There are more than 15,000 mutual funds to choose from! Knowing how to wade through this sea of choices can cause the best of us to throw up our hands in despair. The reality is, however, that evaluating a mutual fund is really quite simple. So if you have 60 seconds to spare, here’s how you can quickly evaluate a mutual fund.

1. Look up the fund: Go to Morningstar and enter the fund’s ticker symbol in the quote box at the top left. Press enter. This will take you to the Snapshot of the fund, which contains most of the information we’ll need for our evaluation. (Running total: 10 seconds).
2. Fund availability: The first item of business is to make sure the fund is still open to new investors. Funds close to new investors when the amount of money in the fund becomes too large to manage effectively given the fund’s investment objectives. In the fund’s Snapshot, look for the “Status” label, which will tell you if the fund is open or closed. (Running total: 15 seconds).
3. No-load funds only: Next, make sure the fund doesn’t charge front-end or back-end fees called loads. With so many excellent no-load funds, there is simply no good reason to pay a sales charge. What you need to look at is the “Load” on the Morningstar Snapshot. No load funds will show “none.” (Running total: 25 seconds).
4. Expense ratio: I’ve said it before, and I’ll say it again–expenses are one of the single most important factors in picking a fund. That’s why I avoid funds with sales charges, and why I seek funds with low expense ratios. My rule of thumb is not to pay more than 1% for actively managed funds and no more than 0.50% for index funds. Most U.S. stock index funds are considerably less, some around 0.10%. You’ll find the fund’s expense ratio at the top of the snapshot. For more on fund costs, check out How to Find The Hidden Cost of Mutual Funds (Running total: 32 seconds).
5. The style box: Before picking a fund, you should know what asset class you want to add to your portfolio. Are you looking for a large cap growth fund, for example, or a small cap value fund? You can read more about asset allocation in a series I’ve been writing. Scroll down from the top of the Snapshot and you’ll find the Morningstar Style Box. This will quickly tell you the market capitalization of the fund and whether its investments are value, core or growth. (Running total: 40 seconds).



6. Past performance: Much has been said about not relying too heavily on past performance. The truth is, much of our investing decisions are made on past performance, but with the recognition that we don’t know what the future holds. All of that is why, in my opinion, index funds should represent the core investments for must of us. That said, I always look at the 3, 5 and 10 year performance statistics of a fund as compared to its comparable index. The quick and easy way to get an initial assessment of risk adjusted performance is the Morningstar star rating. However, don’t rely just on the star rating you see on the Snapshot. Instead, click on the “performance” link just below the star rating. This link brings you to a more detailed listing of the fund’s performance, including comparisons to the relevant index, for 3, 5 and 10 years. I look for funds with three stars or better. Again, a more detailed analysis of a fund’s risk adjusted performance can be made, but the star rating is a good, simple place to start. (Running Total: 48 seconds).
7. Fund management: Particularly for actively managed funds, you want to see that the fund’s managers have been at the helm for a number of years. There’s no magic number here, but I like to see that a fund’s top management has been at the fund at least 5 years. Otherwise, the great performance the fund has enjoyed may be due to personnel who have since left the fund. Hitting the back button to return to the Snapshot will show you this information, including the name(s) of the managers and their start dates. (Running Total: 60 seconds).

Is there more to evaluate before actually buying a fund? Sure, but this initial assessment will go a long way to narrowing down the many options. And 9 times out of 10, this quick evaluation identifies the fund(s) I actually end up buying.

When in rains, it pours. Last week Bank of America announced a $5 fee to use its debit card. This week the Occupy Wall Street protesters are fanning out across the country, looking to unseat the bonus marchers in the history books. And now my own bank, Citi, has gone and raised fees on its checking accounts.

Beginning in December, Citibank’s mid-level checking account will cost $20 a month. And to avoid this fee, you’ll need to keep a minimum balance of $15,000 in your combined Citi accounts. Before this increase, the minimum balance to avoid the fee was just $6,000.

