10 ETFs to Europe in 2014 to betting

8:30 AM 2014, betting, Europe No Comments

Business Week | By Ari I. Weinberg, the Wall Street Journal

Access for us investors to the euro zone, where apparently the worst may be finally over also look for a rough January-expensive shares.

Europe is back.

In the year 2013, the continent's economies picked up off the mat to keep many worn by the lingering promise that the European Central Bank and its President Mario Draghi, "that would do everything" in the eurozone afloat.

Now, U.S. stocks a banner year and search comply with out even a rough January, Europe, relatively expensive has become the popular pick among investment and large to beat such as the market in 2014. This is the case despite expectations that economic growth is still weak. Has the feeling that the worst is over and that all growth is good growth.

What is the best way to exchange traded funds to use to play the recovery? Investors have a number of options-from ETFs, covering the entire region to country-specific currency safe vehicles. But they come with issues and risks to consider.

For investors, that is on the lookout for broad coverage, to consider a fundamental question: How do you want to define Europe?

You are looking at two large, varied options: $14.3 billion Vanguard FTSE Europe (VGK) and the $2.7 billion iShares Europe (IEV), based on the S & P Europe 350 index. There are nuances in between, and Vanguard charges marginal index 0.12 percent expenses vs. 0.60 percent for iShares.

These resources include both however exposure to Great Britain and Switzerland, Bank systems outside the core euro-zone involved. The two nations represented 47 percent of the two funds list at the end of the year 2013.

Why is it important if the two countries are included? "Europe's economies and stock markets sharply over longer periods correlated", says Susanne Alexandor, Portfolio Manager for the Cougar global Investments Ltd. in Toronto. "But currency effects may affect performance, especially for shorter periods of time in countries outside the euro zone."

Euro purists prefer the $8.8-billion iShares MSCI EMU ETF (EPU) or $4.9-billion SPDR Euro STOXX 50 (FES), the Switzerland and the United Kingdom to omit a difference: former before recently held shares in 241 companies, while the latter 50 stops. There are also funds that approaches use Indexing. First trust Europe AlphaDEX (FEP) selects stocks based on growth and value factors, then fits for country and weights. Europe of WisdomTree SmallCap dividend (DFE) based on annual dividends paid.

Read more: 6 reasons your investments stink

Who wants with countries, Germany and the United Kingdom was popular choices for ETF investors. Both countries want to grow in the year 2014: Germany, on the back of exports, and the United Kingdom, thank you for the recovery of a watchful Central Bank.

Many asset managers also focus on these two economies. Stephen J. Cucchiaro, chief investment officer of Windhaven, an $18.5 billion consulting company in the Charles Schwab (BLK), mainly, for example Germany and the United Kingdom in the half of 2013. He says that Windhaven still extended client companies to other European countries still do not.

Alexandor by Cougar global says to consider your company to other European economies, but has not yet outside of Germany, about iShares MSCI Germany (EEC), and United Kingdom on iShares MSCI Germany (EMU) invested.

Of Europe's other big economies analysts still back to France or Switzerland as a country-oriented investments have come. "There are good companies in France, but are not considered market-friendly government policies, and Switzerland is burdened by a high Swiss franc", Alexandor says.

As for the rest of the Pack, while individual countries funding for almost all European countries there (Luxembourg sorry!), many of them are too small or illiquide-- the Fund and the underlying investments –-for professional money managers to consider. Take that as a warning. The smaller country ETFs often dominate a company or industry. The indexes themselves are even "limited" to compensate for this anomaly.

If you want to monitor smaller economies for potential winners, "an eye on European bond markets for indicators for the peripheral countries" Alexandor says.

Recently the market at levels below which moved crisis have issued required debt as interest rates Ireland and Portugal. Despite the progress, none of the two countries is currently Cougars attractions.

In other markets Alexandor observed Poland, whose Wirtschaft closely associated with Germany, and the iShares MSCI Poland Capped (EPOL) to finance.

Something else to keep in mind: with the most foreign stock fund investors get exposure to the currency in which the securities are. This increases income, if the currencies against the dollar to appreciate and it performance, SAPs if the foreign currencies to weaken.

