Do you really know what you’ve agreed to when you set up a new email account or try to make career connections at a social-networking site?
There’s a lot of fine print that you may not have paid much attention to. Networking sites, for example, typically claim ownership of the emails, pictures or videos that users post on their sites. Yet, users often don’t realize this because it’s buried deep in privacy policies that can run thousands of words long.
While most of the terms of these agreements can be fairly innocuous, there are times when web sites cross the line. Facebook recently found that out the hard way. Earlier this month, the popular social networking site changed its privacy rules, giving itself the right to own or use any information posted by its users — even after the information has been deleted. When word got out about the change, users revolted — and Facebook recanted, reverting back to its old rules.
SmartMoney.com set out to learn just what you’re committing to when you click the “I agree” box at some popular web sites. While some, like Twitter and Google’s Gmail, let users retain all rights and ownership of their information, others not only have the right to own and make money off users’ content, but also include indemnification clauses that say the user is on the hook to cover any legal expenses if the site is involved in a lawsuit based on that content.
To give a sense of how much legalese you’ll need to wade through to figure out the terms at these sites, we measured the length of their policies in words. After reviewing each site’s terms and consulting with privacy experts and web advocates who study user policies, we also assigned each site a privacy rating of 1 to 5, with 5 being the most consumer-friendly. (Want to decipher the fine print yourself? Read story to learn what you need to know.)
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Check out this article from CNN Money. I have to agree with this for the most part. I am personally still very carefully investing at this time. I am not saying to throw your money away. I had a friend tell me a few weeks ago that they bought stock in a company for a certain price that I KNEW didn’t have the liquidity required and had taken government bailout funds. I told them that it wasn’t wise, they told me I was stupid, they now have one tenth of their invested sum left.
Now with that said, I also believe that this is a good time to be investing. Don’t invest for tomorrow, don’t invest for next year. Invest for the next 5-7 years. And don’t simply “hold” those investments when the start to go up in value. Sell them when they make the return they should and move again.
Again, this is not for the faint of heart and not for anyone to use money that they should be using to pay bills, however, if you have funds that you can stash away for a few years, now is a great time to enter the market. I mean, at least at this point, you aren’t expecting a 50% plunge on everything you invest in.
And if I am wrong, I will pay the price. But… If I am right, I will be the one celebrating in the sun!
Be wise. Do your research and slowly debate investing with those retirement funds that you won’t need for the next few decades. Read this article and see if it gives you a bit of new perspective.
Just a thought,
Zeroing in on an arbitrary number – in this case 10 – can blind you to the short- and long-term gains that stocks have provided.
You’ve no doubt heard the term “lost decade” to describe what’s happened to stocks since 1999. And that may have you wondering whether equities are worth the risk and whether buy-and-hold investing, dollar-cost averaging and dutifully contributing to your 401(k)’s mutual funds are a sucker’s bet.
That’s understandable. But what if I could show you that instead of losing ground, stocks have been rising modestly in recent years? In fact, what if it turned out that even with today’s depressed prices, equities have been returning 4% annually – a modest sum to be sure, but better than cash nonetheless?
Rather than shun stocks, might you put new money to work in the market by rebalancing or by being a bit more aggressive than usual to take advantage of valuations approaching once-in-a-generation lows?
Then it’s time to expose the fallacy of the lost decade.
Rosier colored glasses
Yes, it’s true that the Dow Jones industrial average sits more than 1,000 points below where it was 10 years ago. But that’s irrelevant to your investing strategy for three reasons. First, it’s an arbitrary amount of time. We’re hung up on it because 10, as University of California-Berkeley finance professor Terrance Odean notes, “is a nice round number we can all relate to.”
Second, the market’s performance over the past decade is a red herring because the period you’re judging starts near the absolute pinnacle of irrational exuberance, when stock valuations – as measured by price/earnings ratios – were absurdly high. If you measure from the end of the last bear market, in October 2002 – when stock prices were still higher than average, by the way – you’ll see that the Dow has returned 4.5% a year (including dividends) while the Standard & Poor’s 500 index has gained 3.4% annually.
Third, as T. Rowe Price financial planner Stuart Ritter notes, “The only people the lost decade accurately applies to are those who invested absolutely nothing before the late 1990s, put all of their money in at the market peak and invested absolutely nothing ever since.” If such an unlucky soul does exist, history suggests that he’ll be rewarded. As the graphic shows, even money invested at a moment of high valuations – before the 1973-74 bear market – grew substantially over time.
Focus on what counts
None of this is to suggest that stocks will rebound tomorrow. Predicting short-term movements is a fool’s errand. The point is that rather than obsess over how the market has done since a meaningless date, you should focus on the long arc of your investing effort.
The annualized long-term gain for stocks over the past 25 years stands at around 10% – despite last year’s 30%-plus drop. Over the past 15 years, the S&P is up around 6%. That still beats bond funds and cash. Of course, to realize those gains you had to have stuck with your plan through the market’s ups and downs. That’s one more reason to look at the lost decade in a different light.
