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Highlights of the May 2008 Issue of MONEY
[Full stories also available online at www.CNNMoney.com]
SPECIAL ISSUE: MONEY'S FIRST ANNUAL 100 BEST LIST
Welcome to MONEY's first annual 100 Best List, a roundup of today's most brilliant people, investments, strategies and deals. Featured on this year's list are: the best recession proof jobs, cars for the money, places to buy a house, blue-chip stocks, mutual funds, wines under $20, credit cards, checking accounts, remodeling tricks, affordable vacations, 401(k) plans, money book of 2008, fixes for the sub-prime mess, flat screen TV and more...
THE BEST WAYS TO PROTECT YOUR MONEY TODAY, by George Mannes, page 94
You face four big risks in this economy. Here's how to hedge against them — no heavy-duty locks required.
Everywhere you look, bad news abounds. The falling stock market, the floundering economy, tumbling home values, vanishing jobs — it's enough to make you want to hide your money in a lockbox and throw away the key. Don't. "The last thing you want to do is panic on short-term economic news," says Houston financial planner Tom Jackson. "That could have dreadful long-term results." Still, it's not imprudent to tweak part of your portfolio to hedge against the four worst risks — let's call them the Four Horsemen of the Subprime Apocalypse. Such hedges may not come cheap, since everyone wants the same protection these days. But they can buy you the peace of mind you need to keep the bulk of your money in the game.
LIFE IN THE TIME OF INFLATION, by Marlys Harris, page 23
If prices keep rising, you may need to think differently about a few things.
The price of milk is up 13% since last year; hospital costs are up 8%; gas, 33%; and prices overall climbed 4% (vs. less than 3% annually over the past decade). Plus, with the Fed pumping money into the economy, the price pinch probably isn't improving soon. No wonder inflation ranked as the No. 1 financial worry in a recent CNN/MONEY poll. While we're nowhere near the 1970s — yet — it's a good time to review how inflation changes the rules.
FOR SALE BY ANY MEANS, by Carolyn Bigda, page 55
Are you really serious about selling your home in this market? Then be prepared to try anything — and everything.
At last count, there were 4 million pre-owned houses for sale. That's up 14% from the start of last year. In cities and counties hardest hit by the real estate downturn, the numbers are even more dizzying. In such a hypercompetitive market, you have to go way beyond what everyone else is doing — especially if you want to move your home quickly. Old standbys like slapping a fresh coat of paint on your clapboards or throwing in a complimentary plasma TV just won't cut it. Instead, you have to rely on guerilla marketing tactics to get your home noticed.
VALUE ADDED: NINE WAYS TO ENHANCE A HOME'S CURB APPEAL, by Josh Garskof, page 65
Cosmetic fixes that can put a prettier face on a plain-Jane home will pay for themselves — and then some.
There are a lot of drab, even downright gloomy looking houses out there — especially among homes built after World War II, when many builders abandoned traditional architectural styling to streamline costs and mass-produce housing. Thankfully, the cosmetic surgery required to put a beautiful face on your home won't hurt a bit. It doesn't even require a big-ticket construction job. MONEY investigates simple ways to boost your home pride, endear yourself to the neighbors and generate a lot more interest from buyers someday when your house goes on the market.
WHEN A HELOC FREEZES OVER, by Carolyn Bigda, page 26
What to do if the bank tries to put your credit line on ice.
In recent months, tens of thousands of homeowners have been shut off from their equity as lenders try to stem losses from subprime mortgages and other high-risk loans. As of September, delinquencies on HELOCs were up 47% year over year, according to Economy.com; the numbers are expected to be worse in 2008. In response, Countrywide has already suspended an estimated 122,000 lines, many in high-foreclosure-rate states, and USAA has frozen or reduced some 15,000 accounts. Bank of America, Chase and Citibank, among others, are following suit. Not all HELOCs will be frozen or downgraded, but you can be sure lenders will scrutinize every account — including yours. MONEY investigates what you can do to protect your home-equity line of credit.
YOUR MONEY & YOUR LIFE: HOW I'M COPING WITH A SCARY MARKET, by Jean Chatzky, page 32
I don't like this market at all, but I'm not planning to hit the sell button (or the medicine cabinet).
With the help of experts on psychology and behavior, MONEY has come up with six ways to remain calm when dealing with the feral markets:
- Admit you're nervous
- Go on a shopping hiatus
- Boost your savings
- Make the desk where you pay your bills as neat as a pin
- Call your advisor
- Read the news rather than watch it
YOUR KID'S IN COLLEGE! SO... HOW WILL YOU PAY?, by Amanda Gengler, page 37
You knew college wasn't cheap, but actually seeing the bills is total sticker shock. Welcome to our crash course in handling it.
As 2 million high school seniors eagerly plan for their freshman year by thumbing through class catalogues and updating their Facebook pages, millions of parents nervously wonder: How exactly will I pay for these bills? In the event that your child attends a relatively inexpensive in-state public college, you're likely looking at a $13,600 tab next year. If she is heading to an out-of-state or private college, you might be on the hook for two or three time that much. You could be facing a vast shortfall despite having saved diligently for years. What's worse, time's up: Your first check may be due in two or three months. Catchup time is over. But before you throw in the towel, follow the plan MONEY developed.
THE BOTTOM LINE: WILL THERE BE A SUBPRIME "PERP WALK"?, by Pat Regnier, page 138
Admit it. You want to see some justice handed out on Wall Street. Thanks to the Great Mortgage Panic of 2008, your home value is tumbling, credit is harder to get and the job market may turn a lot tougher. And let's not even talk about your 401(k) balance. It's natural to be angry when forces beyond your control mess with your life.
So we're looking for villains. Some people — especially Wall Street people — blame feckless, house-hungry borrowers. Then there were regulators who didn't bother to regulate. But the heart of the matter is that Wall Street went nuts. Again.
WHY ACTING BEARISH IS A DUMB MOVE, by Jason Zweig, page 69
Everyone "knows" the market can only get worse from here. That can lead to some truly stupid investment behavior.
Everyone "knows" the market can only get worse from here. That can lead to some truly stupid investment behavior.
If the thought of opening your mutual statement makes you squeamish or if you avert your eyes whenever CNBC comes on at the gym, it's understandable. This has been one ferocious stock market. Wall Street has been flirting with a bear market — conventionally defined as a 20% decline in the major indexes. Yet there is still a bull market raging in one commodity on Wall Street: utter nonsense. Frightful times in the stock market almost always brings out rash, stupid and dangerous ideas about how to invest money. And this downturn is no exception.
DEPARTMENTS
START: The Big Idea Economist Teresa Ghilarducci has a plan to save early retirement. Do The Right Thing Does the man I'm dating really need to know that I'm loaded? PLAN: Finding the Right Words Land a seat when your flight is canceled. Right On Your Money How to figure out when long-term-care insurance makes sense. The Boom Years Don't let money ruin your marriage. The Long View Are your bonds and high-yield stocks really safe? Savings and Credit Unusual value in tax-free money funds. INVEST: Money Makeover Much too young to play it safe, the Reeses need to stop kidding around and invest in stocks. Fund Watch The MONEY 70 funds that have held up best. SPEND: Antique Shoppers' Best-Kept Secret Estate sales can be treasure troves for deeply discounted art and collectibles. GPS That Puts You In the Fast Lane The latest mapping units can help you dodge traffic.
MONEY is available in digital format. To access this version go to http://digital.money.com
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