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What should I do with my retirement accounts if I plan to retire in five years? In 10 years? In 20 years?
Tim Hanson, senior analyst at the Motley Fool: If you're retiring within the next five years, I'd make sure you have a sound asset allocation strategy that has your savings stashed in 70 percent to 80 percent bonds and treasuries...
By washingtonpost.com Editor | October 8, 2008; 07:05 AM ET | Comments (0)
Some advisers are encouraging people to take 10 or 20 percent out of their stocks and put it in an interest-bearing savings account. What do you think?
Tim Hanson, senior analyst at the Motley Fool: That depends on when you need the money. If this is cash that you've had in the stock market but that you need to pay your bills over the next 12 to...
By washingtonpost.com Editor | October 8, 2008; 07:00 AM ET | Comments (1)
Is there any such thing anymore as a "safety stock?"
Tim Hanson, senior analyst at the Motley Fool: In the short-term, there is no such thing as a "safety stock." But that was never the case. If you're willing to take a long-term view, however, there is no better place...
By washingtonpost.com Editor | October 8, 2008; 07:00 AM ET | Comments (0)
What's the one thing individual investors should keep in mind during these turbulent times?
Tim Hanson, senior analyst at the Motley Fool: Don't panic. While this may seem like a once-in-a-lifetime event (and in its intensity, it's getting close), the fact of the matter is that the stock market cycles through boom and bust...
By washingtonpost.com Editor | October 8, 2008; 07:00 AM ET | Comments (0)
I was thinking about doing some home renovations. Should I go ahead or not?
Tim Hanson, senior analyst at the Motley Fool: Again, that depends on your individual situation. My wife and I are actually planning on doing something with our basement in the near-term, but we've dialed back our plans. If you have...
By washingtonpost.com Editor | October 8, 2008; 07:00 AM ET | Comments (0)
I am a homeowner who works hard to pay my mortgage. Why should my tax money be used to help fix a problem I did not create?
Bush administration officials say they have no choice. They say lending would come to a halt without this bailout. In his most recent speech to the nation, President Bush outlined the potential fallout: Businesses would close their doors. Americans would...
By washingtonpost.com Editor | September 26, 2008; 03:54 PM ET | Comments (0)
What has become of the private mortgage insurance that borrowers paid monthly to insure mortgage lenders?
A common misconception about private mortgage insurance is that it is designed to help homeowners, but it's not -- it is meant to protect the lender against borrowers who miss their monthly payments. Most lenders require PMI only if a...
By Bob Greiner | September 26, 2008; 01:36 PM ET | Comments (0)
Does the administration's proposed bill contain a bailout provision for credit card and auto loan debt? How would that affect me?
The trade group representing the consumer credit industry would certainly like the $700 billion federal bailout proposal to cover credit card issuers and auto lenders. But that point is up for debate. The American Financial Services Association this week asked...
By washingtonpost.com Editor | September 25, 2008; 01:16 PM ET | Comments (0)
What is the impact of the government's financial rescue plan on credit unions?
The impact on credit unions seems quite minimal. These nonprofit cooperatives do not hold many of the investments that are poisoning other financial institutions, so they have weathered the crisis fairly well. Credit unions have kept about 70 percent of...
By washingtonpost.com Editors | September 25, 2008; 11:31 AM ET | Comments (0)
Are lenders more likely to hold on to the foreclosures they own as they wait for the federal government's bailout?
No. Under the current plan, the federal government would not buy foreclosed properties. It would buy troubled mortgages and mortgage-backed securities that may lapse into foreclosure. If they do, only then would the government actually own these properties. The government's...
By washingtonpost.com Editor | September 24, 2008; 06:08 PM ET | Comments (0)
Why is the bailout directed at financial institutions instead of ordinary citizens?
The problem the federal government is trying to address is at the macro level. An immediate concern is job loss, said Susan Wachter, a professor at the University of Pennsylvania's Wharton School of Business. If the financial system shuts down,...
By washingtonpost.com Editors | September 24, 2008; 09:00 AM ET | Comments (0)
How will the soaring budget deficit affect my investments?
Not positively. "If the budget deficit grows, that means the government has to borrow a lot more money," said Reena Aggarwal, a finance professor at Georgetown University. "That means there's a lot more demand for capital because the budget deficit...
By washingtonpost.com Editors | September 24, 2008; 09:00 AM ET | Comments (0)
How will the government's bailout plan affect home buyers and sellers?
The goal is to enable major financial institutions to unload their troubled mortgage assets so they can more freely lend to people who want to refinance or buy homes. A stronger flow of mortgage money should then help whittle down...
By washingtonpost.com Editor | September 23, 2008; 06:12 PM ET | Comments (0)
How will the government's plan affect my money-market fund?
Last week, the U.S. Treasury Department promised to insure the value of deposits in money-market mutual funds, much the same way that the Federal Deposit Insurance Corp. protects the first $100,000 in your bank account: Whatever you put in, the...
By washingtonpost.com Editor | September 23, 2008; 06:10 PM ET | Comments (0)
What types of bank accounts are covered by FDIC insurance?
FDIC insurance applies to all types of deposits at an insured institution, including those in checking accounts, savings accounts, so-called NOW accounts, money market deposit accounts and time deposits such as certificates of deposit. If a bank fails, you will...
By washingtonpost.com Editor | September 18, 2008; 06:17 PM ET | Comments (0)
What if I have more than $100,000 in bank deposits? Is there any way to get more FDIC coverage?
Yes. If you keep your deposits in accounts under different ownership categories, you will be fully insured even if the sum of all the different pots of money exceeds $100,000. There are eight different ownership categories, including single accounts, joint...
By washingtonpost.com Editor | September 18, 2008; 06:16 PM ET | Comments (0)
How safe is the money I've deposited into my bank account?
If you have $100,000 or less in your name at any FDIC-insured bank or savings association, you have nothing to fear. If you have certain types of retirement accounts, such as an individual retirement account, you're eligible for even more...
By washingtonpost.com Editor | September 18, 2008; 06:15 PM ET | Comments (0)