Citi will also assess a $15 monthly fee on its EZ checking account unless you maintain a minimum balance of $6,000. And Citi is apparently phasing out its EZ checking product, which was the first checking account I got from Citi nearly 20 years ago. And all of these fee increases are on top of a $2 fee hike (from $8 to $10) on its basic checking package announced last month. If you can meet the minimum balance requirements, however, Citi does offer up to a $400 gift card bonus on new checking accounts.

If you miss the days of no fee checking, don’t dispair. There are still plenty of banks that offer free checking accounts. Three of my favorite options are PerkStreet, Ally Bank, and ING Direct.

All three banks offer no fee checking accounts. PerkStreet comes with cash back rewards of up to 2%. And Ally Bank offers a checking account with absolutely no fees, not even ATM fees. So at least for now, we have some options.

Here is what others are saying about the onslaught of new fees:

Larger Checking Account Fees at Citi, But Bonuses Continue (via Deposit Accounts)

Citibank Jacks Up Monthly Fees On Checking Accounts (via the Consumerist)

Photo Credit: Nearest Neighbor

Imagine being out of work and desperately looking for a job. You come across a job opening that matches your experience and skill set perfectly. But there’s just one big honking problem. The ad says that the “unemployed need to apply.” What?!?

(Source: NYtimes)

And apparently this is a much bigger problem than you might think. President Obama proposed a solution in his $447 billion jobs bill (called the American Jobs Act). The bill seeks to ban employers with at least 15 employees from denying employment because the applicant is unemployed. The bill also would ban ads that indicate the unemployed are not eligible for the jobs.

Now the lawyer in me had to dig into the bill and actually find these provisions. And sure enough, if you slog to Title III, Subtitle D, you’ll find this–”Prohibition of Discrimination in Employment on the Basis of an Individual’s Status as Unemployed.” (You can find the full text of the bill here.) In fact, this subtitle has it’s own name, “Fair Employment Opportunity Act of 2011.” Section 374 includes a long list of prohibited activities, including those noted above. And if a company were to engage in any of these prohibit activities, section 375 provides an enforcement mechanism.

So why do some employer’s discriminate against the unemployed? It seems reasonable to me for an employer to ask about an extended period of unemployment. But to just dismiss out of hand anybody who hasn’t been recently employed seems silly. But it turns out this is a prevailing practice. I’ve found stories on this in the NYTimes, the Chicago Tribune, and CNN.

But what’s equally strange to me is President Obama’s proposal. Are we really going to prohibit companies from considering an applicant’s current job status? If somebody has been unemployed for say two years, it seems appropriate to me for the employer to seek an explanation as to why and to factor into its employment decision the effects of a long bout of unemployment on the applicant’s skills and experience. And besides, exactly how are we going to enforce this rule as a practical matter? The lawyer in me sees tons of frivolous lawsuits in our future.

So what do you think? Should employers be permitted to consider an applicant’s current employment status in deciding whether to extend an offer?

The McDonald’s Monopoly game starts today (September 27, 2011). I’ve been a big fan of this game ever since McDonald’s first launched this marketing juggernaut in 1987. So this year I thought I’d give you everything you need to know about the game, including how to play online, how to get free game pieces and your chances of winning the big prize.

Let’s start with how to play McDonald’s Monopoly, which has become more complicated over the years. The key is to keep in mind that there is an in-store game AND an online game.

In-Store Game

You’re probably familiar with the in-store game. You get two or four game pieces when you buy certain food and drink items from McDonald’s. You peel the game pieces to reveal either an instant win or a monopoly property you collect for a big prize.

Instant Win Prizes

Here are the instant win prizes for 2011 (with number of winners in parenthesis if available):

• $25,000 (5)
• $10,000 (3)
• $500 (750)
• $50 (5,000)
• $5 Walmart gift card (more than 1 million)
• $1,000 Walmart gift card
• $5,000 Walmart gift card
• EA Sports Ultimate Game Room (10)
• EA Sports Lifetime of Games (4)
• My Coke Rewards 30-Point Bundles (more than 1 million)
• Snapfish 4×6 Digital Photo Bundle (a few million)
• $10 and $50 Gas Cards (hundreds)
• 2012 Nissan Z (4)
• Kinect for XBox 360 Prize Pack (500)
• Redbox DVD Rental (a few million)
• Trip for 4 to the 2012 McDonald’s All American Games (a few)
• Trip for 4 to London Olympics (a few)