In European stocks without currency risk, moves for investors, WisdomTree investments (WETF) and Deutsche Bank (DB) offer ETFs invest want to, that short-term hedging in euro, British pound, Swiss franc, and others. Only WisdomTree Europe hedged equity (HEDJ), at $731 million in assets, has garnered much interest from investors.

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10 tips to pay for college in 2014

12:30 PM 2014, college, pay, tips No Comments

| By Christina Couch, Bankrate.com

College is still expensive and financial aid is still tricky to land, but help is available.

From crowdsourced student loans to tuition freezes, here are 10 ways to pay for college, reduce college costs, boost your savings and score more financial aid in 2014.

As the White House pushes higher education institutions to control their expenses, more colleges are seeking ways to help families understand and minimize their costs, says Daniel Reed, vice president of federal issues for the California Association of Student Financial Aid Administrators and senior financial aid officer for Point Loma Nazarene University in San Diego.

"I think the trend is going that way towards freezing tuition or at least reducing the amount of tuition that increases by year," he says.

Several public school systems, including the University of California and Iowa State systems, have already proposed tuition freezes for the upcoming year. Antioch College in Yellow Springs, Ohio, is even going so far as to offer a full four-year scholarship to all admitted 2014 students.

One financial aid change in 2014 will impact dependent children of unmarried and same-sex parents. Under 2013 law, the Free Application for Federal Student Aid -- the document that the federal government uses to assess financial need -- has based a family's financial aid package primarily on the income and assets held by the student and, if unmarried, the parent or legal guardian who claims them as a dependent. This means that in cases of unmarried parents and same-sex marriages that aren't federally recognized, financial information on only one parent has been assessed.

Starting with the 2014-2015 school year, the FAFSA will collect information on both legal parents, regardless of marital status or gender. Though the Department of Education states that "most students will be unaffected," the change could dramatically impact federal aid packages for some students to pay for college, says Barmak Nassirian, director of federal policy analysis for the American Association of State Colleges and Universities, a research and advocacy nonprofit for approximately 420 public four-year institutions.

"When you factor in more aid resources, resources that have historically been excluded, you actually drive down the amount of aid eligibility that the applicant is entitled to," he says.

Federal aid may be harder to get for some students, but aid that isn't based on financial need is increasing. The National Center for Education Statistics reports that the proportion of undergraduates receiving merit-based aid more than doubled from 1996 to 2008 and the average merit award rose from $4,000 to $4,700. Some research and advocacy organizations like the Education Trust and the New America Foundation criticize the shift in merit awards as primarily benefiting wealthier students who have greater access to resources that can make them more academically competitive.

"There used to be twice as much need-based aid as non-need-based aid at public colleges and universities, and now they're about even," says Michael Dannenberg, director of higher education and education finance policy for The Education Trust.

For students of all income levels, increased funds for talented students to pay for college means an increase in the value of top-notch grades and academically challenging courses. To increase merit aid eligibility, students should keep their grades up, start the search for aid awards early and work with their academic advisers to build a rigorous high school curriculum.

With college costs increasing, it's no shock that many borrowers can't pay their student loans. The Department of Education reports that almost 15 percent of all federal loan borrowers default on their student loans within three years of beginning repayment. That's why the government is increasing its outreach to inform qualified borrowers of their income-driven repayment options.

"If you're going to miss payments and this program that exists is sitting there for you that could literally make the difference between you defaulting or staying current, I think that's a huge benefit for a family," says William Wozniak, director of marketing for ISM College Planning in Indiana.

Under the income-driven repayment plans, eligible federal loan borrowers can have their monthly student loan payments capped at 10 percent or 15 percent of their discretionary income and forgiven after 20 or 25 years of consecutive payments, though they'll have to pay taxes on the amount forgiven. Borrowers who work in public service professions will have their debt dismissed after 10 years of repayment without tax consequences. Borrowers can estimate their monthly income-based payments at StudentAid.ed.gov.

Changes also are afoot for some 529 plans. Regulated by individual states, the popular college savings vehicles all provide financial aid advantages and federal tax-free growth on funds, but each has its own fee structure and state tax incentives.