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It was over 10 years ago that Bank of America lost my last $200 that I placed in their care. They said it was a computer glitch and that there was no proof that I ever had deposited it. The kicker is that I had been working for Blood-n-Fire in Atlanta and that was the last of the cash I had. I placed it in the bank believing it was safer there, than in my small “cut” or room where I stayed that had no windows in the sills and at that time, no door to stop anyone from coming right off the street and taking it.
From that moment on, I have prayed for a cleansing to come to the system. One that allowed each and every small person a voice. That has come today.
Folks, I know times are tough, but let’s not tuck our tails and go into a corner, let us recognize the opportunities around us to make change while those that have tyrannically lorded over the weak are now weak themselves.
It’s at this moment, that I am now an investor in said institution and PRAISE GOD, guess what, this voting season, hello BofA, I HAVE A VOICE!!!!!
Isn’t it amazing?! All these years later and now they will listen!
My prayer today is, “LORD, comfort the afflicted and afflict the comfortable!”
With Corporate America on the ropes, shareholder activists are hoping for big victories this proxy season, particularly on measures tied to executive pay.
At long last, angry shareholders may finally have their day.
In the coming weeks, investors will find themselves steeped in the annual ritual known as proxy season, a time where corporations give stockholders a rundown on their operations and discuss other issues near and dear to investors’ hearts.
This year, shareholders, particularly those at major banks and other financial institutions, have a litany of grievances related to the current economic crisis: inadequate risk management practices, insufficient oversight by board members and oversized pay packages doled out to some bankers.
And that’s to say nothing of the value of their stock holdings, which are just a fraction of what they were a year ago.
“Investors are angry about the losses they have suffered,” said Amy Borrus, deputy director at the Council of Institutional Investors, a non-profit association of public, union and corporate pension funds. “But there is a sense of increased opportunity. Suddenly, a lot of what shareholders want seems to be coming their way.”
One concession that investors are aggressively angling for is for Corporate America to make big changes as to how they determine executive pay.
Shareholder activists have pitched dozens of measures so far this year aimed at giving investors a vote, or a so-called “say on pay”, when determining compensation packages for senior management.
From embattled institutions like Citigroup (C, Fortune 500) and automaker General Motors (GM, Fortune 500) to consumer products giant Colgate-Palmolive (CL, Fortune 500) and computer maker Hewlett-Packard (HPQ, Fortune 500), investors have ratcheted up the pressure in the hopes of more closely aligning executive pay packages to a firm’s overall performance.
Such measures have failed to garner broader support in recent years due largely to a lack of consensus on the issue among large institutional shareholders, such as public pensions and mutual funds.
Activists may get their way
But that may be changing as shareholder activists win over other hard-hit investors. In addition, now that the government owns stakes in many large banks, the interests of shareholder activists are now closely tied with that of taxpayers and lawmakers.
Outrage over unchecked spending by financial firms that took in billions of dollars in government aid not only prompted the Obama administration to institute executive salary caps for companies seeking additional assistance, but also a last-minute addition to the recent stimulus package that would rein in bonuses for top earners at firms that received money previously.
That could prompt many companies to put a “say on pay” measure up for a vote at their annual shareholder meeting this year. Some corporate governance experts even anticipate it could become law before long.
In the meantime, some investor groups are hoping to harness that hostility. The AFL-CIO and the Firefighters’ Pension System of the City of Kansas City, Missouri, for example, are just two organizations that have taken aim at other alleged compensation abuses this proxy season, including the practice of “golden coffins” where exorbitant payments are made to executives’ estates, after their death.
Measures aimed at pushing companies to take a “greener”, or more environmentally friendly approach, are also expected to remain in the mix this proxy season, as well as proposals that would require companies to disclose their political contributions.
Still, much of the focus will be on rooting out the problems that may have helped contribute to the current economic woes, said Richard Ferlauto, the director of corporate governance and pension investment at the American Federation of State, County and Municipal Employees, or AFSCME.
Ferlauto, whose organization has been heavily involved in trying to curb runaway executive pay, is among those pushing for greater oversight at the board level, particularly among financial services firms.
Two ways that could be done is by forcing companies to elect an independent chairman and also requiring that directors win a majority vote from shareholders before they are elected.
“There will be a laser-light focus on how to fix executive compensation,” said Ferlauto. “But a broader and recurring theme is how do you make boards more accountable to shareholders so this disaster doesn’t happen again?”
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Ok, so the orientation is wrong, but you have to watch this really cool video. Anna crawled up into my lap while no one was paying attention and I picked her up between beats and totally kept ripping the djembe! Now, that is COOL!
Right in the middle of the worship set!
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Connecting People to God and each other. A Vineyard Community in Rockville, MD outside Washington, DC.
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