Collect to Win Prizes & Rare Game Pieces

And here are the ‘Collect to Win’ prizes, along with the number of prizes available and the rare game piece within the monopoly need to win each prize:

• $1 million* (1–Boardwalk)
• $100,000 (6–Ventnor Avenue)
• $50,000 (8–Kentucky Avenue)
• $100 (3,000–Vermont Avenue)
• $50 (10,000–Mediterranean Avenue)
• EA Sports Fan Trip (8–Short Line RR)
• 2012 Nissan Leaf (2–Pennsylvania Avenue)
• Caribbean Vacation (a few hundred–Tennessee Avenue)
• $200 SpaWish Gift Certificates (a couple hundred–Virginia Avenue)

*Did you notice the pesky asterisks (*) next to the $1 million prize? If you win the big prize, you won’t actually receive $1 million in cash, at least not right away. Instead, you’ll get $50,000 a year for 20 years. A great payoff for sure, but one that in present dollars is worth a lot less than $1 million.

Online Game

McDonald’s also has an online Monopoly game that you don’t want to miss. Here’s how it works. The game pieces come with an 11-digit code that can be entered online. You enter the code at www.playatmcd.com

Here is the list of prizes for the online game (with the number of potential winners in parenthesis):

• $10,000 (1)
• $5,000 (7)
• $50 (couple thousand)
• $1,000 Walmat gift card (a few dozen)
• EA Sports $10 prizes (100,000) and games (thousands)
• $50 gas cards (couple hundred)
• Snapfish digital photo prizes (hundreds of thousands)
• 2012 Nissan Z (1)
• Beach Resort Vacation (couple dozen)
• $20 SpaWish gift certificates (thousands)
• My Code Rewards Points (millions)
• Redbox DVD rental (hundreds of thousands)

How to Get a Free Game Piece

You can get a free game piece from Mcdonald’s:

A Participant can request a Game Piece without buying a food item at a participating McDonald’s location by mailing a legibly handwritten, self-addressed, stamped envelope (“SASE”) with sufficient postage and a return address, including first and last name, street address, city, state, and ZIP or postal code to: 2011 MONOPOLY Game at McDonald’s Game Piece Request, P.O. Box 49180, Strongsville, OH 44149-0180.

You’ll receive two game pieces (four peels).

Monopoly Sweepstakes

And if an in-store and online game weren’t enough, you’ve also got the sweepstakes. Each time you play online you receive one entry into the sweepstakes. For each five online plays, you receive and additional five entries. On or about November 14, 2011, a winner will be drawn from all entries. The prize is a MY 12 Nissan Z® Coupe Touring Model (MSRP: $38,210).

The Odds of Winning

The odds of winning with an in-store game piece is roughly 1 in 4. Of course the odds of winning go down as the value of the prize goes up. So let’s get to the big ticket item. Remember that for each color group, one of the properties is considered rare, which is how McDonald’s controls the number of prizes and odds. To win the $1 million, you need to collect both Park Place and Boardwalk. The odds of getting Park Place are 1 in 11. But the odds of landing on Boardwalk are 1 in 618,106,200.

For complete details on the odds of winning every prize, check out the official rules of McDonald’s Monopoly.

Good luck!

I love comeback stories. And Michael Vick is as good an example as you’ll ever find. Yesterday he signed a $100 million 6-year contract with the Philadelphia Eagles, $40 million of which is guaranteed. Boy has he come a long way, and there is a lesson here to be learned.

Recall that he spent six years with the Atlanta Falcons before being implicated in a dog fighting ring of all things. And we’re not just talking about a dog fight in the back yard. Vick had a serious operation going that even had a name–Bad Newz Kennels. And when the feds came in, they threatend to go after him under the Racketeer Influenced and Corrupt Organizations Act, better known in the mob movies as RICO. To make a long story short, Vick pleaded guilty. He spent 21 months in jail. With the loss of his NFL contract and endorsements, he was also forced to file bankruptcy.

