Asset Allocation Made Easy

As a DIY investor without a broker, I have been looking around (for a while now) trying to find a tool that will help me allocate my investments in different asset classes and help me rebalance them occasionally. As I will probably elaborate on in an upcoming post, I haven't really been happy with any of the tools that I've tried so far. The tools have either been too simplistic, way too complicated, or the numbers just don't seem to add up. I should note that I have been trying out free tools, when I probably just should have broke down and pay for some advice.

Today I came across the marketriders.com website. The site offers advice on asset allocations in a few flavors. In its most basic form you can pay a $9.99/mo fee for automated advice by answering questions about your time horizons, appetite for risk and age. If you prefer, for $399 you can talk to an advisor who will walk you through things. Or, if you need more help yet you can move your portfolio over the Market Riders and pay them a .50% commission. The company has based its philosophy on the idea that if you get your money in a low cost investment (preferably an ETF that tracks an index) and have the right allocation there's really no need for an expensive broker. They seem genuine when they say they really prefer if people do the investing themselves and don't hire them as their planners. They even impose a requirement that you fire them each year and decide if you want to rehire them.

I think its a good concept. I haven't tried their service out yet, but since they offer a free 30 day trial I will be soon and will post a full review at that time. Market Riders apparently has a database that has over 700 ETF's and provides users with a sample portfolio of ETF's to meet their respective allocation. Why ETF's? Because as counter-intuitive as it may sound, they generally beat the experts. The company also monitors the performance of the investments and will send you an email when it is cost effective to rebalance things. In this sort of market that could prove to be some valuable advice.

Does anyone have experience with Market Riders? I like the concept a lot, we'll see how the model plays out in the service itself. I will report back once I have a chance to kick the tires. I wish them the best, it's about time there was some solid unbiased advice at a fair price.

Link: MarketRiders.com

Image Credit: The New Fine Art's Lab @ Flickr

Hedge Fund Advisor Must House the Homeless to Build Mansion

The WSJ has a blog post that tells the story of a hedge fund advisor in England who was told he needed to house the homeless in exchange for the ability to rehab his home and add a pool. His total bill... $730,000. This sort of thing wouldn't fly in the U.S., but as the WSJ notes, apparently it's fairly common place across the pond before commercial projects break ground. Read the full story here.

Guy Steals $20k in Stamps... To Pay Mortgage

The title pretty much says it all. This is one of the stranger and dumber things I've heard in a long time. Apparently a guy in Michigan stole $20,000.00 in stamps and was selling them on eBay to pay his mortgage. The man was a 42 year old postal employee and as you can expect is in a whole lot of trouble right now. I guess it beats a second job.

Read the whole article at CNN.

Free Up Some Time with a Virtual Assistant

One of the great things about the internet is that it removes a lot of the barriers that people face every day. No pesky brick and mortar store fronts to eat up overhead expenses, telecommuting reduces the need for office space substantially, and email and VoIP help keep people connected. With companies downsizing you might find yourself forced to do more with less and being squeezed to work longer hours. Or, maybe you own a business and are feeling maxed out. You might be able to get some cut rate freelance help whether you need it for a day or the next year. I haven't used any of the sites below, but I'm kicking around the idea of trying them out as projects present themselves or to give this site a face lift. In no particular order, here are some of the personal assistant/freelance websites that I've come across recently.

1. AskSunday.com

This site offers virtual personal assistants. Their website says that the most commonly requested services include: appointment scheduling, data entry, gathering information from the web and research, making telephone calls, booking travelnand ordering flowers or gifts. Pricing isn't available on the website, but new users can get a free week of service for signing up.

2. RedButler.com

This site offers similar services to asksunday.com with the addition of some membership rewards. The service starts at $36.95 for 15 requests / mo. and increases from there. Again, the site seems to specialize in the mundane repetitive tasks that often chew up a lot of time.

3. Elance.com

Elance more of a full-scale freelance site. Rather than outsourcing your projects to the company itself, Elance acts like more of a matchmaking service. Elance helps you match up people with projects and professionals who have the skills you are looking for. Professionals can then bid on the projects. At Elance you can hire IT professionals, lawyers, writers or finance specialists. Elance allows individuals to post opportunities for bid or search providers and contact them directly after reviewing their portfolios. I am considering using Elance to find someone to give this site a face lift, because my design skills leave something to be desired. If anyone has suggestions I'd be interested to year your experiences.

Has anyone used these sites? Are there better ones out there? Please let me know and I will post updates with any I receive. I will also update the site after I try them out myself.

Image Credit: vargklo @ Flickr

So Why Should We Bail Out Homeowners?

I am going to take a second to pose the question that I have been thinking over the past few weeks with regard to the proposed bail out of homeowners who now owe more than their home is worth. I understand that it's politically popular to help out people who might lose their homes, but to that I reply -- so what? It happens. At the risk of sounding heartless, I'll explain my position.

1) You should have bought your home to LIVE IN.

So if you did, then it shouldn't matter if you now can't sell it for more than you owe. It's called a paper loss. By the time you sell the house it might be worth more. That happens over the course of a 15 or 30 year mortgage. The bank isn't going to call its loan unless you stop paying, plain and simple.

2) You probably more than you could afford.

I acknowledge that bad luck befalls some people who have medical problems or other situations that arise unforeseen. If your gross income is $3,600 / mo and your mortgage is $3,500 a month, you weren't meant to be in that house in the first place.

3) The bank has the right to take your house if you don't pay.

When you sign a note and mortgage at a bank and close on the purchase of a home title passes to you from the previous owner. If you read the documents carefully, you should have realized that you granted the lender (and whoever the lender sells your mortgage to) a security interest in the property. This means you told them they could take the property if you don't pay. That security interest is also probably the ONLY reason a bank was willing to loan you money, because the bank knew it could get something if you decided to default on your loan.

4) Consumer protection laws are already stacked in the homeowner's favor.

When someone gets foreclosed on it is not a surprise. The process goes a little like this in most US jurisdictions. First, you get written notice that you haven't been paying your bills (which you should already be aware of). Second, the bank has to initiate a legal action which costs money and takes time (again the home owner is notified). Third, the legal action is completed and the house goes to sheriff's sale (again notices given to owner). Fourth, the sheriff's sale takes place after notices are posted and/or published in the paper. Fifth, the sale takes place. Sixth, the sale is "confirmed" by the judge (after notice to the owner). There is generally also a redemption period somewhere in that mix allowing the owner to catch up on any late payments. The whole process can take up to a year and this whole time the home "owner" is living there paying no rent, making no payments to the bank, and generally trashing the place.

5) Owning a home is not a right.

Take a look at the bill of rights, then read up on what they actually mean. People who claim that taking away a home (which they granted the bank an interest in and after they stop paying) is a violation of their rights, are like the people who you see on COPS screaming that the police are violating their Miranda rights (note: they don't apply until you are actually arrested). They don't quite get it.