TipSheet

Beat Back the Bugs

Newsweek — Sat, 04 Oct 2008 20:39:24 GMT

By Karen Springen
October 13, 2008

Illustration: Michael Klein for Newsweek

For families, fall marks the start of germ-fighting season. Kids catch an average of one to two colds per month during the school year; parents catch fewer but suffer just as much. Mom and Dad miss work to care for their children, then end up missing more work once they catch what their kids brought home. And the cycle begins again. A series of runny noses and fevers may not land anyone in the hospital, but it can take a serious toll on productivity.

What are the best strategies for staying healthy during the cold-weather months? We all know that washing hands regularly and getting the flu shot are good places to start, though there is new information on those recommendations, as well. The Centers for Disease Control and Prevention now says all kids, ages 6 months to 18 years, should get the flu shot (previously, the recommendation had extended only to kids younger than 5), and doctors agree that you need to scrub and rinse your hands for at least 20 seconds in order to kill germs most effectively.

What about less scientific-sounding advice like wearing a sweater and chugging orange juice? TIP SHEET looked at the new thinking on some old wives’ tales.

• Wear a hat. True. Mom always said to bundle up before leaving the house, and it turns out she was right. If you’re dressed inappropriately, your core body temperature can drop, and that can lower your immune system’s function, says Dr. Ted Epperly, president of the American Academy of Family Physicians. Your body loses the most heat through your head, but wearing gloves or mittens will also help.

• Drink your O.J. True. There’s growing consensus that vitamin C helps people recover faster from colds, though it does not prevent them. A 2004 review of 29 trials involving 11,077 study participants taking at least 200mg of vitamin C daily showed an 8 percent decrease in the duration of colds among adults. That’s presumably because it strengthens their immune systems, says Dr. Russell Robertson, professor and chair of the department of family medicine at Northwestern University’s Feinberg School of Medicine.

But few experts recommend taking vitamin C supplements. Most Americans eat more than the U.S. recommended daily allowance of vitamin C—75mg per day for women (the equivalent of an orange) and 90mg per day for men. If you’re worried about your family’s diet, take a standard multivitamin, says Dr. Frank Greer, chairman of the American Academy of Pediatrics’ nutrition committees, and step up your consumption of fruits and vegetables. “Eating a well-balanced diet is much better than massive doses of vitamin C,” says Greer.

There is no proof that zinc or the herbal supplement echinacea work against viruses.

• Eat chicken soup. Maybe. “There’s been no scientific evidence that distinctly proves chicken soup helps you recover from colds,” says Epperly. “[But] the sense of mental comfort can’t be downplayed.”

Chicken soup does help with hydration, which is important for getting and staying well. “Good hydration maximizes the body’s function, almost like oil in the car,” says Epperly. “Your body is functioning better; you’re washing out toxins better.”

• Starve a cold, feed a fever. False. “We never starve you when you’re fighting an infection,” says Dr. Christopher Tolcher, a spokesman for the American Academy of Pediatrics. Don’t feel the need for feast—or famine. “Follow your own body’s cues,” says Epperly.

• Curl up by the fire. False. Relaxation is nice, but getting outside and exercising is a better way of preventing colds. “Keeping your body at its optimal health is what keeps your wall of immunity up,” says Tolcher, who recommends kids get 60 minutes of exercise each day.

If you’re sick, though, you should not waste your body’s infection-fighting energy on the treadmill. And, whether you’re sick or well, it’s important to get plenty of sleep. Tolcher advises that kids younger than 8 should get about 11 hours per night; kids 9 to 12 need 10 to 11 hours; and kids 13 and up need eight to nine hours. Adults need about eight hours. “Your body’s ability to fight off any infection will be enhanced if you exercise, eat a good diet and get good sleep,” says Epperly.

• The flu shot may help prevent other illnesses. True. “It so beefs up your immune system that there is a cross-coverage for other types of viruses,” says Epperly. The AAP recommends annual influenza immunization for caregivers of kids under 5. Then relax, sit back and sip some soup.

Best Organics for the Buck

Newsweek — Sat, 04 Oct 2008 20:33:11 GMT

By Karen Springen

October 13, 2008

Fewer Americans are buying organic. The number of people who regularly consume organic food and drinks dropped from 25 percent to 22 percent in the last year, according to a new report from consultant NPD Group. With the economy in the dumps, who can blame them? If you’re concerned about pesticides and added growth hormones but want to save money on groceries, knowing which conventionally grown items are highest in contaminants will help you prioritize.