Following his release from prison, he’s played with the Eagles beginning in 2009. Last year his work on the gridiron was considered phenomenal at times, and was clearly the best of his career. And now it’s payday for Michael Vick.

I love comeback stories. I don’t know if Michael Vick is a changed man. A crime like dog fighting has always been a mystery to me. I just don’t get the appeal. Stealing to feed your family I understand. But watching animals kill each other for sport and money is lost on me. But he did pay for his crime with money, time and reputation. Now he has fought his way back. And if Vick can come back from all that, we too can fight our way through financial difficulties.

But the real question, particularly for those Eagles fans out there, is this–Is he worth $100 million?

The United States doesn’t settle for second best. And that’s never been more true than our beloved country’s ability to rack up record-setting deficits. Yesterday, the CBO released its projection that the country’s deficit this year would total $1.3 trillion (that’s $1,300,000,000,000.00).

For you history buffs, a $1.3 trillion dollar deficit is “only” the third largest deficit our country has ever experienced. As the CBO explained:

The United States is facing profound budgetary and economic challenges. At 8.5 percent of gross domestic product (GDP), the $1.3 trillion budget deficit that the Congressional Budget Office (CBO) projects for 2011 will be the third-largest shortfall in the past 65 years

So how then did the U.S. deficit set a record? It set a record because the two years in which we experienced higher deficits were 2009 and 2010. Thus, 2011 marks the first time in our country’s history that the deficit has exceeded $1 trillion three years running (queue streamers and party horns).

And while those numbers are mind-numbing, nothing speaks louder than a good chart depicting our profligacy. So here is a chart from the CBO depicting our financial folly:

History of Deficit Spending

The CBO is also predicting high unemployment for the foreseeable future. The CBO predicts it will remain above 8% until at least 2014:

Projected Unemployment Rate

There is some “good” news. The CBO projects that deficits as a percentage of GDP will decline over the next ten years. Unfortunately, a lot of these projects depend on tax and spending policies, including the expiration of the tax cuts initially passed during the Bush administration. Here’s the CBO chart of these projections:

CBO Deficit Projections

The CBO also believes interest rates will remain low (good for borrowers; bad for savers). That means that rates for “high” yield savings accounts are likely to remain under 1%. But it also means that mortgage rates and interest on car loans will remain near historic lows:

Projected Interest Rates

Finally, the slideshow below shows all of the charts that the CBO released yesterday (you can expand the charts by clicking the button at the bottom right of the image):

The S&P downgrade of U.S. debt from AAA to AA+ reminds me of the Christian Bale’s character (Dicky Eklund) in the movie, The Fighter. We’ve been walking around like we’re the “pride of Lowell,” but now we’ve been slapped down to reality. If there’s any doubt about this, check out what China had to say about the downgrade:

China, the largest creditor of the world’s sole superpower, has every right now to demand the US to address its structural debt problems and ensure the safety of China’s dollar assets.

To cure its addiction to debts, the US has to re-establish the common sense principle that one should live within its means.

S&P has already indicated that more credit downgrades may still follow. Thus, if no substantial cuts were made to the US gigantic military expenditure and bloated social welfare costs, the downgrade would prove to be only a prelude to more devastating credit rating cuts, which will further roil the global financial markets all along the way.

(Source: Xinhua news agency)

And here’s the sad thing. China is absolutely right! We need to cure our addiction to debt. And if we don’t do it, the world’s financial markets will. How? Higher interest rates.

But back to the question at hand. Was the S&P right to cut its rating on U.S. debt? To put that question into perspective, let’s look at the spending cuts recently passed by Congress

A $2 Trillion Hocus Pocus

Recall that our friends in Washington spent months bickering over spending cuts. The eventual deal, which triggered the raising of the debt ceiling, “cut” spending over the next ten years by $2 trillion. That sounds austere, until you consider that the good folks in Washington use what’s called baseline budgeting.

As reported by Peter Ferrara of Forbes, The Congressional Budget Office tells us we are still on track to increase the debt over the next 10 years by $8 trillion. So while the $2 trillion “cut” slowed the craziness by a fraction, we are still borrowing and spending money like a drunken lotto winner.

