What the experts say

Is your tax guy legit?

It used to be that “just about anybody” could set up shop as a tax preparer, said Sandra Block in USA Today. “Not anymore.” As of this year, all paid preparers need to register with the IRS, and in coming years they will also need to pass a competency test and take continuing-education classes. Even so, it pays to do a little of your own digging. Make sure your preparer has a clean record with both the Better Business Bureau and relevant licensing agencies. Also, find out whether the preparer has represented clients in IRS audits. Some experience there is helpful, but too much could be a red flag. Finally, be leery of fees based on a percentage of your refund. Flat fees are the way to go.

Spending like it’s 1999

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When the wealthy cut back on their spending just after the financial crisis, the gesture was largely “symbolic,” said Ben Steverman in Bloomberg Businessweek. Now that the worst of the recession appears to be behind us, “conspicuous consumption is back.” The wealthy—who’ve benefited greatly from the 61 percent rebound in stock prices since the market’s March 2009 low—are “not only shopping again,” they’re flaunting it with prominent logos and bright colors. For those who can afford it, says A.T. Kearney’s Sherif Mityas, it’s once again “en vogue to spend money.”

Indexing: More than meets the eye

Index investing is supposed to be simple, said Jack Hough in SmartMoney. Rather than trying to beat the stock market, investors simply “link their fortune to the S&P 500, Russell 1000, or some other benchmark.” Recently, however, new approaches have raised questions about the wisdom of traditional indexing, which weights companies by their market capitalization and thus might favor companies whose share prices are already inflated. These days, investors can choose from a number of alternatives, including indexes that weight companies equally or, as in the case of Research Associates’ “Fundamental Indexing,” rank them based on such factors as sales, earnings, and dividends. There are still more indexes that “haven’t quite made their way from academia to the marketplace,” including one that favors low-volatility stocks and one that, conversely, favors high-volatility stocks. And you thought trying to pick a winning stock was maddening.