The Kiplinger Mutual Fund Screener

Posted on June 18, 2014 by Melissa Hart

A mutual fund screener that is free and easy to use!

To use the mutual fund screener:

http://kiplinger.com/tool/investing/T041-S001-mutual-fund-finder/index.php

  1. Students begin by using a pull-down menu to select the type of fund they want (any fund, U.S. stock funds, international stock funds, taxable bond funds, or municipal bond funds).
  2. They refine their choice by choosing a fund style (large cap, emerging markets, high yield bond, etc.)
  3. Next, students select performance and fee and management criteria, (total return for different time periods, risk, load charges, if any, expense ratio, etc).
  4. The last step is to click the “Find Fund” button at the bottom of the screen.

Teaching Suggestions

You may want to use the information in this blog post to:

  • Help students realize that a fund screener can be a logical first step in finding the right fund for their investment portfolio.
  • Demonstrate how the Kiplinger Mutual Fund Screener works or create a homework assignment where students use the Kiplinger Mutual Fund Screener.
  • Remind students that while a fund screener can identify funds that meet the investment criteria they have provided, there is a very real need to complete a more in-depth evaluation before investing their money.

Discussion Questions

1. What are the benefits of using the Kiplinger Mutual Fund Screener?

2. In addition to the information provided by the Kiplinger Mutual Fund Screener, what other types of information would you want before investing your money? Where would you obtain this information?

Categories: Chapter_13, Mutual Funds | Tags: , | Leave a comment

Apple and Google Show that Stock Splits Are Cool Again

Posted on June 14, 2014 by Melissa Hart

Now that Apple and Google split their stock, expect the thin pool of high-priced stocks to follow suit.

Can a stock’s price be “too high?” Good question. When Google split its stock in 2014, the share price had broken through the $1,000 ceiling. After a 2-for-1 stock split, Google’s price per share dropped and left only four stocks trading for more than $1,000 a share.

Most companies split their stock to lower the share price which will “hopefully” make their stock more attractive to investors. In reality, many investors prefer to buy 100 shares of a $20 stock rather than buy 20 shares of a $100 stock. These same investors believe a stock has more potential for a dollar increase if the share price is lower rather than higher.

This article also points out a basic reason why investors don’t profit from the actual stock split. If an investor, for example, owned 100 shares of Apple stock priced at $630 on the day before the recent 7-for-1 split, the investor would own 700 shares of stock after the split, but the price drops to $90 per share. A $63,000 investment before the split is still worth $63,000 after the split.

For more information go to

http://www.dailyfinance.com/2014/04/29/apple-google-stock-splits-cool-again/

Teaching Suggestions

You may want to use the information in this blog post and the original article to:

  • Discuss why companies split their stock.
  • Explain the effect of a stock split on a company’s market capitalization. (Market capitalization = a company’s share price x the number of shares outstanding.)

Discussion Questions

1. Why do corporations split their stock?

2. Once a company’s stock does split, the price may increase or decrease in value. After the 7-for-1 stock split, what happened to the share price of Apple stock?

3. Besides “possible” increase in value caused by a stock split, what other factors account for an increase or decrease in a company’s stock price?

Categories: Chapter_12, Investments, Stocks | Tags: , , | Leave a comment

How Healthy is Your Insurance Company?

Posted on June 11, 2014 by Melissa Hart

When buying home, health, auto or rental insurance, you should find out if your state insurance department offers any information about insurance companies and rates.  Check several sources for the best rate and get quotes online.  Consult an independent insurance agent who represents several insurers in your area to get a better deal.

 Before purchasing insurance, be sure the insurance company is licensed and covered by the state’s guaranty fund.  The fund pays claims if the company defaults.  Your state insurance department can provide this information.

Research the complaint record of the company.  Contact your state insurance department, or visit the website of the National Association of Insurance Commissioners (www.naic.org), which maintains a database of complaints filed with state regulators.  Finally check the financial stability of the insurance company.

For additional information and guidance visit the following websites:

http://www.ambest.com, http://www.standardandpoors.com, and http://www.moodys.com

Discussion Questions

  1. Why is it important to contact state insurance department before purchasing insurance?
  2. How can an independent insurance agent provide a better insurance rate?
  3. Why is an insurance company’s financial stability important?

Teaching Suggestions

You may want to use the information in this blog post and the websites to

*  Have students visit the various websites in this blog and then prepare a short summary of their findings.

*  explore a few advantages of purchasing insurance from an independent insurance agent?

Categories: Chapter 8, Chapter 9, Chapter_10, Home Insurance, insurance | Tags: , , | Leave a comment

Reduce Auto Insurance Costs

Posted on June 7, 2014 by Melissa Hart

Auto insurance requirements vary from state to state.  Check with your state insurance regulator to learn more about individual requirements as well as insurers you may be considering for the insurance policy.

