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Age-based Saving with Gold and Real Estate

Today’s installment of age-based investment tips for 2009 focuses on gold as well as real estate.

25 to 35:
The key for investing for this age group is thinking long term. Plan to invest a specific amount of money regularly over a long period of time.

Avoid selling stocks unless you absolutely need the liquidity, getting out at the bottom will mean missing the upswing. The current stock market offers and opportunity to buy at low prices, according to Thomas OBryon, CEO of Wilshire Finance Partners, a Los Angeles-based real estate lending company.

35 to 55:
Success in investing requires a long-term strategy and diversified portfolio with investments that include but not limited to real estate, commodities, stocks and bonds.

Avoid selling stocks and consider buying shares in financially solid companies that have earnings and a small debt to equity ratio. If you’re in the bond market go with shorter-term notes, you will be less affected by volatility and they are more liquid.

Consider a 5% to 15% investment in precious metals as a hedge. “In 5,000 years, gold has never been worth zero,” says Kevin DeMeritt, president of Lear Capital, a Los Angeles-based precious metals investment company.

55 to 75 and older:
People are living longer, healthier lives. This, combined with inflation, means there is a real concern for longevity risk management. These folks need investments that provide predictable monthly cash flow, security of principal, generate attractive rates of return, offer diversification, and an inflationary advantage that is not affected by market volatility, says Wilshire Finance’s OBryon.

“Mortgage pools, generally managed by private lending institutions, represent one of the greatest sources of investment revenue opportunities today,” OBryon says. “Investing in a mortgage pool fund can provide lifetime retirement income making them ideal for retirees, those nearing retirement and others on a fixed income.”

Mortgage pool loans are based on the value of real property. They are generally short-term, bridge loans (one year to five years). As asset-based loans, the primary source of repayment is from the sale or refinancing of the collateral property.

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Age-Based Advice: Debunking the Equity Myth for Young Investors

This installment of age-based advice from a financial adviser comes from Laura Mattia, who is a wealth management principal at Baron Financial Group I’m highlighting her 2009 recommendation for investors ages 25 to 35 because it is different from the financial planning advice I normally hear.

It is often said that a 25-year-old’s portfolio should be more heavily invested in equities since the assumption is that he or she has a long horizon. However, a person in their twenties has yet to experience various life events, such as buying a home, getting married, having children, etc.

As a result, this age bracket may require some of their investments to execute their plans. It is difficult for a twenty-something to truly know where their career is headed, whether they are dependent upon a nice big salary or if they will need access to some of these monies. Perhaps their portfolio should be much more conservative than initially thought. It might be more appropriate to be invested in the following manner:

Stocks: 20%
Bonds: 40%
Cash 40%

This strategy offers stability and income as well as minimal growth which will get this investor started. Once they make their big purchases, this strategy should be re-evaluated.

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Apple Will Be Just Fine Without Steve Jobs

nullLet’s say Steve Jobs retires next year. So what?

I’m one of those in the lonely camp that doesn’t believe Jobs is Apple and Apple is Jobs. Or that when he disengages from Apple the wheels must necessarily fall off.

Jobs bought Pixar in 1986, and while he wasn’t nearly as closely involved with it as he has been at Apple, he assembled a team that helped the company thrive even after it was sold to Disney two years back. Since then, Pixar delivered the Oscar winning “Ratatouille” as well as “Wall-E” (Nos. 144 and 34, respectively, on IMDB’s list).

If Jobs hasn’t done the same at Apple, he’s failed at one of the key tasks of a great CEO. I don’t think that’s his style. Yet this week, the media once again turned the spotlight onto Jobs’ health after the company said he won’t appear at MacWorld, that Apple is essentially snuffing what has become a tedious knockoff of a Galaxy Quest convention. Any other company, and it would have ended at the headline.

But Apple isn’t any other company. It’s Apple. Therefore Jobs must be dying. Therefore the stock loses $6.6 billion in two hours.

One day we’ll all look back on this and shake our heads. Rarely has so much attention been paid to the health of an individual who was not the head of state or a religion. What if Jobs is fine, and just wanted no part of the obscene gadget fetishism, which tech conferences in general have become, when millions were losing their jobs and homes? Isn’t that kind of the opposite of dying?

The voluble world of Apple-gazers has been cleft between the virulent fanatics and the desperate naysayers (which the fanatics have in good part created). All this drama overlooks two boring things: a) Apple is a company, and b) Steve Jobs is a businessman.

Apple doesn’t need Macworld anymore. It did for years, when Jobs would step out like Gandalf and save our butts from the ill forces of Mordor. Now Apple rules online music, and Mordor — read Microsoft — is greatly weakened.

Apple has blossomed into a global, mainstream brand, and the fanatics who helped get it there are suddenly less useful. Which brings us to point b.

Until now, Steve Jobs never showed discomfort with the mystique, the legend, the icon that he had become as the man who created and later saved Apple. He totally dug it, but he dug it totally as a businessman. His fan base grew passionate, grew vocal and then — in late 2008 — grew outmoded. Apple simply didn’t need them anymore. It could expand on its own powers.

Besides, this whole mystique thing was starting to backfire. The idea that Jobs and Jobs alone could keep Apple successful is kind of demeaning to the other 32,000 employees there. If Apple did suffer after Jobs’ departure, many of the most talented of those people would found startups, some of which would eventually accomplish insanely great things like Apple has.

Beyond Apple’s stunning success this decade, the success of those new startups would be the ultimate compliment to Steve Jobs’ skills as a corporate leader.

Photo courtesy of acaben via Flickr.






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Optical Cable Cuts Disrupt Internet Service in India & the Middle East

Update: Research firm TeleGeography emailed us that three international submarine cables in the Mediterranean Sea were damaged today, causing disruptions to internet and phone traffic in Egypt, Saudi Arabia, India and all of the Gulf states. TeleGeography pinpoints the faults  between Tunisia and Italy, and claims the damaged cables are the FLAG Europe-Asia cable, operated by Reliance Globalcom, and two consortium cables, SeaMeWe-3 and SeaMeWe-4 owned jointly by several telecommunications companies. From the TeleGeography statement:

The current series of faults is reminiscent of the submarine cable faults that occurred in January 2008. Today’s events have the potential to create worse disruptions: while the January 2008 accidents broke two of the three cables connecting Europe with Asia via the Middle East, Friday’s cable failures have caused faults on all three. France Telecom projects that service on all cables will be restored by December 31. Until then, many carriers in the Middle East and South Asia will need to route their European traffic around the globe, through South East Asia and across the Pacific and Atlantic oceans.

It’s unknown if the Malta cable problems are related to these cuts, perhaps from a weather or seismic event. However in the online world the cuts are certainly related in how they will make it that much slower or impossible for users to connect around the world. (Malta cable cut report published earlier follows.)

In a reminder of both the frailty and the flexibility of the web, the Times of Malta is reporting that last night, a submarine cable delivering traffic to subscribers of GO’s broadband service experienced a “fault.” Thousands of Maltese lost their web connections.  Combine Malta’s experience with the earlier epidemic of a few undersea cables getting cut over a period of days, and a fight by Sprint and Cogent in the U.S. over peering agreements that cut off the web for some users, and it becomes clear that we should consider the web not only as physical infrastructure, but also held together by political and economic agreements.

It’s like an information superhighway, but also a like series of treaties that allow trade to various points of the globe. In Malta’s case, an agreement with Vodafone to share its cable kept the physical infrastructure from staying out. But as the Sprint/Cogent peering fight proved, when those agreements fail, the web is vulnerable in a way roads are not.






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