In 2014, some plans will undergo significant changes. For example, North Carolina will end the up to $5,000 state tax deduction it historically has offered to residents who hold in-state plans. Pennsylvania is lowering fees in its 529 plans while Wisconsin is considering a move to increase its state tax incentives.

If you're considering opening a 529 plan, read the terms carefully and do some comparison shopping, says The Education Trust's Dannenberg.

"(A family's) own state's 529 may not be the best choice for a family because of the different fees associated with different plans," he says.

Federal student loans almost always provide better interest rates and borrower protections, but if you need a private loan supplement, new crowdsourced funding sites could potentially provide lending alternatives or better loan terms than traditional financial institutions. While sites like PigIt.com provide a platform that allow "dreamer" college students to raise educational funds by offering incentives like work or gifts in return, Upstart.com offers crowdfunded loans in exchange for a percentage of the borrower's income over the next five to 10 years. The catch with crowdfunded finance is that not everyone gets their campaign fully funded.

"When people put out there that they want to be a doctor or they want to do this or they want to do that and they're at a strong school and they're going to do wonderful things and they have high GPAs, I think those students probably fare better in who's going to get money," says ISM College Planning's Wozniak.

Before starting a campaign, students should make sure to read the site's fine print and compare online financing options to loans offered through the federal government, banks and credit unions.

"A big part of what your price will be is the college you choose, and right now college selection choices are too often underinformed if not irrational," Dannenberg says. "People would be well advised to not simply associate price tag with quality ... That's not true when it comes to higher education."

One of the easiest ways to score financial aid is to apply to schools that offer lots of it to students like you. The National Center for Education Statistics' College Navigator tool can help you find institutions that offer substantial aid packages to families in your income bracket while The Education Trust's College Results Online database can identify colleges that are similar to your dream school in net price and academic competitiveness.

With higher tuition prices and more student debt on the line, Point Loma Nazarene's Reed says that it's even more important for families to financially plan ahead. That means not only creating a college savings strategy early and taking advantage of compound interest, but also having a serious chat about how much debt the family can handle.

"A lot of people tend to think 'someday I'll pay this back,' but really should be thinking about 'should I take out this much money,' and seeing in my chosen career path what my starting salary is," Reed says. "I know that's a hard conversation to have with an 18-year-old traditionally coming into a college experience, but the more we can encourage students and families to think ahead, the better off they'll be on the repayment side."

According to the National Association of Colleges and Employers, the average 2013 college graduate had a starting salary of $45,327, with humanities and social science majors ranking lowest with average salaries of $37,791 per year, while engineers bring home more than $62,000 annually. Students can find starting salary information for their majors at NACEweb.org.

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Top 10 dumb debt decisions in 2014

9:00 AM 2014, decisions, top No Comments

| By Steve Bucci, Bankrate.com

If you want to maintain your finances this year, here are some debt moves to avoid.

Congress may be unfathomable on a good day. But, financial silliness isn't limited to them. We who elect and re-elect the best and brightest from our states are not without our own financial follies. Forget the 2013 Financial Cliff! Here is my take on the 2014 Abyss for dumb debt moves.

You are not doing yourself any favors by attending an expensive school that may saddle you with tens of thousands of dollars in student loans until you have a clue as to what you may be doing for a career. Until you find your passion, keep expenses in mind and consider a lower-cost university or community college and limit the amount of loans you secure.

Show me yours and I'll show you mine. I know it's not very romantic, but neither is finding out you won't be able to buy a home when you wanted because your spouse has horrible credit and a large debt load. Knowledge is power. You owe it to yourself (and your intended) to find out what financial situation you are marrying into before you say I DO.

Like it or not, many employers use the information contained in applicant credit reports as part of their selection process. You don't want to be surprised by a question about your finances in an interview. Or worse, never get to be a finalist because of an inaccurate or explainable negative item from your credit report. Remember, 25 percent of all credit reports have errors!

This is an oldie but a goodie. No emergency savings means you are setting yourself up for debt. You can't be the master of your finances if you don't have a savings cushion in place.

The payday loan cycle is very hard to break. If you didn't have the money for that unexpected expense this paycheck, why do you think you will have the money next paycheck? Look for alternatives to fund the expense such as selling something you don't need or borrowing from a friend or family member.