To get the best coverage at the best price, get several quotes from insurance companies; it may save you hundreds of dollars every year.  What can you do to reduce your insurance premiums?

Raise your deductible on collision and comprehensive coverage.  If you own an older car, you might want to eliminate this coverage altogether.  Don’t forget to take advantage of discounts available to you.  For example, you may be eligible for a discount based on the number of miles you drive; your age; your good grades if you are a student; your driving record; or if you have taken a safe driving course.   You may also be able to get discounts if you insure more than one vehicle, insure your vehicle and home with the same company, have anti-theft devices, or have safety features as air bags or anti-lock brake system.

For more information on automobile insurance costs go to  www.naic.org; http://www.insure.com; and http://www.insweb.com

Discussion Questions

1.  What can you do to reduce your automobile insurance costs?

2.  Why better college grades result  in reducing your automobile insurance costs?

 

Teaching Suggestions

You may want to use the information in this blog post and the websites to

* Have students research various types of discounts available to them.

* Research the make and model of vehicles that are most frequently stolen, consequently resulting in higher insurance rates.

Categories: Car Insurance, Chapter 8 | Tags: , , | Leave a comment

Bogus $10,000 Credit Line

Posted on June 4, 2014 by Melissa Hart

In May 2014, the Federal Trade Commission mailed checks totaling over $3.7 million to over 26,000 consumers whose bank accounts were debited without their consent by EDebitPay LLC.  The company deceptively offered a $10,000 credit line that was really a membership to a website where consumers could buy goods.

In 2011, a federal district court ordered the company to pay more than $3.7 million after finding that the defendants were in contempt of court for violating a 2008 court order by selling a bogus “$10,000 credit line”, and a “no cost” prepaid debit card with hidden fees, to consumers who were unemployed or had poor credit.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.

For additional information on fraudulent business practices, go to

http://www.ftc.gov

Discussion Questions

1.  How do you discover that someone has debited your bank accounts?

2.  What steps can you take to prevent such fraudulent business practices?

Teaching Suggestions

*  Ask students what actions might they take to ensure that their credit cards and other financial information are secure.

*  Ask students to compile a list of resources a person can use to report such fraudulent business practices, and check out a company’s reputation before signing a contract.

Categories: Chapter 5, Identity Theft | Tags: , , , | Leave a comment

The Mutual Fund Education Alliance

Posted on May 31, 2014 by Melissa Hart

Since 1971, the Mutual Fund Education Alliance (MFEA) has been dedicated to informing and educating the investing public about how they can use mutual funds to achieve important lifetime goals.

The website for the MFEA provides both beginning and experienced investors with a wealth of information that can be used to become a more informed mutual fund investor.  For example, the MFEA website provides information about

  • The power of investing
  • Understanding risk
  • Why mutual funds?
  • The importance of performance,
  • Fund costs, fees, and expenses
  • Taxation

For more information go to

http://www.mfea.com

Teaching Suggestions

You may want to use the information in this blog post and information on this website to

  • Supplement the material you present in your classroom lecture or online course.
  • Create an assignment designed to strengthen a student’s basic understanding of mutual fund investments.
  • Create an assignment where students use the MFEA fund screener to evaluate one or more mutual funds.

Discussion Questions

  1. Often beginning mutual fund investors, just invest their money without really learning about mutual fund investments or specific funds?  Why is this a flawed approach?
  2. There are many investment websites that will help you learn about mutual funds and also evaluate different funds.  What factors make one website better than another website?
Categories: Chapter_13, Investments, Mutual Funds | Tags: , , | Leave a comment

Zacks #1 Ranked Healthcare Mutual Funds

Posted on May 28, 2014 by Melissa Hart

When markets are passing though choppy waters, investors often rely on the healthcare sector to safeguard their investments.

Healthcare funds are often considered a safe investment because the demand for healthcare services does not vary with market conditions or upturns or downturns in the economy.  Many of the companies in the healthcare industry, often found in healthcare funds, also pay regular dividends which can help offset a decline in a fund’s share price or increase total return for this type of fund investment.

In this article, Zacks Investment Research, provides a brief description of the five top rated funds listed below

  • Fidelity Select Biotechnology (Symbol FBIOX)
  • Prudential Jennision Health Sciences A (Symbol PHLAX)
  • T.Rowe Price Health Sciences (Symbol PRHSX)
  • Fidelity Select Pharmaceuticals (Symbol FPHAX)
  • ProFunds Biotechnology UltraSector (Symbol BIPSX)

For more information go to

http://finance.yahoo.com/news/zacks-1-ranked-healthcare-mutual-221117226.html

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Discuss the types of research provided by professional advisory services for fund investors.
  • Help students understand why the healthcare industry may be a safe haven in troubled economic times.
  • Assign one or more of the funds described in this article for more in-depth student research.

