What the experts say

Pass on the junk bonds

Investors have been bingeing on junk bonds, said Jason Zweig in The Wall Street Journal. “Goaded by the monstrous returns on junk—53 percent this year—and the miserable yields on cash, investors have put well over $20 billion into high-yield bond funds in 2009.” A year ago, when these risky bonds traded at about 61 cents on the dollar, their bargain-bin valuations justified the added risk that they could turn out to be, well, junk. Now that prices are closer to 92 cents on the dollar, buying junk isn’t worth the potential headache. “If you missed the happy hour, there’s not much point diving in after the good times have already rolled.” Besides, if you’ve already placed your money in a well-balanced mix of investment-grade bonds and small- and large-cap stocks, purchasing junk bonds could “muddy your asset allocation without adding a lot of diversification.”

How to haggle on a home

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Home buyers “clearly” still have the upper hand in most markets, but some of their sway may soon start to slip, said Lisa Scherzer in SmartMoney. Although most hard-hit markets, such as Florida, have far more homes for sale than buyers, in “a handful of California markets” some houses are actually fetching multiple bids. To make sure you retain negotiating power, don’t wait until after the holidays to find a house and make a bid; historically, there are fewer buyers in December and January. Also, seek pre-approval for a mortgage before you make an offer. Sellers are more likely to entertain a low bid if you already have financing.

Time to stock up on condoms

“If the guy in front of you at the drugstore is buying a case of ibuprofen, it’s probably not because he’s suffering from the mother of all hangovers,” said Sandra Block in USA Today. Now is the time of year when employees whose companies provide them flexible spending accounts must spend their pretax savings or forfeit the balance. If FSA money is burning a hole in your pocket and you take prescription drugs, ask your provider if you can order a three-month supply. If quitting smoking is a New Year’s resolution, pay for patches, pills, and programs before year’s end. There are also many over-the-counter items that qualify for FSA funds. You might also consider buying large orders of condoms and birth control pills. “Stop blushing and stock up.”