On Vacation until May

On vacation in Europe until the end of April. If I find cheap wifi hotspots during my travels, I'll log on to possibly write about my spending experiences. Otherwise, see you in May!

Icarra.com down: Wednesday April 16 2008

Could not connect
Count not connect to db

These are the words I see when trying to connect to icarra.com, the portfolio/performance tracking site I recently moved over to. I had originally used Cake Financial but it didn't properly track my basis positions when I transferred stock between brokerages. I don't think there's any easy method to track brokerage transfers, so I've done it manually through Icarra.com.

Apparently Icarra.com has had outages before, just like Zecco.com. I guess I get what I pay for (nothing but my time).

E*Trade Max Checking: 3.25% APY

I opened up an E*Trade Max Checking account today. It has 3.25% APY if you maintain a balance of over $5000. They also reimburse ATM fees if the withdrawal doesn't put your balance below $5000 as well. The $15 monthly fee is waived if you maintain a balance above $5000 or set up direct deposit of $200 or more monthly.

We'll see how long this 3.25% rate lasts. My credit union has steadily decreased its savings account yields each time the Fed knocked down the interest rate. What's funny is that the E*Trade savings account yield is only 3.01%. I suppose if you don't have $5000 saved to put into the Max Checking account, the 3.01% Savings account is still a good deal.

So far, this is the highest APY checking account that Bankrate.com listed in a search today.

Zecco web site unavailable: 11am EST Monday

Right in the middle of trading day. Zecco.com isn't for the avid trader, folks. I doubt this is for a "scheduled upgrade" as they say it is. Why didn't they do this on Sunday when the markets were closed?

I initiated a funds transfer from my checking account at 8:00am EST this morning, and a check on some the market today looks like there are some good bargains. So I go to Zecco.com and it's down. How unfortunate. I'm sure I'll see other days for good bargains over the course of 2008.

Tax deadline draws near

We already got our refund back in March. Having gotten married in 2007, we'd procrastinated in adjusting our withholding forms, so when we filed in February, we were due a hefty refund of nearly $3000. However, we'll have to pay almost $600 to California.

But we finally readjusted our withholding, so we'll probably be owing money for 2008.

IRS Withholding Calculator
California Withholding Calculator

I actually find the California withholding form more complicated than the Federal, but at least the calculators help simplify things.

We filed using TaxCut Premium. I bought the retail box CD and plan on keeping it. I had a 2006 filing from Taxcut, but 2007 could only import small amounts of data, and not display my whole 2006 return which I hadn't printed. So I had to frantically scrounge around looking for TaxCut 2006 software in order to print my 2006 returns from the taxcut file. Lesson: always print your tax return and also save a .pdf or .mdi of it.

Perhaps I'll go to web-only tax returns in the future. That way it's platform-independent. The reason I went to TaxCut is because the CD software can install on either Mac or PC. Going Online makes it even more cross-platform. I can imagine doing my taxes on my iPhone, but that would be overkill eh?

Market timing and portfolio diversity

I gave some anecdotal evidence earlier about market timing. Well, here's some actual empirical evidence in a study by a Michigan University Professor Dr. H. Nejat Seyhun.

95% of the market gains between 1963 and 1993 stemmed from the best 1.2% of the trading days

The index gained at an average annual rate of 11.83%, for a cumulative return on $1.00 of $23.30 over 31 years. If the best 90 trading days, or 1.2% of the 7,802 trading days, are set aside, the annual return tumbles to 3.28% and the cumulative gain falls to $1.10

In the 1926-1993 period, missing the best 5.9% of the months (a total of 48 months) would have created exposure to 83% of the risk of continuous stock market investing, but the average annual return would have been 19% less than the return on Treasury bills.

In the 1963-1993 span, missing the best 0.8% of the days (a total of 60 days in all) created an exposure to 94% of the risk of continuous stock market investing. In this situation, the average annual return would have been 11% less than that of Treasury bills.

Of course, I'm curious to see a similar study include 1993 - 2008, and see whether it still makes sense to always stay in the market. The dot-com boom & bust is my main scrutiny here.

Yahoo Finance Chart of Dow, Nasdaq, S&P 500 from 1/4/1993 - 4/1/2008

That chart shows that had you put money in the market in January 1993, and forgot about it until now, you would still be sitting on a 200% - 300% gain. The tech-heavy NASDAQ hasn't yet climbed back to its 2000 peak, but both the DOW and S&P500 have already surpassed their dot-com highs while pulling back a little during the beginning of 2008. Makes sense to diversify after looking at that, unless you're trying to time the market and strike it rich/bankrupt really fast.

Being human, we probably can't forget about our money, and emotions can easily drive us to panic sell and get out of the market during declines. For the Nasdaq in hindsight it was a good thing to do at the peak. But again, that would have meant you could time the market. The overused phrase from Warren Buffett "Be fearful when others are greedy, and greedy when others are fearful" are words I've taken to heart. I've even put them into practice during the recent market declines.

Random Rant

Have the markets recovered? Are we back in business? StocktradingToGo doesn't think so yet. The financial houses seem to have gotten past the worst, but I would expect that this is going to be more than just a pebble in a swiftly flowing stream. Interest rates are again very low, but banks are now reluctant to lend after taking such massive losses in the subprime market.

The bailout of Bear Stearns was upsetting for me. I'm thinking selfishly I suppose, but really, I wish they would have taken their punches like men instead of begging for money. I suppose if they did go down, it may have snowballed into a massive chaotic panic in the streets. Who knows. What's really disgusting is the CEO still cashes out with millions of dollars, leaving existing employees and shareholders holding the short straw. Who ends up footing the bill for the Bear Stearns bailout? Me. You. Taxpayers across the country. WTF?

Icarra.com portfolio tracking

Thanks to the first commenter on my blog, I was referred to icarra.com, a free portfolio tracking site. It's my first hour using it, but here's my Scottrade IRA account. I'm a Motley Fool subscriber, so pretty much my whole IRA contains picks from them. But back to Icarra.



Icarra gives me a portfolio breakdown by sector, so I can see where I might be overweight. I share my portfolio by NAV, which means now my whole IRA looks like a single Mutual Fund for the public to track as well. I don't know the mathematics behind NAV calculation, but Icarra makes it easy.

I imported my Scottrade transactions via .qif (Quicken). However it's a beta feature for Icarra currently, so all my Sell transactions had double-negatives, which treated them as positive cash and positive share additions. So I had to remove all the '-' symbols in the Sell transactions that were imported.

Icarra doesn't understand my Call/Put options, but that's small $ so I didn't worry about too much. Overall, the web site is a bit plain, but gives me a good tracking method for my portfolio. I might start using this over Cake in order to watch my taxable investment accounts as well, and comparing them with the S&P 500.

Apparently, Icarra also doesn't show the current day's performance until later in the night? The markets are closed after a huge rally today (4/1/2008), but I can't get it to show me performance statistics past 3/31/2008.