Family Finance - FiLife

Is Your Bond Fund at Risk? Rising Interest Rates Could Wreak Havoc

Fri, 20 Nov 2009 14:22:40 -0500

Itâs been difficult to miss the stock marketâs spectacular rally from the lows of last March. But did you know many sectors of the bond market have also staged impressive returns in 2009?

According to research firm Morningstar, mutual funds that invest in high yield bonds are up 41% year-to-date through November 9. Emerging markets bond funds have soared 31%. As with stocks this year, the riskiest types of bonds have logged the biggest gains.

If youâre tempted to jump on the bond market bandwagon, however, now may be a particularly risky time to commit new money to bond funds. With interest rates currently at historically low levels, the Federal Open Markets Committee will likely raise short-term interest rates when the economy starts to improve. That usually causes long-term interest rates to rise as well. And when interest rates rise, bond prices fall. Thatâs bad news for bond fund investors, who will most likely see the net asset value of their shares decline in response to rising interest rates.

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Diamonds: An Investor's Best Friend?

Fri, 20 Nov 2009 00:11:00 -0500

Several diamond investment funds were launched this year given the growing demand for tangible assets.

They are rare, beautiful, valuable and a girl's best friend but traditionally diamonds haven't really been considered an asset class in their own right.

Diamonds do not have the "safe haven" status of gold, and their prices are more volatile than the precious metal. While spot gold has gained around 25% in value this year, diamond prices have fallen by at least 10%, in line with the poor performance of the luxury industry, according to U.S.-based IDEX Online Diamond Prices, which tracks global asking prices for polished diamonds.

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Make sure you and your agent agree on home's worth

Fri, 20 Nov 2009 00:11:00 -0500

Lew Sichelman answers reader questions about realty brokers and refinancing a home.

WASHINGTON (MarketWatch) -- Question: I have a question regarding realty brokers. My husband and I signed a contract to list our home for six months, and so far it's been one month of pure hell. Luckily, everyone who has visited our home has put in a bid on it. But rather than fight for us during the bidding process, this woman will argue with us at every turn. We're not talking $2,000 or $3,000 here; we're talking tens of thousands that she wants us to come down. The most we've come down so far is $19,000.

We have a very nice home and people have told us that it is priced right, and the comps we've seen testify to this. However, the would-be buyers out there are simply looking for giveaways by desperate people, which we are not. We have tried to pull our listing with this broker but we are told we're locked in for the full six months. We've used agents before and have never had this type of "war" going on. We believe the agent simply wants to sell our home at any price to close and get her commission. We've made a big mistake to choose her. Please warn your readers that the shortest term contract is the way to go until you know who you're dealing with. You can always get an extension. Is there anything we can do? We appreciate your advice. Marie.

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How to Escape the Rat Race

Thu, 19 Nov 2009 20:11:00 -0500

How much money would you need to leave your current job?

How much money do you actually need to take this job and shove it?

Go on, admit it: You've thought about it. Maybe you've imagined quitting your job and easing into early or semi-retirement -- or starting your own business.

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No easy cure for doctor shortage

Thu, 19 Nov 2009 18:11:00 -0500

SAN FRANCISCO (MarketWatch) -- It's a phrase people are loath to hear when they're looking for a new primary-care doctor: Not accepting new patients.

Some parts of the country already lack an ample supply of general internists, pediatricians and family physicians, forcing patients to drive further or wait longer for care. If a comprehensive health-reform bill passes and extends coverage to millions of uninsured Americans, many are asking if there will be enough primary-care doctors to handle the increased demand for medical services. "I think we'll see some effect like Massachusetts did, but I'm not expecting there will be chaos," said Lori Heim, president of the American Academy of Family Physicians and a family physician at Scotland Memorial Hospital in Laurinburg, N.C.

Heim was referring to the statewide health-insurance overhaul Massachusetts began phasing in in 2006, which provides a test-case example. It succeeded in dramatically lowering the state's uninsured rate to 2.7%, by far the lowest in the nation, but also exacerbated access problems in areas that already had primary-care shortages.

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Who's in Charge? At Mutual Funds, It Matters

Thu, 19 Nov 2009 17:11:00 -0500

Changes in managers at mutual funds is important news that usually goes unnoticed.

The record of a manager that is new to a mutual fund is as important for investors as the fund's performance.

In 2007, 397 U.S. open-end mutual funds experienced manager changes, according to investment-research firm Morningstar Inc. Last year, the number was 391, and 273 funds have changed hands so far this year, said Morningstar. That doesn't include funds that had a longstanding manager and added a co-manager. There are currently 6,709 U.S. open-end mutual funds, according to Morningstar.

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More States Jump on Tax-Amnesty Bandwagon

Thu, 19 Nov 2009 00:11:00 -0500

Some states in dire financial straits are offering short-term amnesty deals to collect back taxes from people.

Many people who owe back taxes in their home states will soon have a chance to get right with the tax man and avoid penalties that usually go with doing that.

States in dire need of revenue have jumped on a bandwagon to collect taxes through short-term amnesty deals, luring people with the promise of leniency. This year, 12 states had amnesties, up from the annual average of two or three. Another 10 or 15 are likely to follow suit in 2010.

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Calling Food Hotlines

Thu, 19 Nov 2009 00:11:00 -0500

Peter King tests the hotline numbers on popular food items to get the full nutritional information.

Starved for answers about what's in that packaged lunch you put in your child's backpack this morning? Wondering if you should throw out that chicken breast you thawed in the refrigerator but forgot to cook? Here's some food for thought: Your food's packaging may help you get the answers to your questions.

Major food companies include telephone numbers on their packages for consumers to call when they have questions about a product. We called the customer-service numbers from four big food companies in the U.S. We asked questions about food safety, ingredients and cooking instructions for four selected products.

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The Million-Dollar Penny

Thu, 19 Nov 2009 00:11:00 -0500

When is a penny worth a million dollars?

When it's a 1795 reeded-edge U.S. penny, one of only seven known to exist. It recently sold for nearly $1.3 million at auction — the first time a one-cent coin has cracked the million-dollar price barrier.

It follows the sale earlier this year of a high-end collection of rare half-dollars that fetched $1.1 million at auction. At the same time, popular $20 U.S. Saint-Gaudens gold pieces from the early 20th century are commanding $1,700 apiece, sight unseen, in decent, though not perfect condition, topping a record high last seen more than two decades ago.

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Choosing the Right Medicare Plan

Thu, 19 Nov 2009 00:11:00 -0500

In past years, most older people just stuck with their existing Medicare drug plan or Medicare Advantage plan during open enrollment, avoiding the dizzying experience of choosing a new one. In the latest annual enrollment period, which began this week, they might want to think again.

Many people with Medicare Advantage plans may have no choice but to seek out a new option. That's because insurers including UnitedHealth Group Inc. and WellCare Health Plans Inc. are eliminating a number of their plans in response to government cutbacks and new requirements. If the 667,000 enrollees affected by the cancellations don't select a new plan by Dec. 31, they will be placed automatically in traditional Medicare. They also have until Jan. 31 to select a drug plan, or risk losing drug coverage in 2010.

Changes also are in store for Medicare Part D prescription-drug plans. The average monthly premium will rise 12% next year to $38.91, according to an analysis of Medicare data by consulting firm Avalere Health LLC. Many insurers also are raising the amount beneficiaries must pay for generic drugs — up an average of 16% to $6.72 for most plans. And a number of plans are requiring patients to pay a percentage of other drug costs, known as a co-insurance payment, instead of making a flat copayment for these medications.

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