Reading through this month's edition of Money Magazine today, here are some highlights of interest....
Life in the Time of Inflation: "Have you seen the price of milk lately? It's up 13% since last year. The pain isn't only at the supermarket, however. Hospital costs are up 8%; gas, 33%; and prices overall climbed 4% (vs. less than 3% annually over the past decade.
How I'm Coping with a Scary Market: "I've boosted my savings. I've bumped up my 529 contributions and am putting a little extra toward my mortgage every month. Now despite the stock market's slide, my college savings accounts are still heading up...."
Are Your Assets Really All That Safe? "The best way to protect yourself: Stick to bond funds with intermediate maturities of, say, five to eight years. ...Intermediate-term bonds typically pay most of the return of longer-term issues with far less volatility. You can create your own portfolio of high-quality intermediate term funds by culling selections from MONEY 70, our recommended list of mutual funds....
...Lesson: When it comes to your cash investments--the ones you can't take chances with--limit yourself to secure options like short-term FDIC-insured CDs and money funds. True, money funds don't guarantee you against losses. But if you stick to funds issued by firms with solid reputations, your chances of experiencing any losses are minimal."
Yes, You Can Find a Safe High Yield: "If you're in search of a safe parking spot for your cash, don't overlook tax-exempt money-market funds. The yields on such funds have dropped in recent months but relative to other safe places to put your cash (under your mattress included), the payouts are higher than at any time in recent memory. If you're in the 28% bracket, the 2.36% yield you earn on the average tax-exempt money fund is the equivalent of collecting 3.28% in a taxable fund. That's well above today's 2.65% average yield on taxable money funds.
"We're in a very slow, lousy economy. It doesn't feel good. We won't have a V-shaped recovery. Companies won't get credit they need. People with slightly imperfect credit won't be able to buy a house. One scenario has it that there will be a big bounce in the second half of the year because of the tax rebate. I am skeptical. 2008 will not be a super year."
-Burton Malkiel, Professor of economics, Princeton University and author of A Random Walk Down Wall Street
"You should be buying municipal bonds. They are yielding more than treasuries (3.02% tax-free vs 2.75% for five-year maturities). That rarely occurs."
-Mark Kiesel, Portfolio manager, Pimco