So let’s review. Our representatives in Washington fought with each other right up to the debt ceiling deadline over a deal to slow spending by a measly $2 trillion, which will result in $8 trillion in additional borrowing over the next decade. We still have the Medicare problem. And we still have the Social Security problem.

The S&P’s Rationale

The battle of just $2 trillion in spending cuts paved the way for S&P’s rating downgrade. According to the S&P,

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

(Source: S&P Press Release (pdf))

I highlighted two key phrases in the S&P’s rationale. S&P focused on the government’s prolonged fight concerning a meaningful agreement on reductions to entitlement programs, increases in taxes, or both. In other words, the S&P was careful not to blame either party. Instead, it viewed the government’s epic battle over relatively minor spending cuts as an indication that the political divide will keep the U.S. from meaningful spending and tax reform.

Now, at first I thought this rationale was a bit thin. Let’s face it, the U.S. can always print money to pay its debts (at least to a point). But then I read the political reaction to the downgrade.

The Blame Game

Following the downgrade, both parties immediately blamed the other party.

Senator Reid of Nevada offered this explanation to the rating cut:

The action by S&P reaffirms the need for a balanced approach to deficit reduction that combines spending cuts with revenue-raising measures like closing taxpayer-funded giveaways to billionaires, oil companies and corporate jet owners. This makes the work of the joint committee all the more important, and shows why leaders should appoint members who will approach the committee’s work with an open mind – instead of hardliners who have already ruled out the balanced approach that the markets and rating agencies like S&P are demanding.

At first glance, this statement seems reasonable. Use the phrase “balanced approach” enough, and what’s not to like? But there are several problems with Reid’s statement: (1) the S&P did not call for an increase in taxes; it took no position one way or the other; (2) the “taxpayer-funded giveaways” Reid speaks of show just how unbalanced Reid’s approach is. “Taxpayer-funded giveaways” makes for a great sound bite, but it completely ignores real tax reform that this country needs. The fact is that the “rich” already pay a fortune in taxes. Should they pay more? Maybe. But Reid’s diatribe doesn’t move us closer to a solution.

The Republicans were just as bad. House Speaker John Boehner had this to say about the downgrade: “It is my hope this wake-up call will convince Washington Democrats that they can no longer afford to tinker around the edges of our long-term debt problem.” Now I agree completely that spending is out of control in Washington. But that’s just part of the problem. Let’s face it, the Bush tax cuts are a big part of our current debt problem. Yet Boehner and other Republicans won’t even discuss an increase in revenue.

And that brings us back to the S&P downgrade. If anything, the reaction of Reid and Boehner underscores why the S&P downgrade of U.S. debt was right on the money. Politicians are talking past each other, not with each other. They need to stop trying to score political points, and start a real dialogue aimed at solving the fiscal crisis.

ING Direct has decided to reward current and future account holders this 4th of July week by announcing a bonus that stretches across all of their products.  Beginning today and ending tomorrow, (11:59pm ET, Saturday, July 2nd) ING Direct is offering four bonus opportunities, each of which relates to the year the United States gained their independence from England.

ShareBuilder Online Stock Trading Accounts – $76.00 : Anyone interested in trading stocks online in the next two days should seriously consider opening up a ShareBuilder account.  To earn the $76 bonus, simply sign up for a new account and make one stock transaction.  That’s all there is to it.

ShareBuilder Electric Orange Checking Accounts – $126.00 : It’s difficult to find a high-yield checking account these days and ING Direct is looking to help you out a little bit.  All new Electric Orange Checking Accounts will have a $50.00 bonus applied on August 21st, if you make at least 3 qualifying purchases in the first 45 days of opening your account.  Qualifying purchases include debit card or person2person payments.  Then, an additional $76 is awarded after setting up direct deposits and having two of them clear your account by August 31st.

Easy Orange or Orange Mortgage Accounts - $1776.00 : Now we’re getting into some serious bonus money.  Apply and obtain approval for an Easy Orange or Orange Mortgage account through ING Direct today or tomorrow and earn $1776.00 off of your closing costs!  ING Direct already boasts low closing costs but this will reduce them exponentially and if your closing costs are less than this amount, you won’t pay a penny.