• Milk. If you or your kids are big milk drinkers, it pays to buy organic. “There are so many hormones and antibiotics [in many brands of conventional milk],” says environmental activist Deirdre Imus, author of the “Green This!” series. Some studies have found organic milk to have higher levels of healthy fats and antioxidants, such as beta carotene.

If you don’t want to pay organic prices, get skim milk, since many pollutants concentrate in fat, says Richard Wiles, executive director of the Environmental Working Group.

• Beef. The government allows cattle—but not pigs and chickens—to be raised with added hormones. If you’re worried about these hormones, buy organic beef, which must be fed 100 percent organic feed and is hormone-free. Save money by sticking with conventional pork, chicken and eggs. For those who stick with conventional beef, the leaner the cut, the fewer the contaminants.

• Produce. The Organic Center (organic-center.org) and the Environmental Working Group (ewg.org) have analyzed U.S. Department of Agriculture tests of conventionally grown produce. The fruits with some of the highest pesticide levels are cranberries, nectarines, peaches, strawberries, pears and apples; veggies with the highest levels are sweet bell peppers, celery, cucumbers, tomatoes, peas and lettuce. Some of the least contaminated fruits are those with removable peels, like bananas, citrus fruits, pineapple, mango and avocado.

Washing and peeling removes some—but not all—pesticides, which can grow into the flesh of your food, says Dr. Alan Greene, author of “Raising Baby Green.” (Be wary of becoming a peeling zealot, though, since it makes foods less nutritious). Follow the USDA guidelines: wash your own hands to avoid contaminating food, rub the produce for 30 seconds under running water and use a clean towel to wipe off the produce. Then take a bite—or chop, cook and enjoy.

Should You Go Generic?

Newsweek — Sat, 04 Oct 2008 20:31:27 GMT

By Mary Carmichael
October 13, 2008

A new study says Medicare patients prefer cheap generic drugs only when they’re footing the bill themselves—when government pays, they want brand names. Recent news may shed some light on why: the FDA is investigating reports of faulty generic Wellbutrin, and last month it banned 28 generics made in India. If you’re taking a generic, should you switch to a brand name? Probably not. All generics, prescription or over-the-counter, go through a rigorous approval process. Generics are supposed to be “bioequivalent” to their costlier cousins (their active ingredients are equal in dose, safety, strength and efficacy). Although their inactive ingredients (such as flavors and dyes) differ, it’s very rare for those to cause reactions. Generics made in the United States are manufactured under the same standards as brand names. But the FDA has no authority to oversee those made abroad. (India and China make about a fifth of the generics sold here.) The agency’s only option is to ban those drugs and demand manufacturing upgrades, as it did last month. It also assured consumers there’s “no evidence of harm” from what’s already on the market.

Checklist: Our Top Picks for the Week

Newsweek — Sat, 04 Oct 2008 20:26:28 GMT

October 13, 2008

See “Dialogue Among Giants: Carleton Watkins and the Rise of Photography in California.” This exhibition of approximately 150 works by Watkins (who became the official photographer of the California State Geological Survey) captures the social, political, economic and artistic developments in California as it reached statehood in 1850 through the mid-1880s (through March 1, 2009; getty.edu).

Rent “Le Doulos.” Is JeanPaul Belmondo a crook or a police informant? In Jean-Pierre Melville’s tough, tricky, fatalistic 1964 film noir classic, nothing is as it appears to be, and the twists come as fast as a speeding Citroën on a rainy Paris street.

Hear “Only by the Night” by Kings of Leon. These Southerners have executed a fourth album that stays true to their hard-rock edge yet interjects raspy wails and guitar riffs with sweeping mellow tracks you’ll be singing in your head. Try: “Closer.”

Shop Target starting Sunday for the debut of its line of Anya Hindmarch handbags ($19.99 to $49.99) and Sigerson Morrison shoes ($29.99 to $39.99).

Get away for Columbus Day. Check smartertravel.com for a review of last-minute deals, including early-season ski trips, Oktoberfests and spas.

Correspondents' Picks: Toulouse, France

Newsweek — Wed, 01 Oct 2008 16:10:59 GMT

By Amber Haq

Nestled in the sunny southwest of France, Toulouse sits astride the Garonne River and the 17th century Canal du Midi, midway between the Mediterranean Sea and the Atlantic Ocean. The country's fourth-largest city, it is young and vibrant, home to three main universities and the European aerospace industry. It's a haven of creativity, and combines the Gallic charm of its rich history with the Latin warmth of its geography. Dubbed "La Ville Rose" (or "Pink City") for the dust-colored stones so prominent in its architecture, Toulouse is a city that will appeal to epicureans, who should savor its many delights slowly and by foot – for walking is a way of life here.

