It is a concern that the White House is riding rough-shod over the Chrysler Bankruptcy and appear to be aided and abetted by the bankruptcy process. In this article, “Supreme Court ruling won’t block Chrysler merger” the two court decisions made yesterday are;

“In a late ruling, the Supreme Court ended two days of suspense by turning down a request for a stay of the automaker’s sale filed by a trio of Indiana pension funds and several consumer groups. The decision eliminates any further barrier to the sale, which now could happen as soon as today.

And

“Earlier in the day, the federal judge overseeing Chrysler’s bankruptcy case in New York ruled that Chrysler could proceed with plans to terminate the franchises of 789 of its dealers, effective immediately.”

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Life is a race. If you are a baby boomer you are likely in a race against time to replenish or accumulate enough money for retirement. It is the biggest race of your life and you need to consider it your own personal retirement Olympics.

If you don’t train yourself for your personal retirement Olympics you may lose the race and be destined to living off social security or a small pension for the next 25-30 years.

As with all training it is often better to get a coach. A financial coach is definitely someone you should consider. I came across the web site Financial Mentor owned by Todd R. Tresidder. He makes the distinction between financial advice and a financial coach. His ebook opposite is well worth considering.

“Financial advice focuses on your portfolio by providing specific securities and investment advice. Financial coaching focuses on your education, growth and decision process so that you can independently manage your money smarter and make better informed investment decisions.”

If you want that retirement gold medal you know it won’t come easy unless you train for it. That training should have begun years ago. But even if it did the recent stock market turmoil may have seriously depleted your nest egg.

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There is a big difference between a  “Return on the Dollar” and a “Return of the Dollar“. You need to realise the difference if you are to understand how our retirement nest eggs might perform in the future.

In “normal” times before the government dinosaur ruled the earth, it was all about  return on the dollar. If you invested your money you tries to do it so you would maximise the returns on that investment. You understood there was a chance of a loss on your investment. (Forget about the investment bankers here, they weren’t normal either.

Now the government believes they need to control the economy and protect the public by spending your tax dollars and printing more money to spend in order to prop up the economy.

The hope is they can do this until “we the people” become “we the consumers” and start borrowing and spending again.

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If you are confused about what is happening on the deflation/inflation front join the crowd. I have created two new words to add to the confusion, Indeflation and Deinflation. to help confuse you even further.

Bernanke/Geithner have stated they are more concerned about deflation. In fact Bernanke claims he can inflate the economy anytime he gets in his helicopter and throws money out for us all to spend. Quote from the Special Report on Hyperinflation at the Shadowstats.com web site.

“Attempting to counter concerns of another Great Depression-style deflation, Bernanke explained in his remarks: “I am confident that the Fed would take whatever means necessary to prevent significant deflation in the United States …”

Aside from minor average annual price level declines in 1944 and 1955, the United States has not seen a deflationary period in consumer prices since before World War II. The reason for this is the same as to why there has not been a formal depression since before World War II:”

Mr Volcker solved the 1970’s inflation by killing the economy and then resuscitating it. it worked but I’m not sure at what cost.

It seems deflation is very dangerous if there is a lot of debt around. That’s because the assets to which that debt is attached is decreasing in value and the debt is not.

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I have been reading several forums on stop loss orders and the problems people have with them. Many people abandon stop loss orders in a Bear market after getting kicked out of their stock positions and taking some losses.

Stop Loss orders are easy to understand. One of the rules of investing is don’t invest in anything you do not understand. Another rule is only use strategies to protect your nest egg that you understand. Stop Losses meet that requirement for most people.

If you had purchased stocks at the March lows then you would have had a good run up on the stocks you purchased. It is likely that most of your stops placed at maybe 8% below the stock price are still intact.

With the markets going up 20-30% since March if you timed your entry right you have a profit cushion of 20% or more maybe. So if any stock loses 8% you walk away with a profit from that stock of maybe 12%.

Unless you have a problem giving back some profits this is something you will most likely be able to handle since you did not lose any of your capital.

The problem arises when you don’t time your entry well and the market goes sideways and then down maybe 10% -20%. This is very hard to do at the best of times.

In this case some of your stocks will get stop loss triggers and exit the market for you. You will have a loss on those stocks of around 8% and that will probably be a capital loss too. That hurts.

It is this pain that causes many people to abandon using stop losses. But…. Read the rest of this entry »

I was asked to take a look at the Tip$ter Retirement and Asset Allocation Planner by the creator Eric Cernyar and at first glance it is impressive.

I am assessing this as a Baby Boomer with a view to what it will do to help me as a Baby Boomer get some confidence in my own retirement planning process based on the value of my own nest egg.

(the chart opposite is not my nest egg. I just used $1M for the test)

Eric’s calculator is very comprehensive. I would need to spend much more than an hour or two playing with it to learn all its idiosyncrasies. It’s better to get it out there so you can try it yourselves.

In the short time I have  “played” with it here’s what I like about it.

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