Discussion Questions

  1. Why would the healthcare industry be considered a safe haven in troubled economic times?
  2. Do you think this type of fund could help you obtain your personal investment goals?
  3. How would you research one of the specific healthcare funds described in this article?
Categories: Chapter_13, Investments, Mutual Funds | Tags: , , , | Leave a comment

Apple Returns to Bond Market

Posted on May 24, 2014 by Melissa Hart

Investors flock to Apple’s $12 billion debt offering.

The demand for Apple’s new bond issues with maturities ranging from three to thirty years and rated double-A-plus, the second highest rating, reflects a corporate-debt market that is putting in a surprisingly strong performance this year.  The rate for Apple’s 3-year bonds was 1.068 percent; the rate for 30-year bonds was 4.483 percent–about 1 percent more than U.S. Treasury securities.

Although Apple has a healthy cash pile, about $150 billion, it chose to issue bonds to pay for expanding its stock buyback program and increasing its dividend to stockholders. According to many experts, the fact that Apple has such a large cash surplus and is currently the most valuable U.S. firm based on stock-market value helped assure bond buyers that there is little risk in Apple bonds.

For more information go to

http://online.wsj.com/news/articles/SB10001424052702304393704579531591100806848#printMode

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Remind students that once a bond is issued, the price can increase or decrease because of the inverse relationship between a bond’s price and overall interest rates in the economy.  (Higher interest rates in the economy = lower prices for existing bonds; and, lower interest rates in the economy = higher prices for existing bonds.)
  • Explore different reasons why Apple chose to issue bonds instead of using some of its cash surplus.  (Reasons include taxation of cash held in off-shore accounts and financial leverage.)

Discussion Questions

  1. Apple chose to sell bonds to fund its share buyback program and increase dividends to stockholders.  What are the advantages of selling bonds instead of using part of its cash surplus?
  2. Why would a short-term bond pay lower interest than a long-term bond?
  3. Given your current age and financial situation, would you invest in Apple corporate bonds?  Why?
Categories: Bonds, Chapter_11, Investments | Tags: , , | Leave a comment

Absurdities at the IRS

Posted on May 21, 2014 by Melissa Hart

As strange as it may sound, U.S. federal tax law requires that stolen property, bribes, kickbacks, and income from other illegal activities be reported as income. And,  embezzlers, thieves, and bootleggers are allowed to take deductions for costs relating to generating that criminal “income.”

Due to an extensive network of hidden criminal earnings and witnesses unwilling to testify against him (for fear of their lives), infamous American gangster Al Capone was not prosecuted for illegal activities. He was, however, targeted and convicted of not paying taxes.

The government can collect taxes on illegal activity if it can be proven that an individual received income.  Soviet spy Aldrich Ames earned more than $2 million cash for espionage. He was charged with tax evasion because none of the money was reported on his tax return.

Regarding stolen property, IRS instructions note that  “if you steal property, you must report its fair market value in your income in that year you steal it, unless in the same year, you return it to its rightful owner.”

The IRS allows embezzlers, thieves, and bootleggers to take deductions for costs related to their criminal activity.  A taxpayer who was guilty of violating the Securities Act of 1933 was allowed to deduct the legal fees spent defending himself.

For additional information on “tax absurdities” go to

http://american.com/archive/2014/april/absurdities-at-the-irs?utm_source=today&utm_medium=paramount&utm_campaign=041414

Discussion Questions

  1. What may have been reasons for the tax law actions that may seem absurd?
  2. What changes would you recommend regarding current tax laws?
  3. How might a tax system be created to encourage business innovation and job creation?

Teaching Suggestions

  • Have students research various unusual examples of deductions that have been allowed or disallowed by the IRS.
  • Have students present proposals for revision in the current tax laws.
Categories: Chapter 3, Taxes | Tags: , | Leave a comment

Developing Career Capital and Achieving Success

Posted on May 17, 2014 by Melissa Hart

Most career planning experts believe that “career capital” is vital for success.  Career capital refers to differentiated skills that are both rare and valuable, and usually involve creativity, impact, control, or autonomy. A great job requires that you can offer something of value. Factors that contribute to building career capital include:

  •  an attitude of “what can I offer the world and my company?”
  • understanding what’s valuable in your career field by seeking varied expert opinions
  • continuing to expand your skill set
  • obtaining feedback to gain knowledge of your strengths and weaknesses
  • setting priorities on what will benefit your career
  • creating goals appropriate to your career stage

For additional information about developing career capital, go to

http://www.forbes.com/sites/laurashin/2013/05/22/7-steps-to-developing-career-capital-and-achieving-success/

Discussion Questions

  1. Why are some people more successful in their careers than others?
  2. What factors might be used to measure career success?
  3. How might a person better prepare for future career success?

Teaching Suggestions

  • Have students create a list of attitudes, behaviors, and skills that they believe are important for career success.
  • Ask students to explain actions they are currently taking to enhance their future career success.

 

Categories: Career Training, Career_Appendix, Skills Development | Tags: , , | Leave a comment

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