STROLL: Try the banks of the Garonne River for stunning views of Toulouse's historic monuments. Perhaps the most impressive of these is the 11th-century St. Sernin basilica. Allegedly the largest Romanesque church in Europe, it was consecrated in 1096 and features an eight-tier octagonal tower, five church naves and an upper cloister which forms a passageway around the impressive interior. The crypt contains relics of 128 saints, plus a thorn said to be from the Crown of Thorns – you'll have to ask the custodian permission to enter.

VIEW: Exquisite art is on display at the Fondation Bemberg, a private collection opened in 1995 and one of the city's most important museums. It offers an overview of five centuries of European art ranging from the Renaissance to the French Modern School. Paintings by Pierre Bonnard, Matisse, Pissarro and Monet grace the rooms of the 16th century Hôtel d'Azzézat which houses the collection. Contemporary art lovers should visit Les Abattoirs on the city's right bank – Toulouse's hippest crowds gather in this museum of modern and contemporary art, which once housed the municipal abattoir dating from 1831. The collection exhibits over 2,000 works by artists including Brassaï, Dubuffet and Picasso.

EAT: Toulousains take their gastronomy seriously. The city is home to a number of fine restaurants specializing in the rich, traditional southwestern French cuisine. For a hearty portion of the ubiquitous cassoulet, book a table on the terrace of Restaurant Emile – a local institution. For the sophisticated palate, the Michelin-starred Restaurant Michel Sarran offers an array of regional flavors, such as roast pigeon, Périgord truffles, oysters or foie gras de Canard de Gers (duck foie gras), presented with imagination and flair that is to be expected from one of France's master chefs. As for wine, head for Le Pere Louis – Toulouse's most convivial tavern dating back to 1889. Packed from apéritif hour, it offers a wide range of excellent wines, including Grenache Vieux (Au Pere Louis 45 rue des Tourneurs (00 33 5 61 21 33 45)).

SHOP: The city plays host to a hip and trendy shopping scene, but the most the most vibrant retail experience is the eccentric flea market at the bustling Place de Capitole, which is the city's main square. From vintage clothing to rare French pop albums from the 1960s, you'll meet some of the more colourful Toulousain stall holders, as you dig into their treasure chests.

DRINK: After a day of wandering the maze of cobblestoned lanes head towards a favourite Toulousain hot spot - bar brassere Le Bibent (5, place du Capitole). Sip the local speciality – a cooling sirop de violette (violet sherbet) admiring the sunlit glow of the stunning pink façades of the 18th-century municipal buildings around the square. It really is, la vie en rose.

Surviving the Storm: What’s Safe, What’s Not

Jane Bryant Quinn — Sat, 20 Sep 2008 16:26:16 GMT

Gimme Shelter: For now, money-market funds may be as safe as bank accounts
Illustration: Mark Matcho for Newsweek

If you’re scared, you have reason. We’re BATTLING a financial collapse in the teeth of a spreading recession, not only in the United States but in the other industrialized countries, too. The risks fall especially hard on workers in their 50s and 60s who are hoping to retire (or fearing it, if their companies are pushing them out). But anyone trying to defend a paycheck or personal investments will be facing tougher times. Amid the rubble, only a few things are safe.

Your insured bank account is safe. Some of the customers of struggling Washington Mutual are moving their money to other banks. That’s a waste of time. Deposits up to $100,000 are totally safe—insured by the Federal Deposit Insurance Corp. Odds are that WaMu won’t fail; it will be sold with government help. In cases of failure, the FDIC arrives on Friday night and moves the accounts to a new bank, which opens for business as usual Monday morning. Over the weekend, you can even use debit cards and ATMs. If there’s no buyer, the FDIC liquidates the bank, mailing out checks for insured deposits immediately. They will always be paid off. By contrast, uninsured deposits are at risk. If you have more than, say, $95,000 in your account, move the excess money to another bank so it, too, can be insured. No sense tempting fate. More than $100,000 can be insured in a single bank if you have different types of accounts—details at www.fdic.gov.
Your money-market mutual fund is safer than it was last week. Money funds serve as checking or savings accounts that pay higher interest rates than you’d get at a bank. Your money is supposed to be safe. For every dollar you put in, you expect to get a dollar back, plus interest, any time you want. These funds aren’t FDIC-insured, but, in their 37 years of life, they’ve never lost a penny for individuals.
That is, until last week. On Wednesday, the Reserve Fund group’s giant Primary Fund—owned by Bruce Bent, the man who invented the business—got stuck with $785 million in worthless commercial paper from the failed investment bank Lehman Brothers. The fund “broke the buck,” meaning that each dollar dropped in value to 97 cents. Redemptions were frozen for seven days, but not before $27.3 billion—more than 40 percent of Primary’s assets—flew out the door, according to Peter Crane, publisher of Money Fund Intelligence. The Primary Fund didn’t return calls.

