04/09/2008

Let's see, so far this week we've seen record gasoline prices; poor corporate earnings; high-profile downgrades; more investment bank writedowns; an IMF prediction of recessions, and of course, a whole lot of red on Wall Street's trading screens.

Oh, did I mention that all of this has happened just in the past few days?

My point here is that we are by no means out of the woods when it comes to running away from this bear market. Yes, there will be big up days like the one we saw on April 1, but for every big day like that, there likely will be a bevy of days filled with a lot of bad news and a lot of red trading screens.

Keeping Up With The Hiltons

"In today's world, everybody wants to be a star. And many people will do whatever it takes to feel like a star. We all want (no, we need) the big house, the nice car, the augmented body parts, the purse dog, the adopted Third World kids…"

Wow, what a great quote from an article by Charlie Mangano of Minyanville.com.

In this humorous and insightful piece, Mangano talks about how people feel the need to always keep up with the Joneses -- or in this case, keep up with the Hiltons -- by spending money they don't have.

To achieve a star-status lifestyle, many people go into way too much debt. Often, this debt is achieved at the expense of things like savings and investments. Unfortunately, I see this everyday where I live in Southern California.

My feeling is that if you can afford luxuries, by all means go for it. But if you have to go into major debt to look stylish, then you are just a wealthy wannabe with poor fiscal judgment.

Now, if what I just said hits too close to home, I recommend you smarten up and start making better decisions. Only you can take charge of how you use your money, so please start doing it wisely.

To read Mangano's piece in its entirety, click here.

ETF Talk: Providing For The Common Defense

I absolutely love exchange-traded funds (ETFs), and I use them almost exclusively in my own investment portfolio. This week, I am going to provide you with a quick reference guide to help you instantly learn the ins and outs of several key ETF providers. If you have an IRA of any kind or a regular taxable trading account, you have access to ETFs, and you should definitely take advantage of that access.

The following ETF providers are responsible for the diverse universe of offerings that have emerged since ETFs originated in 1993. As you'll see, no two ETF providers are the same. To see a full list of the ETF distributors, please reference the table below.

One of the most popular ETF providers is iShares. This company offers more than 130 niche-oriented, exchange-traded funds. And, iShares also is the largest ETF provider in the world. The iShares ETFs are managed by Barclays Global Fund Advisors and collectively are designed to replicate the performance of more than 130 different indexes in sectors that range from health care to energy.

Similar to iShares, PowerShares has become a forerunner among ETF providers. Each ETF focuses on a particular investment style, currency, specialty, industry, commodity or broad market. PowerShares provides investment advisors with asset management tools and market exposure through the replication of enhanced indexes.

The 58 ETFs currently in the ProShares fund family are somewhat unique in that they allow you to execute sophisticated strategies, such as shorting or magnifying your exposure to major indexes. ProShares is the first company to offer short and leveraged funds. This innovation is important, since investors previously could not trade short or leveraged in most retirement accounts.

State Street Global Advisors, possibly the world's largest institutional asset manager, launched the first ETF, the S&P 500 SPDR (SPY), in 1993. SPY was created to represent the price and yield performance, before fees and taxes, of the S&P 500 Index. This company is the true pioneer in the industry, and it paved the way for other ETF providers to enter the business.
The fast-growing universe of ETFs offers a wealth of opportunities to investors. An old saying on Wall Street is, "There's always a bull market somewhere." ETFs make it easy for you to profit from bull markets, no matter where they are. Market sectors often deliver performance that is well beyond that of the overall market. Wisely selected ETFs have the potential to reward smart investors with big returns, while buy-and-hold mutual fund investors languish in subpar performance.

I want you investing for success, and that's just what ETFs can help you to achieve.
Here's to those ETF providers who're providing for the common defense of your wealth!

Risk Management: A Primer 3

Do you know the six threats to your retirement nest egg?

In my experience, most investors are woefully unaware of what could happen to the most important money they manage -- the money that will fund their retirement years.

In a new special report by Fabian Wealth Strategies, a fee-only investment advisory firm specializing in ETFs, I will tell you how to manage the following risks to your nest egg:

Risk #1: Faulty Investment Advice

Risk #2: The Bear Market Cycle

Risk #3: High Yield Equals High Risk

Risk #4: A Catastrophic Loss

Risk #5: Mutual Funds

Risk #6: Unnecessary Fees and Expenses

More importantly, this FREE report will show you what you can do about these threats.

For your copy of this report, titled The Successful Investor's Guide to Managing Risk, simply click here.

The only thing you have to gain is the financial life you desire.

Time For A 401(k) Makeover?

This market is still in bear mode, so why not get a handle on your most important money now, before the next bull market run?

I say right now is as good a time as any to treat yourself to a 401(k) makeover.

Here are a few simple steps to manage your 401(k) in a bear market. This advice holds true for virtually every investor, including those very aggressive types itching to go all in.

1) Know your current equity allocation

I know it sounds simple, but just being aware of how much exposure you have to equities is the first step in your new 401(k) look.

2) Know your "safe harbor" choices.

In this market, you must be aware of the money market account options you have, and the short- and long-term Treasury bond funds you own. These are great safe harbor choices for your money when market seas get really choppy.

3) Don't have too much international exposure.

We've seen a big pullback in international equities, and this trend could continue for some time. Reduce your exposure to international equities until things settle down.

4) Reduce your overall exposure to equities.

Hey, there is nothing wrong with having a heavy cash position right now. By doing so, you won't lose money, and you won't be subjecting your capital to any sharp downturns. When the market stabilizes, you'll be ready to rock and roll.

Want more tips on how to manage your 401(k) assets? Then you need my Successful Investing advisory service. Our 401(k) allocations have sidestepped the bear's claws since the beginning of 2008, and thus we've eluded any damage to our portfolio.

Find out how you can get your detailed 401(k) makeover with Successful Investing by clicking here.

Listen To A FREE Replay Of Doug's Retirement Income Conference Call 2

Are you prepared to live out your retirement for 25-30 years? How will you generate the income you need from your retirement plans and real estate? How will you stay ahead of inflation and maintain your standard of living?

These are important questions, and Doug Fabian can help you to answer them all.

Retirement income investing is a whole new ball game. It's about the proper asset mix; the right investment products, and the right income investing strategies. Most people are comfortable with growth investing by the time they've reached retirement, but they are not prepared to make the most important decisions of their lives -- the decisions that will help them generate retirement income.

To help investors get on the proper path to reaching their retirement goals, Doug recently hosted a conference call to share his views on how to generate the income you need from the assets you've worked so hard to accumulate.

Now you can listen to a FREE replay of Doug's first conference call. The call was a huge success, and now you can listen to it anytime you like, absolutely FREE.

Blogs Away: A Fabian Aural & Visual Fixation

Want to hear my latest rant about the state of the financial markets? Well, now listening, and even watching, is as easy as a mouse click.

To listen to the audio blog, simply click here.

Not satisfied by just listening? Would you rather watch me on YouTube?

Well, now you can.

Just click here for your Fabian aural -- and now visual fixation.

Wisdom From "The Boss"

Roll down the window
And let the wind blow back your hair
Well the night's busting open
These two lanes will take us anywhere…

—Bruce Springsteen, Thunder Road

I had the great pleasure of attending the Bruce Springsteen concert last night, and let me tell you, that man ROCKS! What a tremendous performer. The intensity from "The Boss" is virtually unmatched in music today, and he's a man at the pinnacle of his craft. We should all aspire to be so accomplished in whatever we choose in life, and for his great achievement, Springsteen serves as a role model for excellence. Thanks Bruce, from a true fan.