Cars immediately depreciate in value by as much as 25 percent in the first year. Without a large down payment to compensate for depreciation, you'll be upside down in your loan quicker than you can text OMG!

Never, ever co-sign a loan unless you can afford to and want to make their payments for them, period! Unless, of course, you never want to speak to them again.

See No. 1. Student loans are next to impossible to get dismissed in a Chapter 7 bankruptcy. Taking a student loan into a Chapter 13 bankruptcy is like feeding a hungry relative for the next five years. The loans don't go away, but interest still accrues.

Odds of winning the lottery are so against you. People get ill and can't work as long as they might wish. And do you really want to burden your children? Wait a minute, do you want to burden yourself with living with your children?! Treat retirement as a debt you'll have to pay in the future.

Taking advantage of low interest rates is smart. Buying something you don't need because you won't pay as much in interest is not. If you have extra money each month burning a hole in your pocket, put most of it into your retirement and/or emergency fund savings, and spend the rest on paying down those debts from 2013.

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25 ways to improve your finances in 2014

3:48 AM 2014, finances, improve, ways No Comments

| By Kimberly Palmer, U.S. News & World Report

These nuggets of financial wisdom will lead you to a richer and more prosperous new year.

Are you ready to overhaul your spending patterns, start funneling more money into your bank account and buy better (and safer) products in 2014? If so, you've come to the right place. We've rounded up our favorite money stories to give you the bite-size nuggets you need to get your financial resolutions in place. Here are 25 ways to improve your finances in the new year.

If you have a "money shame," or something that embarrasses you or makes you feel badly about how you've handled money in the past, then make this the year to move on. Financial therapist Bari Tessler Linde says many people have trouble thriving in their current financial lives because they're still dwelling on past mistakes. "Most people need to understand their money story first," she says, which includes assessing strengths along with relationships to spending, earning and giving.

Simply asking yourself what your goals are can help set you on the path to achieving them, says Bart Astor, author of "AARP Roadmap for the Rest of Your Life," which is aimed at the 50-plus crowd. He recommends thinking big and pursuing your biggest dreams, even ones that seem overly ambitious. To help increase the chances of success, he also suggests sitting down with a spreadsheet to crunch some numbers and make sure you have money saved to fund your adventures.

Driving is convenient, but it can also be surprisingly costly. You can get into accidents through no fault of your own (and end up having to pay the deductible if the other person leaves the scene or successfully argues it wasn't his fault). Regular maintenance, including oil changes and repairs, along with registration fees and parking permits, also add up.

Climbing back from bankruptcy or paying off huge amounts of credit card debt are no small feats, and if you're in the midst of that kind of transition, you could probably use some support. Find friends who will help you stay on track with affordable activities and by serving as sounding boards. Keep your big goals at the top of your mind by posting them prominently in a place you look every day (like your desk).

With more than 400 product recalls a year coming out of the Consumer Product Safety Commission, it's hard to keep track of them all. Signing up for email alerts from the commission or downloading an app that alerts you about recalls can help. If you're buying used baby products, you'll want to be especially careful, since there's a high number of crib, stroller and high chair recalls.

When Detroit newspaper columnist Brian J. O'Connor decided to cut his spending by $1,000 a month, he did it by focusing on recurring expenses. Starting with phone, cable and Internet expenses and continuing down to groceries and his mortgage, he managed to squeeze out continuing savings.

An array of new startups, apps and Web-based tools make it easier than ever to manage your money while you're on the go. A report from Corporate Insight, which performs research for the financial services industry, found more than 100 new startups that aim to help people manage their finances, from learnvest.com to sigfig.com. In addition, new apps, including RedLaser, Shopular and RetailMeNot make it easier to track coupons and discounts while making purchases, so you're always getting the best deal.

No one likes staying on the phone for hours only to get an unsatisfactory resolution from the company you're calling. To protect yourself, try to stick with companies that are known for their stellar customer service. Top ranked companies – based on research by the Temkin Group, J.D. Power and Associates, Forrester Research and Zogby Analytics in partnership with MSN Money – include Amazon, Lowe's, Trader Joe's and Marriott.