The shock precipitated a run on other money-market funds, not by individuals but by professional investors. Putnam Investments’ Prime Money Market Fund closed, with fears of more to come. That presented a serious risk to the system: corporations rely on these funds to help finance their short-term debt. The government, with a gun to its head, announced, overnight, a one-year, $50 billion program to insure money-market funds against breaking the buck.

You have a second source of protection: the size and profitability of your money fund’s sponsor. Over the past 13 months, 20 other funds have suffered potential write-downs linked to bad investments, but they all were owned by large, diversified banks or brokerage firms that rushed enough money into the breach to make investors whole. The privately held Reserve group couldn’t come up with enough cash.

If you use a money fund, check its Web site. It should have a statement disclosing whether it’s exposed to any troubled companies. Vanguard and Schwab say they’re clean. Two T. Rowe Price funds sold Lehman securities at a discount but didn’t break the buck. Fidelity has some exposure to two subsidiaries of AIG, the insurance holding company now in federal hands, and Merrill Lynch, which is being purchased by Bank of America. It says it expects those investments to pay.

For a supersafe money-market fund, choose one that invests in Treasuries and other government debt. Their 12-month yield came to 2.2 percent, not much less than the 2.98 percent paid by funds that buy corporate securities. Tax-free money funds, at 2.2 percent, have been good buys for people in higher brackets, although there will be some muni casualties, too. Jefferson County, Ala., for example, is currently near bankruptcy, due primarily to a bad choice of investments.

The new money-fund insurance program may tempt some managers to make riskier investments. If they win, their bonuses rise; if they lose, the government pays. Stay away from them. That’s the kind of thinking that brought the financial system to its knees. Your eyes, laserlike, should focus on safety first.
Your AIG insurance policies and annuities are safe. The American International Group is the world’s largest insurance company. A shiver passed through customers, globally, when AIG had to be saved by the Federal Reserve with an $85 billion loan. But only the holding company failed, not its 71 insurance-company subsidiaries, which are solvent and regulated by the states. The firms that rate companies for financial strength downgraded the subsidiaries by one to three notches, but they’re still in solid investment territory, says Joseph Belth, an insurance expert and editor of the newsletter The Insurance Forum. If you’re holding an AIG policy or annuity, don’t replace it. You’ll pay fees to leave and more fees to buy coverage somewhere else. These insurers will be sold to help repay the government for its loan. Policyholders won’t get hurt.

If you’re shopping for new insurance, however, don’t entangle yourself with AIG. Look for top-rated companies with no recent downgrade on their records. After all, you’re counting on some kid not yet born to cut checks for you or your survivor 40 or 50 years from now.
Your brokerage accounts are safe. Lehman Brothers failed, but Barclay’s is buying its brokerage arm and your account along with it. Merrill Lynch found a home in Bank of America, again with its customer accounts intact. The Securities Investor Protection Corp. insures your brokerage account for up to $500,000 ($100,000 in cash) if your broker has to be liquidated and securities are missing, but neither of these firms has failed. However tattered, your account is still in place.
Your mutual fund is safe. SIPC doesn’t cover mutual funds, but the Investment Company Act of 1940 does. When you invest, your money goes directly to a bank custodian. The fund manager directs the investments but never holds the securities. So they’re perfectly safe, even if the fund management company fails. For this reason, you don’t have to bother splitting your mutual-fund money among several firms. Diversify among types of funds, but it’s safe to stay within a single fund group.
You can make yourself safer by delaying your retirement when stocks are going down. Prudent retirees plan to draw 4 percent a year, plus an inflation adjustment, out of their retirement funds to help pay their bills. Under such a plan, their money should last for life. But the early years are critical, says Christine Fahlund, senior financial planner for T. Rowe Price. You’re likely to run out of money in older age if stocks rise by an average of less than 5 percent a year over the first five years after you retire. Moral: in poor markets, hang on to your job (and your health insurance!) if you can. If you’re given the golden boot, look for part-time work. Just $20,000 in earnings is the equivalent of having an extra $500,000 in your investment fund, Fahlund says.
There’s no time like the present for deciding how much risk you want to take. It’s a little late to bail out of stocks. “Investors who reacted to Black Monday in 1987 locked in substantial losses that would have been reversed had they remained invested,” says Jay Hutchins of Comprehensive Planning Associates in Lebanon, N.H.

