 

In his detailed research covering donating to charities, joining cults, supporting political causes, and of course, buying things… Cialdini, reveals many sales triggers, and how to combat them when we find ourselves as unintentional prospects for a new sales process.

Ironically, this book has become a sales bible for many copywriters and sales professionals who use it as a “how to” guide when they’re working with prospects.

It’s useful no matter what side of the aisle you’re on….

Trust Your Gut

You’ve heard it before, but when something sounds too good to be true, it probably is.  If you are feeling pressure to buy something, or excitement about the buying process, take a moment to calm down and take a deep breath.  Walk away.  If it’s a legitimate offer for a real product or service, it will still be there tomorrow.  Also, talk about it with a spouse or someone else who hasn’t gone through the sales funnel, and see how things sound to someone “on the outside.”

Ask some tough questions… don’t just accept the “illusion” of the success or value of the salesman’s product.  Ask how many of their clients are successful with the product or service.  Ask about their return/refund  and retention/renewal rates.  Ask if the seller actually uses the product.  Ask to talk to real clients, not just the people quoted in the ads… see if you can talk to both satisfied AND UNSATISFIED clients.  I always do this with contractors.  It really gives you a better sense of how folks are conducting their business.

In these days of tight economic times, everyone is trying to be more prudent with their spending.  Likewise, a lot of people are out pitching “make money schemes” and the like, which really don’t pan out upon closer inspection.

If you are a marketer – Please market with integrity.  If you are a shopper, consume with foresight and understanding.


To Prosperity!


Categories : Stock Market
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Ask The Experts – Coming soon…

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I don’t care if you’re right, as long as you agree with me!

Do you prefer to read information that lines up with your own views and reinforces your beliefs, or do you prefer to be exposed to a broad variety of topics of interest, knowing that you may "go ballistic" or "through the roof" when you read something that you disagree with?

According to a recent article in The Economist, newspapers tend to reflect the political perspectives of their readers.  Liberal newspapers are sold in liberal towns, and conservative papers in conservative towns.  Why?  Because apparently that is the most profitable model to pursue.

Although we like to think we’re open-minded, most of us also like to feel as though we are "correct" in our opinions.  Reading information that reinforces our viewpoint can lead us to think, "Yeah, right on sister!" and esteem the author; when, if we’re honest with ourselves, our warm feelings also extend from our own biases being reinforced and acknowledged.

How do you like them apples?

Reading this Economist article a month or so ago got me thinking… I don’t want this blog to be just "The Emily Channel"… I (and I assume you) will get bored of me spouting off just about things that I know and have personally done.

Diversity: Coming Soon To A Theater Near You…

That’s why I’m going to be adding an "Ask the Experts" column.  As often as I decently can, I’ll be harassing the interesting people I come across for an interview – business owners, real estate investors, advisors, and the like – in order to create some diversity of thought and give us something new to think about and discuss.

Love ’em or Hate ’em, at least it will be more interesting.  At least, that’s my hope.

In the meantime, while I look for these experts "in the flesh," I’ll share with you information I have READ about experts, or gleaned in unofficial conversations with them, so as to help create a little extra diversity.

If you would like to be interviewed because you have a business related to what we discuss here – personal finance, retirement planning, real estate investing, small business, etc. – please let me know and I’ll see if we can work you in.

If you have someone in mind that I should interview or profile, please let me know that, too!  I’ll see if I can hunt them down for us all to learn from.



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Americans face uncertainty in deciding where to go next with stocks down, and less money to invest

With bad news on the economy flying around the newsstands, through the airwaves, and across the blogosphere, it’s easy to get frozen by information and paralyzed as we wait for the other shoe to drop.  It’s easy, in times of uncertainty, to rely on behavior modeled by others to help us decide what to do next.

The problem is, as I mentioned in my article on retirement planning last week, "the masses" are uneducated and/or undisciplined in their retirement preparation, and not the people to follow.  When mimicking the behavior of others, it is wise to first ascertain whether your target for emulation is headed in the right direction.

Bank of America Study Reveals Economic Downturn Affects Savings and Retirement Preparedness

In a recent (November 2008) survey of 1000 Americans commissioned by Bank of America, researchers confirmed some common-sense concerns about the impact of the economic recession on our financial behavior.

