Improving Housing Prices

I hope that all of you are in the Holiday spirit. While I was watching the Republican debate last night, the most important thing that I was a commercial sponsored by AAG which made me very happy, perhaps you saw it as well.

The first paragraph is from Vanguard. The last section is part of an article that I found on if a person should hire someone to manage their portfolio. As an investor, I am looking forward to the rest of the year as our politicians will be relatively quiet and no European summits.

Vanguard

Growth in service-sector activity slowed for the third month in a row as other economic reports issued mixed signals. News from Europe continued to weigh on the markets, even as some European Union nations announced a plan to address the debt burden plaguing the EU economies. For the week ended December 9, the S&P 500 Index rose 0.9% to 1,255.2 (for a year-to-date total return—including price change plus dividends—of about 1.8%). The yield on the 10-year U.S. Treasury note rose 2 basis points to 2.07% (for a year-to-date drop of 123 basis points).

AAG Commercial - Improving Housing Prices

While watching the Republican debates last night on ABC, I saw this commercial sponsored by a company called AAG which made me happy. This is a very important commercial because it says that the economy is improving and the prices of houses are going up. The commercial stated that AAG was interested in offering reverse mortgages. The reason that this is important is that for the first time in a long time someone is advertising for a reverse mortgage and this only happens when the value of the home is going to be going up. This is like someone sounding a bell that said happy days are hear again. As a good friend of mine says, as housing goes so goes the economy.

A reverse mortgage is where a financial company buys your home from you and you continue to live in it. You get a monthly payment that is specified in the contract. This financial company will not buy your home if they believe that the value of the home is going down, they only buy if the price is going up. What AAG is saying in this commercial is that with the prices of housing going up and interest rates being low that they are very happy to make money with your home.

If AAG is buying homes, now would be a good time for others to buy as well. If you have been waiting for a bell to go off to say that now is a time to buy that home. Well it just went off.

Should I Hire a Financial Adviser or Go It Alone? By Walter Updegrave | CNNMoney.com

The answer depends largely on how comfortable you are going it alone -- and how good a job you think you could do overseeing your finances without help from a pro. Let's start with one key aspect of retirement planning: investing. As long as you're familiar with the concept of asset allocation and you're comfortable picking funds, you shouldn't have trouble building a diversified portfolio on your own. And you can get plenty of assistance short of hiring an adviser: These days most 401(k) plans provide tools to help you assess your investing options and assemble an appropriate lineup for your age and risk tolerance.

The problem is, if you screw up, you can end up losing a lot more than you might save. In a recent study, benefit consultant Aon Hewitt and advice firm Financial Engines looked at the 401(k) returns of more than 425,000 savers from 2006 through 2010. The findings: The median annual return of those who got professional help was almost three percentage points higher than the return for those who invested on their own, even after taking fees into account.

One reason for that performance gap is that the investors who flew solo were far more likely to be too aggressive or too conservative. Emotions also played a role: Do-it-yourselfers were more apt to cash out of stocks in the 2008 crash. As a result, their returns lagged substantially when the market rebounded in 2009.

A shot at better investment returns isn't the only reason to seek help. During your working days, sticking with a sufficient savings rate is crucial. Setting aside 12% to 15% a year (including a company match) is an oft-cited rule of thumb, yet a 2011 Vanguard study estimated that fewer than a third of 401(k) participants put away that much.

While you're saving for retirement, you have plenty of free tools to guide you, plus low-cost access to professional help through target-date funds. But as you near the end of your career, the stakes go up.

Turning your retirement savings into a reliable income is essential, and that can be daunting to tackle on your own. An October report from MetLife found that 40% of pre-retirees believe they can spend 7% or more each year without depleting their savings -- most advisers consider 4% to 5% a safe withdrawal rate.