On the other hand, you need an intelligent balance between stocks and bonds (bonds have outperformed U.S. stocks since 2000, when the market bubble burst). Here’s a rule of thumb: subtract your age from 110 and use that number as the percentage of assets you should keep in stock-owning mutual funds. After that, just keep making contributions—murmuring to yourself, “I’m buying stocks cheap.” Retirees who are living on their savings should cut back on spending and take the minimum from their accounts. Don’t increase your withdrawals until your investments are even again. Andrew Orr of OrrGroup in Orlando, Fla., puts his budgeting clients into finicity.com—a great tool for spending control, he says.
Don’t retire until you pay off your consumer debt. “If you have debt, you’re living beyond your means,” says Jeff Kostis of JK Financial Planning in Vernon Hills, Ill. “It’s hard enough to make sure your money will last for the next 30 years. Why make it harder by continuing to pay for things you bought five years ago?” Bankruptcies are soaring among people 55 and up, says Harvard Law School professor Elizabeth Warren. They’re entering retirement with more debt and less medical insurance—a toxic combination.
Resign yourself to an economic storm. With tax cuts fading, consumers are running out of borrowing power, says Martin Barnes, managing editor of the Bank Credit Analyst in Montreal. He expects the economy to deteriorate significantly in next six months or so.

Typically, the Federal Reserve fights recessions by cutting interest rates, which helps consumers buy homes and cars. “But so far, that hasn’t worked,” says Lakshman Achuthan, managing director of the Economic Cycle Research Institute. Mortgage rates dropped but the banks won’t lend, the automakers cut back on leases, and credit-card lines are being chopped. Will a vast new bailout start the system up again? It’s devoutly—devoutly—to be wished.
One last thing that’s safe: your Social Security. With only small changes in benefits and taxes, this vital income-support program will see the boomers through old age. A few years ago, the dream was to put it in stocks and let folks take their chance. For your sake—or your mom’s sake—aren’t you glad we didn’t?

Reporter Associate: Temma Ehrenfeld

Credit Cards That Give Cash Back

Linda Stern — Sat, 20 Sep 2008 16:23:32 GMT

All the marketing mail you get about retail partners from your credit-card company may be annoying, but take another look. You may be leaving money on the table. Most major credit cards now have their own online shopping portals, stocked with big-name retailers like Target, JCPenney and Zappos. Click from the card company’s site to the merchant of your choice, and you can bump up the amount of money that shows up as cash back on your card. For example, use a Chase cash-back card to shop at Lands’ End through the Chase Rewards Plus program, and you can get as much as $15 in rebates for every $100 you spend. “These programs are a win-win-win,” says Justin McHenry of indexcreditcards.com, who reviewed several portals for NEWSWEEK. Here are four major programs available with no-fee cards:

Shop Discover (discover card.com/shopcenter). This is the most generous of the programs, according to McHenry. It offers cash rebates as high as 20 percent.
Chase Rewards Plus (chasecreditcards.com). An online mall with many of the same merchants offered by Discover, though the rebates aren’t always as good. Rebates earned via this portal don’t count against annual cash-back caps that the cards hold.
Citi Bonus Cash (bonus cashcenter.citicards.com). A similar program, but merchants on this site also give rebates if you use the registered Citi card in person at the store.
American Express Selects (americanexpressofferzone .com). It offers instant discounts on items bought through the Web site instead of rebates, which can sometimes be delayed by weeks or months. Some of the deals are for bigger items: travel deals, spa discounts and the like.

To make the most of these deals, you have to take the time to compare offers and resist the temptation to splurge on stuff you don’t need. Rebates are nice, but zero balances on your credit cards are even nicer.

The Stock Market and The Election

Linda Stern — Sat, 20 Sep 2008 16:21:20 GMT

The sinking stock market could be forecasting the results of the November presidential election— or vice versa. Stocks will behave differently after Nov. 4, depending on who wins. TIP SHEET’S Linda Stern asked Jeffrey Hirsch, editor of the Stock Trader’s Almanac, to read the tea leaves.