  • 60% are spending less than they did 3 months ago
  • 51% are saving less than they did 3 months ago.  20% of Americans say they are saving "much less"
  • 23% of respondents say the ‘impact of economic turbulence on their retirement savings’ is the issue that concerns them most.
  • 68% of respondents with a retirement account have not withdrawn funds from their retirement accounts, but 18% have withdrawn funds prematurely, 75% used the funds to pay for credit card bills, mortgage payments and/or to cover income shortages from recent job loss.
  • 43% of Americans anticipate more years in the work force than they did a year ago.
  • 62% of the general public was behind or had not started saving for their retirement, up from 53% in March 2008.
  • 68% have not changed the way they save, invest or manage their retirement investments in the last 3 months.
  • 59% don’t know how much they need to save in order to maintain their current lifestyle in retirement.
  • 47% of retirees believe their retirement savings won’t be enough or are uncertain of whether they will have enough money to cover their financial needs.
  • 42% of Americans do not work with a financial advisor.


What does this data tell us?  Let’s connect the dots…

Spending is down, savings and investments are down, uncertainty is up, and folks’ concern about their preparation for retirement is up.

Let’s take these issues in order.


1) Spending is Down – GOOD! Let’s keep it that way.

Personally, I think it’s good to see people reducing their spending.  A credit-fueled spending blitz has fueled our economy for years.  I viewed this behavior as unsustainable (How many years can you spend more money than you make before your debt comes back to bite you?) and am glad to see it on the wane.  It shows that people are able to effectively tighten their belts and cut back on excesses that are detrimental to the financial health of their families.

I admit that belt-tightening Americans are not good for the economy as a whole.  Overall, the American economy is better off when we all spend freely, but the individual is better off when he spends prudently, saves aggressively, and invests moderately.  This blog is aimed at helping YOU – an individual person – with your retirement goals, it is not aimed at improving the American economy!


2) Savings and Investments are Down – That’s not good, but it may not be the wrong choice.

Americans may have found that they are unable to take advantage of the great investment opportunities in the stock market and real estate market now because they are cash-poor.  Job loss, salary freezes, and reductions of working hours can all contribute to a smaller discretionary spending budget and create a situation in which money previously available for savings and recreational spending must now be redirected toward day-to-day necessities.

When money is tight, reducing or eliminating investment savings programs may be the best choice.

As I explain in my book, you should not be investing if you can not afford to keep your funds in a long-term investment vehicle like stocks or real estate, for at least 5 years.  If you can’t afford to invest, don’t try to force the issue by putting money into retirement plans which you may have to withdraw later at a stiff penalty rate. 

If your budget is uncomfortably tight right now, you may be better off keeping your emergency funds fully-funded and putting your excess savings into savings, money market accounts or short-term CD’s until you know better what the future holds for your family.

The good news, even if you can’t afford to invest now, is that in my estimate, we’ll continue to see good buys in the real estate and stock market for a while yet.  My concerns, though, are that the current financial turmoil is highlighting a problem we need to address, and we’re not taking the hint by changing our behavior.  The problem being – our lifestyles are too expensive relative to our income levels.  We need to trim the fat during lean times, but good times or bad – our budgets should still allow room for savings and investment.

If you find yourself suffering from a temporary income reduction, it’s OK to stop saving for a little while.  But consider the long-term ramifications on your retirement plan if you stop spending altogether for a period of years or months.  If you are in a situation where you are so cash-poor that you may not be able to save for years, it’s time to consider a serious lifestyle change so that you can begin to put 10-20% of your income into savings for retirement on a regular basis.

If a drastic change is needed in order to this – say, starting a business, getting a second job, selling your house, or finding another way to slash costs – NOW may be the time to implement this approach.  Why wait a year or two to "see if things get better?"  You can be ahead of the game if you start now.


3) Uncertainty is Up – Is it safe to move, yet?

When people get uncertain, scared and worried what happens?  They get scared of making a mistake, so they do nothing.  They hole up and wait out the storm – waiting to make a move until it’s "safe" to do so again.  That’s why, when the stock market is up, everyone jumps on board because it looks like a safe investment; and when the stock market is down, everyone bails out because they’re afraid it’s not safe.