Automatic savings are often the easiest way to put money aside without too much effort; diverting money into pre-tax retirement accounts directly from your paycheck or setting up an after-tax savings account are two popular options. Vanguard founder John Bogle calculates that most people need to save at least 15 percent of their income to be on track for adequate retirement savings.

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What the big money's buying in 2014

7:30 AM 2014, big, buying, money No Comments

| By Brett Arends, MarketWatch

Wall Street's money managers expect US stocks to keep rallying through the new year and bonds, gold and commodities to slump. But should you bet with them, or against them?

What does 2014 hold for financial markets? The world's biggest money managers are making some bold bets for the New Year, according to a new survey.

The big-money crowd is gambling that stock markets will keep soaring in 2014, that the U.S. dollar will rise, and that bonds, commodities and gold will continue to slump, according to the latest survey by Bank of America Merrill Lynch, which conducts perhaps the most authoritative survey of world money managers.

A net 54 percent of these asset managers remain "overweight" stocks in their portfolios, as they bet that markets will keep booming even following a thumping performance this year.

Meanwhile, a remarkable 64 percent remain underweight bonds, despite this year's sharp fall in prices and rise in yields, which ought to make bonds more attractive. Fears predominate that as the global economy continues to recover from the long economic slump and central banks scale back their support for the bond market, long-term interest rates will rise further and bond prices will fall.

A net 31 percent also enter 2014 underweight commodities, one of the most bearish readings on the asset class that the survey has found since it began asking about the asset class in 2006.

Money managers also remain bearish about gold, even though it has tumbled sharply in price this year, which ought, again, to make it relatively more attractive. On the contrary, the overwhelming majority of money managers told the survey that they believe the U.S. dollar is undervalued.

The survey gets even more interesting when you get down into the details. Money managers are huge bulls on technology stocks, despite a huge rally this year which has lifted the Nasdaq Composite Index ($COMPX) about a third, breaking 4,000 for the first time since the dotcom crash early last decade.

"Global tech is the most popular sector among investors by far," reports Bank of America Merrill Lynch, adding that among those polled, a net 48 percent were overweight technology stocks in their portfolios. It is the second-highest reading in nearly a decade's data.

Money managers are also betting that bank stocks will continue to rally as the global economy gets stronger.

Among the regions, money managers are huge bulls on Japan, where the net overweight is at near-record levels, and strongly bullish of U.S. and European stock markets as well. On the other hand, they are bearish about emerging markets, with a net 10 percent underweight the region. Brazilian stocks are especially unpopular, according to the survey.

Maybe I am excessively cynical, but the most interesting aspect of these surveys is how often money managers, in aggregate, turn out to be wrong. It's not always the case, but it frequently is: The assets they hate the most often turn out to do the best, and those they like the most often turn out to do badly.

One case in point: Last year in this very same survey, these managers were collectively very bearish on Japanese stocks. But for the year to date, Japan's Nikkei 225 stock index is up more than 45 percent, making it one of 2013's biggest success stories.

There is more than irony involved in this. These money managers move the markets: Bank of America Merrill Lynch polled 237 people who, between them, manage $655 billion worth of investments. And so if they all love a particular stock or asset class, they have already driven the price higher with their investments. The reverse is true for anything they hate.

Adding to the phenomenon is the managers' homogeneity. They all tend to read the same analyses. Their number-crunchers and asset allocators were all trained in the same business schools and rely on the same data and analytical techniques. As a result, they often think the same things.

So if the available numbers would lead conventional analysis to suggest, that say, frozen concentrated orange juice futures are going down, then almost all of these people will reach that conclusion. They will all pull their money out of FCOJ, and the price will collapse. But at that point the price may fall too far, and reflect even more pessimism than is justified.

The man who oversees the survey, Bank of America Merrill Lynch investment strategist Michael Hartnett, is well aware of these implications. He points out that contrarian investors will bet against the big-money crowd, especially when it makes really big bets on one direction.

If you're a contrarian, here are the bets to make for 2014. Scale back your exposure to U.S. and European stocks. Slash your holdings of Japanese stocks, technology stocks and banks to the bare minimum. Meanwhile, raise your bets on emerging markets (especially Brazil) and commodity and natural resource stocks. And hold plenty of bonds, and a little gold.

You pays your money and you takes your chances, as they say.

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