STERN: What does the year-to-date performance of the stock market predict about the election’s outcome?
HIRSCH: This is a stock market that was in trouble, even before last week’s sell-offs, and the malaise we’ve been experiencing makes the ouster of the incumbent party more likely. Strong Septembers and Octobers usually lead to an incumbent-party win. You would think despite the closeness of the polls that we still are going to see Democrats retake the White House.

Given all that you know about election-year patterns, how would you expect stocks to perform through the election and for the rest of the year?
Election years are traditionally up years. Incumbent administrations shamelessly attempt to massage the economy so voters will keep them in power. But sometimes overpowering events occur and the market crumbles, as it did last week. The bailing-out was too little, too late, and I think we’re going to continue to have market weakness through October. Once we have the settlement on the election, the market would be more inclined to be happy.

How do you expect stocks to respond to an Obama victory and a McCain victory?
The initial response from an emotional standpoint would be positive for an Obama victory and negative for a McCain victory. But that might not last.

What about next year?
This is going to be a very difficult 2009 for whoever is in the White House because of everything that has to be dealt with: war, the economy, the infrastructure, stock markets. Whoever it is, it will be rough. In terms of the stock market, Republican administrations do worse in the first year and Democrats do worse in the second year. They both do better in the final two years of the presidential cycle.

In general, do Democratic or Republican administrations produce better stock markets?
Contrary to conventional wisdom, the market has not done as well under the Republican presidents as Democratic presidents. However, under Republican Congresses they have done better. The best combination for the stock market is a Democratic president and a Republican Congress. Whatever happens in the White House, it’s likely that Congress will be Democrat, and that’s another reason to expect weakness next year.

Will different sectors do better under one or the other?
With Obama, I would expect alternative energy might get a little boost, and maybe some biotech, too, with the releasing of the conservative anti-stem-cell-research mentality. I think there might be a little bit more oil and defense with McCain in office.

Is Election Day itself a stock-market winner or loser?
It’s pretty neutral, but the day after is often bullish.

How Your Emotions Affect Your Investments

Linda Stern — Sat, 20 Sep 2008 16:19:52 GMT

Stock traders can talk about numbers all they want. But it’s emotions that move the market. Anyone who spent last week checking their 401(k), biting their nails, calling their broker and selling everything already knows that.

Now researchers are getting more focused on exactly how investors let their moods move their money. “There is an important relationship between emotional intelligence and investment behavior,” says John Ameriks, of Vanguard Investments. He’s seen investors engage in a host of self-defeating, psychologically driven behaviors.

Sometimes they simply freeze in the face of market turmoil. Or they trade too much. They fall in love with loser stocks they have chosen, and refuse to sell them until they’ve recovered—which may never happen. They follow the pack in and out of tech firms, real estate, oil-company stocks and the Dow, rationalizing that it’s safer to stay with the crowd. They bounce between fear and greed, buying high and selling low. People who are emotional tend to trade more often than people who are emotionally controlled, says Ameriks, and all that trading tends to be unprofitable.

You can study your own investing emotions by taking the personality tests at market psych.com; a basic investor test costs $20. If last week’s wild ride on Wall Street stressed you out, you can protect your portfolio from your own impulsiveness: use a financial adviser who will talk you out of your desire to cash out of the market right after it’s dumped 500 points. Invest via autopilot programs, such as retirement plans that will regularly put your money in balanced mutual funds without your having to make any decisions at all. Finally, accept your emotional makeup and adapt. If you’re a big worrier, give up on the idea of making a future killing and lock your money into safer spots, like bank certificates and Treasury bonds. You may not cash in on the next rally, but there’s value in a good night’s sleep, too.

When to Buy a Hybrid Car

Linda Stern — Sat, 20 Sep 2008 16:18:32 GMT

Car sales are flat, dealers are hungry and the price of gasoline is still threatening to revisit the $4-a-gallon levels it saw in July. Does that make it an ideal time to sell the clunker and spring for a fuel-efficient hybrid?

Maybe not. It’s true that as gas prices rise, hybrids will pay for themselves more quickly than they used to. But the combination of getting a low price when you trade or sell your existing car and the extra amount you’ll pay for a hybrid means it’s probably more cost-effective to keep the heap for a while longer. Even if you need a new car, you’d probably be better off buying a regular-engine compact car instead of a hybrid, suggests Jesse Toprak of Edmunds.com. Those regular compacts are almost as fuel-efficient as most hybrids and cost far less. The best candidates for saving money on hybrids are people who drive at least 15,000 miles a year, mostly in city traffic, and “keep a car until the wheels fall off,” says Toprak.