In this case, fortune favors the bold.  People who are willing to get educated, and make moves even in the face of uncertainty can often face rich rewards.

If you’re not afraid to do so, and you have the money to spare in your budget, consider this a great buying opportunity in both real estate and the stock market.  Warren Buffet is. 

The stock market tends to over-react and can underprice itself when people feel bearish.  The stock market is very emotional.  Step away from your emotions, and use your head.  Look at the numbers and see where the good buys are.

Real estate is a slow-moving beast.  With foreclosures up, there are lots of banks doing short sales and selling REO’s.  However, no one wants to buy in a falling market and see their newly-purchased real estate continue to drop in value.  To enter the market, start looking for smart deals that represent a discount off of the current market value.  (If you buy a house at 80% of market value, the market can drop 20% before you’ve really "lost" anything.)  Negotiate hard, and look for properties that cash flow, so you can afford to hang on in the face of a slow recovery.


4) Anxiety about lack of preparation for retirement is high.

Well, this one is not surprising.  Of course people feel less prepared for retirement when the value of their retirement assets drops 20% in a matter of months.  They ARE less prepared, and for those near their retirement time horizon, or worse, those who have retired in the last five years, the effects of the recent market downtown are even more pronounced.

The youngsters who have years until they retire should be jumping up and down, excited about the buying opportunity that has been presented early in their investment career.  We 20-somethings should be stocking up on stocks now, in my opinion!

For the folks who are closer to retirement, the only remedy is increasing their level of savings to make up for the losses suffered in their portfolios.  They’ll also want to consider re-balancing their portfolio’s to make sure their level of risk and liquidity meets their current financial needs.  (E.G. Too many stocks/mutual funds makes a portfolio more volatile, and folks who are unable to afford this volatility should reduce their exposure to stocks.)

Consider professional help

42% of us are not working with a financial advisor and 59% don’t even know how much we’ll need to retire.  I think everyone’s philosophy must be "I’ll just save as much as I can, and hope that it’s enough, when the time comes."

Anyone who’s studied goal-setting probably would advise against this strategy as the best way to prepare for a successful retirement?

With longer life expectancies now, why aren’t we spending more time preparing for an active retirement?

What’s the psychology or life circumstance that’s stopping us from doing what we should?

Are people afraid to go to a professional advisor for fee of bad advice?  High costs/fees?  Getting a sales pitch?  Do we think we can do it better ourselves?

I admit that I don’t use a professional advisor because I’ve spent hours reading, talking to people, running numbers and otherwise educating myself on personal finance.  I keep tabs on my numbers and am confident of where I’m going.  How do you feel about your situation?  I really want to know!


I was reading an article yesterday by a financial advisor for financial advisors.  The author, Evan Cooper, mentioned a recent teleconference he had hosted in which he reminded his 1,000+ listeners of something I had always known, but which came across as frightening when he described it…

He succinctly defined the changing state of retirement plans in America:  Institutionally-managed defined benefit plans (like the golden parachutes the Big 3 car companies in Detroit seem to have been roped into supplying for all of their employees) are going the way of the Dodo bird, and Americans are now banking their retirement on the performance of their defined contribution plans, like 401(k)’s and IRA’s.  The problem is, that EXPERTS are no longer managing the money, WE are managing our money.  And many regular Americans have NO IDEA how to go about this.  They have not been trained or educated to build their wealth through their retirement plan, and they don’t seem to recognize the necessity – the gravity – of getting this taken care of now.

That’s the part that scared me.  There are a bunch of us out there who are banking our future wealth and lifestyle as retirees on something we may not be good at doing.

We Don’t Know What We’re Doing, And Our Future Depends On It

The statistics clearly show that we, as a country, are pretty poor at delaying gratification for future benefit. 

We don’t exercise as much as we should.  We eat things that are bad for us.  We don’t floss regularly or go to the dentist every six months.  We don’t save money… heck, we’re learning that one the hard way at the moment as our national economic crisis proves.

