Financial News That You Can Use

1) The old adage "Buy low and sell high" might be bested by "Buy high and sell higher" according to John Wightkin of Schwab.

Over the last 11 years, if you bought stocks that were 90% or better of their year-long high, you outgained the market average by 1.9%. And if you bought equities at most 10% greater than their 52 week lows, you lost 3.5% to the market average. That's a very big difference (5.4%) which is most easily explained by the fact that stocks at a year long low are there for a reason.

And it turns out that whatever problems exist, they are not historically corrected very quickly. Don't expect a "bounce" on a low-ball purchase. Likewise, stocks on a high have been doing something very right lately and probably won't go south soon and may yet go up further.

2) A recent S&P report documented that owning stocks just on the first day of the month for the past 11 years returned 70% more than the classic buy and hold strategy recommended by the likes of Warren Buffet. That means your $10,000 invested and held would have brought you down to $8,209 over the last 10 years while the first of the month in-and-out investor after the same period would be sitting upon $13,816.

It appears that this phenomenon is due to a quirk in the market's habits. Money tends to flow into stocks on the first day of the month as institutional investors open their books. Who knew?

3) According to the Wall Street Journal, retirees (including non-medical) who began saving in their 30s ended up with a net worth of one-third more than those who saved at the same level but started in their 40s. And almost 50% more than those who started later. Nearly 40% said they regretted not starting earlier.

It's simple math and, as I wrote last week, your retired self will be very grateful to your working self if you start immediately.

4) American non-financial corporations alone are sitting upon almost $1 trillion in cash, a multi-decade high, percentage of assets-wise. When they get past their 2008 Debt Crash fears there will be a prodigious re-investment in the economy, with its concomitant employment and inflation rises.

The questions are a) When? and B) How to best take advantage of the surge?

Then again, if I knew the answers I would be anchored off the coast of St. Tropez sipping Dom Perignon.

5) Folks surviving the Debt Crash with excellent credit and aggressive charging habits can really get some good deals switching credit cards. Check cardratings.com or nerdwallet.com for guaranteed "free money." It's nice to get $100 or 30,000 more miles for spending in the usual way, just on a different card.

6) Wondering what to do with those pesky gift cards that you got for Christmas that you don't contemplate using? According to Tali Yahalom, If the card has no expiration date, go to plasticjungle.com to get an average of $82.67 back on a $100 card. If there is an expiration date, go to giftcardrescue.com for an average of $81.33.

And hopefully no embarrassment to the giver. I hate it when that happens.

7) Since 1945, bull markets have lasted an average of four years, up 94% of the time in the third year of the cycle, says Sam Stovall of S&P. And a president's third year is the most bullish of the four year cycle, up an average of 17%. The combination is historically rare; in 111 years there have only been 5 times when the convergence occurred and the market rose an average of 21%. We've got that convergence this year. Feeling lucky?

8) Jack Challis, a lawyer commenting in Money magazine this month, points out that stipulations in wills on how money is to be spent by heirs is unenforceable. But if you fund a trust after your death for the purpose of exerting some control, its disposition can be enforced.

If any of your legatees are not smiling when you tell them your wishes, pop for the $2,000 for a lawyer to set up the trust, although Challis says it's probably not worth it if the bequest is less than $100,000. So I guess his point is that if you have an unpopular bequest, make it a big one.

9) I have written about the value of vacations and I am happy that there is new research that validates what I've written, and what I like to do.

Joe Robinson in Don't Miss Your Life cites work that shows that it takes a full 2 weeks away to recover from burnout. During a vacation, scientists found that there is an 82% increase in alertness and reaction time. A 25% spike persisted after the vacationers' return, too.

The Framingham Study found that women who take vacations only every sixth year or less are 8 times more likely to develop a heart attack compared to those who took 2 or more time outs per year from work. Another study tracking 12,000 men found that over 9 years, those taking an annual vacation were 32% less likely to die from all causes and 39% less likely to succumb to cardiovascular disease.

Don't be like the 64% of people who said they cancelled or postponed a vacation last year because of work worries. Epitaphs don't boast how much or long you worked. Find a nice resort-based medical meeting, relax and write it off.

Personally, I recommend Hawaii.