The Financial Literacy category identifies tutorials and reference material that provides background on the subjects and processes used in retirement investment management.

There are a lot of financial and investing terms used throughout the site. If you would like to learn more about these topics, we have provided linnks to some of the best resources on the web. These are freeely available for your information.

We have reviewed the information presented and believe that it is a factual representation of the information. Where opinions are offered, they are in line with our thinking on the subject. However, the information is subject to change and is the property of the copyright holder.

• Modern Portfolio Theory
  Introduction to Modern Portfolio Theory: understand diversification and the Efficient Frontier, find a portfolio with the maximum Sharpe Ratio; why index funds are theoretically optimal.
• Exchange Traded Funds (ETF)
• Stock Valuation
  Learn the logic of stock valuation with a discounted cash flows calculator… plus P/E, P/S and PEG ratios, CAPM, DDM … Buffett’s secret formula
• Short selling
• Futures
  Trading Futures, Though Risky, Is Getting Easier - Futures are contracts to buy or sell an underlying item, ranging from commodities to financial products, on a future day for a preset price — although the assets themselves rarely change hands.
• Options
  Options Trading Tips for Success - requires three key elements - bargain-hunting instinct with the ability to identify undervalued and overvalued options, sound and well-designed game plan that provides consistent action over time and that works in all market conditions and discipline to follow the game plan.

Sources of information

• MoneyChimp MoneyChimp seeks to be the most coherent, logical, useful and accessible financial education resource on the face of the earth
• OptionsXpress Educate - links to educational information about investing in general and specificly about trading options

Reviews

• indicators
  • green - good, reliable information, factually supported, opinions in line with ours
  • blue - ok, but may contain information that could be misinterpreted
  • red - contains factual errors, staements made can not be substantiated or opinion expressed is in conflict with ours
• technical / mechanical - describes an investing concept (eg. ‘naked’ puts) or explains how a financial process works - buying options, selling short
• judgemental / opinion - interpretation based on facts, knowledge and beliefs, may be speculative
• degree of difficulty - overview, general information, advance / in-depth /extensive discussion of information related to the topic and may be of academic interest

Ben Stein’s article Three Big Mistakes in Retirement Planning provides some good reminders for Boomers.

• the key in financial life is to “match your liabilities with assets.” That is, for every liability that’s going to come down the pike, you must have a matching asset to meet it
• the bad scenario can and does often happen. Rather than plan only for the most optimistic outcome, it’s sensible to plan for the worst and make provision for it.

• educate yourself or hire a finance specialist to take care of you. Personal finance and making a retirement plan is serious business.

I can’t deny it. Rather than pay shipping for the book I wanted from Amazon, I bought not one, but two additional books so my purchase total was over the $25 minimum for “free’ shipping.

These guys are pretty smart. By offering free shipping above $25, all of us frugal consumers buy more than the $9 book we intended to buy. Something for nothing? I don’t think so.

However, this can become a problem when the customer orders multiple items. For example, one of the two is out of stock - no problem, as it is due to be available for delivery in 5-7 days. However, that turned out to be about 4 weeks. When item 1 was finally available, item 2 was out of stock. Now Amazon has one very frustrated customer. Not their fault? Well, not exactly.

There is inflation - the price of consumer products goes up, and there is inflation - the amount of the money supply created by the Federal Reserve increase.

IF there is Inflation THEN

• price increase for goods and services +??%
• CPI

ELSE IF there is no inflation THEN

• remain where we are now +/- ??%
• government inflation statistics 2.3%

ELSE there is deflation

• decreasing prices