The problem is, just as we are suffering as a nation from over-use of credit, we’ll soon be suffering from under-use of savings and investment plans.  As the number of retirees with defined benefit retirement programs decreases and employees who’ve been depending on defined contribution plans begin retiring, we may see a massive shift in the income level of retired seniors.

The point of Evan Cooper’s article, which I mentioned above, was to alert financial planners to the tremendous opportunity that lies before them. 

Now that workers are solely responsible for their own retirement plans, many may need the services of a financial planner more than ever to help them navigate the world of IRAs, 401(k)’s, Roth IRA’s and related investment opportunities.

Does this apply to you?

The proof is in the pudding – have you been managing your retirement assets correctly?  Do you know you’re on track for your own retirement?  If not – take heed – learn how to change your behavior or hire someone to help you change – otherwise the price will be dire as your earned income tapers off in your retirement years.

Can you find a good financial planner, yourself?

Even if you’ve decided to go with a professional, hiring a financial planner is no easy task. 

The field is muddled considerably by salesmen who get paid every time you buy something, be it a stock, mutual fund, annuity or insurance policy and whose own best interest (selling their products and creating trading activity) are often in direct conflict with your best interest (buying the best, low-cost products and holding on to them for long periods of time). 

As you search for a place to invest, you may also find a number of fund managers who will manage your money for a percentage of your portfolio’s value.  This can be a good business model, but often the "hot" managers one year are stone cold the next, so look for funds and investments that have a long track record of performance.

Don’t be afraid to ask potential advisors how they get paid.  If you just need a little advise or a financial check-up, I would talk to a flat-fee (charge by the hour) financial advisor who can objectively review your portfolio and does not have an incentive to steer you in a certain direction (toward products he sells).

Personally, rather than trying to "beat" the market, I try to "own" the market and invest through’s low-cost mutual funds.  I highly recommend starting your investment plan with them.  They are low cost, low-minimums, fully online and have a great web site with a lot of informative articles to help you understand the basics of putting together an investment strategy.

The Important Thing is To Do Something

At the end of the day, you just need to make sure that you’re addressing the issue of preparing for your retirement, rather than burying your head in the sand when it comes to looking at your personal finances.  When it comes to retirement planning, TIME is an equal or greater tool than EARNINGS, so even if you don’t earn much now and can’t save a lot, it’s still a good idea to save something to put away for your future.  My best advice: Start NOW.

Contributing money to an IRA – Roth or Traditional – is a great place to start.  I like the ROTH for younger people and those who expect to be in a higher tax bracket when they retire than they are now.  If you need help running the numbers on which retirement program to choose, drop me a line and I’ll see if I can help.

Maxing out your Roth IRA each year is a good goal to shoot for.  I wouldn’t necessarily suggest that your ROTH be your only retirement vehicle, but if you can’t save much to start with, it’s probably one of the best place to set aside money to put into investments.  (The other best place is your 401(k) at work, if you get an employer match).  The nice thing about a ROTH, rather than a 401(k) is that you have complete discretion about where to invest your Roth, and usually the investment choices through your employer’s plan are more limited.

It All Comes Down To You

At the end of the day, planning for a successful retirement comes down to you and your commitment to doing something now to take care of yourself (and your family/spouse) down the line.  You can learn about it, read about it, hire someone to tell you about it, but you have to make a change and set up a regular savings and investment program in order to start seeing results.   Let the historically low stock market prices we’re seeing today be an incentive – a motivation – to get into the market at a great time and prepare for some great returns down the road.

So – how ARE you doing?

Let me know how you’re doing with your investments… are you falling behind with your retirement savings due to the slackening in the economy?  Are you building up your cash reserves to insure against job loss?  Are you BUYING MORE right now since stock is ON SALE CHEAP?

Tell me how these economic times are affecting your retirement plans and let me know how I can help you refine your strategy to meet your goals!

Yours In Prosperity!



About Emily Cressey

Emily Cressey is a real estate investor and licensed real estate agent living in Seattle, Washington. After graduating Phi Beta Kappa with an Economics degree from UNC-Chapel Hill (Go Tarheels!) her focus has been on building business for cash flow and investing in real estate for wealth. If you have questions about real estate investing, personal finance, or would like some flat-rate, affordable advice on one of these topics. Please fill in the Contact form.