Don’t just take his word for it; do the math yourself. At politicalcalculations.blogspot.com, click on “Should You Trade in Your Gas Guzzler?” to find a calculator that allows you to consider all of the variables: how much you drive, and where; how much you pay for gas; and how much it costs you to keep up the current car. At Edmunds.com, you can check the true cost to own any car. You’ll learn, for example, that over five years, you’ll spend $3,405 more to own a hybrid Honda Civic than a conventional one. Even at $4 a gallon, it will take 8.5 years for that hybrid to start paying for itself. The most cost-effective 2008 hybrids, according to Edmunds, are the Toyota Camry, which will start paying for itself after four years and three months, and the Prius. The 2009 Camry Hybrid will start putting you ahead in less than four years.

Of course, there are other considerations. Some insurers will give a discount for covering hybrid cars. Some models are still eligible for federal tax credits (find them at fueleconomy.gov/feg/tax_hybrid.shtml). And driving a hybrid will shrink your carbon footprint. That’s worth something, isn’t it?

Web Sites About the Financial Crisis

Linda Stern — Sat, 20 Sep 2008 16:14:54 GMT

Don’t worry, get busy. These sites will help you figure out how to respond to the Wall Street tumult and how safe your money is now.

fdic.gov/edie: Use the calculator at this site to see how much of your bank deposits are insured.
sipc.org: Yes, your brokerage accounts are covered, to a point. The Securities Investor Protection Corp. lays it out.
naic.org: Find your state’s insurance rules and guarantees via the National Association of Insurance Commissioners Web site.
finra.org: The brokerage industry’s own cop explains what to do if your broker gets sold or goes belly up.
treasurydirect.gov: Feel like fleeing to safety? Here’s where you can buy Treasury bills and bonds.

How to Get a Free Credit Report

Linda Stern — Sat, 20 Sep 2008 16:13:09 GMT

A number of companies are starting to offer consumers free peeks at their credit scores, and not just their credit reports. That’s handy because it’s the score that lenders use to decide how much to charge in interest and whether to approve you for loans or credit cards.

You can get free credit scores at eloan.com, creditkarma.com and credit.com. The hitch is that they offer scores devised by the credit-reporting companies, mostly Trans-Union and Experian, and not the most widely used score developed by Fair Isaac Corp. (FICO). It will still cost you $16 to get a copy of your FICO score at myfico.com.

Why bother? If you’re getting ready to borrow money, your score can make a big difference—particularly in the current tight economy. A high score (760, say) can save you about $250 a month in interest over a middling (650) score on a 30-year fixed rate $300,000 mortgage.

It’s a good idea to check your detailed credit reports once a year. You can do that for free, without any strings attached, at annualcreditreport.com. Monitoring your credit report more often (at companies like the heavily advertised freecreditreport.com, which charges $14.95 a month) won’t prevent identity theft. Signing up for regular credit monitoring is just asking for a marketing blitz, says Steve Elias, an attorney with legal publisher Nolo. “Once you have identified yourself as someone who’s operating in fear, you’re a sitting duck for all those extras” like Internet security monitoring and lost wallet insurance. That’s one more reason to stick with the free services.

New Tax Rules on Second Homes

Linda Stern — Sat, 20 Sep 2008 16:09:23 GMT

Vacation-home owners are about to lose a sizable tax break. Until now, they could move to their retreat, live in it for two years, then sell and take full advantage of the capital-gains exclusion of up to $500,000 per couple ($250,000 for singles) that applies to primary homes. But Washington closed that loophole in the housing-relief legislation that passed this summer.

Under the new rules, that exclusion will be prorated by the amount of time the owner actually used the home as a primary residence. So if you owned the home for 10 years, but lived in it only the last two, you’d be able to exclude 20 percent of the gain.

The good news is that lawmakers made Jan. 1, 2009, the starting date for this calculation. So longtime homeowners won’t have to worry about all the years they enjoyed before that date. Someone who bought a beach house in 2000, for example, moves into it on Jan. 1, 2011, and then sells it in 2013 will still get to exclude about half his gain. That’s because the home will have been his primary residence for half the years when the measure was effective. Those who were planning to move to their second home can avoid the prorating process altogether by relocating before Jan. 1, 2009. Assuming they lived in their primary residence for two years before doing that, they will have three years to sell that home and use the full exemption.