ING Direct is one of the few online institutions where all of your personal banking and loan needs can be met.  With the above bonuses only lasting until 11:59pmET July 2nd, 2011, time is already running out.  No bonus codes or promo codes are needed; everything is automated and considering the reputation of ING Direct, expect the bonus credited in a timely fashion.  ING Direct has covered savings accounts, checking accounts, trading accounts and mortgages, meaning everyone can find one reason or another to sign-up for and ING Direct account today.

In an article released earlier this week by the Associated Press, it was estimated that gas prices could fall by more than 50 cents a gallon this summer.  While this is certainly welcomed news, it doesn’t suggest just how high has prices can become by the end of the year.  During a typical year, gas prices surge during the spring, rescind during the summer, then slowly creep their way higher during the fall and winter months.  With regular unleaded gas prices currently averaging $3.96 across the country, the question is, will gasoline reach $5 a gallon before 2011 is out?

The simple answer is no, it shouldn’t.  With average gas prices expected to fall to $3.50 by summers end, the odds that gasoline will increase by 40% in just six months is terribly unlikely.  That’s not to say that some areas of the United States won’t experience $5 a gallon fill ups, but as a whole, the average price of gasoline at the end of the year will be similar to what you see now.  $4 a gallon.

The Cost of Gasoline Each Year

Depending on how often you drive your vehicle, the cost of gasoline could be of serious or no consequence.  Assuming for a second that you drive your car 10,000 miles this year, and your automobile averages 25 miles a gallon, that means 400 gallons of gas will be purchased.  At $4 per gallon, the total cost for fuel each year would be $1,600.  Increase or decrease any of these variables and the cost of your gasoline each year can vary greatly.  In fact, I think the above estimate is conservative and most Americans will spend more than this in 2011.

But as bad as you think you have it, know that in comparison, The United States actually has pretty cheap gasoline.  Most European nations pay much more than $4 a gallon for gas and we’re not talking pennies here.  Norway tops the list as the most expensive, consistently paying around $10 a gallon and countries like Denmark, Germany and Italy are paying $8 per gallon of regular gas.  On the opposite end, many countries do pay less than we do, and if you live in the Middle East or northern Africa, gas prices can be as low as $0.50 a gallon.  Even Venezuela benefits from cheap gasoline, generally because it is subsided by local government.

How To Decrease Your Gasoline Costs

As gasoline prices continue to increase, there are a few steps you can take in order to reduce the burden these rising costs have on your budget.  Two of the below suggestions are quite practical and one is a bit extreme.

Own a Gas Rewards Credit Card – Many credit card issuers are receptive to the fact that gas is one the rise and are enticing customers by offering increased gasoline rewards.  Some cards offer up to 5% cash back on ALL gas purchases so while Americans are paying $4 a gallon, you could be paying $3.80.  Over the course of an entire year, that’s a savings of more than $100 and some of these cards offer cash bonuses just for signing up.  Check out our regularly updated list of the best gas rewards credit cards.

Use Public Transportation More Often – In some instances, using public transportation rather than driving to your destination can be a real money saver.  Not only will you reduce the amount of money you spend on gasoline, you’ll also reduce the wear and tear on your automobile, saving you money in the long-run.  This method is not ideal in all situations, especially if you have a long commute to work but for anyone living in a big city, this is a must.

Live Without Your Car or Truck – The third and final suggestion I can bring to the table is to dump your automobile altogether.  Selling your car or truck will result in an instant windfall and the savings you’ll see each year will be in the thousands.  Without having to pay for upkeep, gasoline or unexpected emergencies, your budget will be a lot easier to balance each month and the only added expense will be from public transportation.  This option of course is only for consumers who don’t need an automobile to earn a living.

Anytime I watch the news (which is rare), I’m always provided a report on how out of control gas prices have become. Fortunately for a guy like me who works from home and leaves his apartment once a month, the increased cost of gasoline has no effect but for anyone who travels often, this can be a crippling expense.  Make sure you take all the necessary steps and lower your gasoline intake.  You’ll not only be doing the environment a favor, you’ll also be improving your finances.