The new rules will have the most impact on folks who buy vacation homes after the New Year, or who keep them as second homes for many years in the future. But look on the bright side: having to pay a capital-gains tax means you made money on the place. And, presumably, enjoyed it for all those years, too.

Checklist: Our Top Picks for the Week

Newsweek — Sat, 20 Sep 2008 16:03:30 GMT

See “Leonardo da Vinci: Drawings From the Biblioteca Reale in Turin” at the Birmingham (Ala.) Museum of Art. One of the most significant groups of drawings by the great draftsman, the works appear here for the first time in their entirety outside Italy (through Nov. 9; artsbma.org).

Hear “Rattlin’ Bones” by Australian husband-and-wife duo Shane Nicholson and Kasey Chambers. This raw country album has pitch-perfect harmonies, quick guitar and exuberant banjos, and will get any foot tapping. Song to wind down to: “Wildflower.”

Rent “Ken Russell at the BBC.” Early in his notorious career, Ken Russell reinvented the biopic on TV with these wild and marvelous dramatizations of artists’ lives. This collection features his feverish film on Isadora Duncan and the lyrical “A Song of Summer,” about Frederick Delius.

Pledge to brew your own coffee. In an effort to raise awareness about the environmental costs of our “takeout” coffee culture, Good Earth Coffee will donate $1 to the Trust for Public Land for every pledge received. Sign up at goodearthcoffee.com.

Eat Obama and McCain cupcakes and cookies from Mrs. Beasley’s. Choose a treat imprinted with the face or banner of your choice of presidential candidate (cookies: six for $21.95; cupcakes: six for $25.95; mrsbeasleys.com).

Correspondents' Picks: Todos Santos, Mexico

Newsweek — Wed, 17 Sep 2008 14:42:09 GMT

By Clara Zabludowsky

Framed by mango trees, palm trees and pink and blue haciendas, this oasis town, with its array of galleries, restaurants and uncorrupted natural beauty, offers visitors a breathtaking haven away from Baja’s more touristy locales. In 2006, Todos Santos was named a “Pueblo Magico” or magical village by Mexico’s Secretariat of Tourism. After a brief sojourn there, the town’s undeniable charm will leave no doubt as to why.

SURF or otherwise enjoy the sea at Los Cerritos beach, where the swelling waves are home to world-class surfers. It's also a prime spot for whale watching in the winter months. If you want to try your luck at riding the waves, check out Pescadero Surf Camp. Their certified instructors should have you up on the board in no time.

DINE at Café Santa Fe. Owned by Italian émigré Ezio Colombo and his wife, it is located in front of the main plaza. One of the best Italian restaurants in Mexico, the combination of the unbelievably fresh seafood, the Colombo’s fantastic homegrown organic vegetables and a full bar make for an unforgettable meal. Don’t miss the stir-fried shrimp and octopus with arugula and lime (Calle Centenario #4). For those looking for an authentic Mexican meal, one can do no wrong at Los Adobes. Dining is done al fresco within the wonderful setting of the restaurant’s own botanical garden. The cuisine is top-notch and an excellent opportunity for those unfamiliar with Mexican food to give some of the country’s best dishes a try. The shrimp sautéed in garlic and chile guajillo with a touch of white wine are a must, as is the famous seafood soup, which is made with organic vegetables and the catch of the day. Wash it all down with agua de jamaica, water made from the hibiscus flower, unique to Mexico and incredibly refreshing.

STROLL along Calle Benito Juarez, the main street. Begin your walk at the famous Hotel California. Though urban legend claims it as the inspiration for The Eagles’ song of the same name, these rumours have been shot down by Eagles’ singer and guitarist Don Henley. This, however, has not stopped a yearly pilgrimage of Eagles’ fans who make their way to this charming boutique hotel, which does nothing to dispel these rumors by blaring the infamous song on the sidewalk outside.

SHOP the many art galleries that line the streets. Galeria Indigo features a large variety of local art, from oils and acrylics to handcrafted jewelry. Colores de Mexico Gallery is a family-owned affair featuring the extraordinary photography of Pat Gerhardt and her daughter Christiana Parsons. A California ex-pat, Gerhardt’s work showcases the cultural and geographic richness of the region.

DRINK a michelada, the refreshing combination of beer and lime juice served in a salt-rimmed glass, at La Copa wine bar – the perfect place to watch the sunset. If you are willing to brave something stronger, go for Gran Centenario Plata tequila and enjoy the buzzing night-time ambiance that the congregation of ex-pats brings. Too much tequila? Check into one of the luxury rooms of the Todos Santos Inn. They are well worth waking up in.