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What the experts say

Brother, can you spare a loan?; Now’s the time to sell; Banking unused vacation

Brother, can you spare a loan?
With credit still tight, don’t be surprised if a family member comes asking for a loan, said Linda Stern in Money. Feel free—just be sure you actually can afford to part with the amount needed. “You shouldn’t play banker if it means taking on debt or selling assets you’re not prepared to sell.” You’ll also want to vet the borrower, even if that involves asking difficult questions. According to a Money survey, 43 percent of readers who lent money to family weren’t paid back in full, and 27 percent “hadn’t received a dime.” Finally, agree on terms. Uncle Sam requires that you charge a minimum interest rate, and that you pay taxes on that interest. Ideally, you will be able to agree on a rate that is higher than what you’d currently earn on a safe corporate bond, but lower than what your loved one would pay going outside the family.

Now’s the time to sell
Since the Dow Jones started nearing 10,000, “I’ve been getting more and more questions from readers about what to buy,” said James B. Stewart in The Wall Street Journal. That’s the wrong question—smart investors should be asking what to sell. The market’s surprising spike makes this a good time to move out of overpriced stocks before another drop. In “a momentum-driven rally”—which this one seems to be—some stocks keep heading higher for no good reason. Investors in Tenet Healthcare, for instance, seem “unfazed by the talk of health-care reform,” as the stocks are up 40 percent from a month and half ago. Semiconductor maker LSI is up 15 percent. These are the sorts of stocks that “hard-core trader” types will be buying, in hopes of making just a bit more money before the music stops. So any investor focused on long-term, “value-driven logic” should be happy to sell at this price.

Banking unused vacation
If your company pays for unused vacation or sick days accrued each year, you may now have the option to invest that money, said Laura Saunders in The Wall Street Journal. “To encourage savings, the Obama administration recently blessed such transfers” to 401(k), Keogh, and profit-sharing plans. That doesn’t mean companies will be required to pay workers for unused leave. But some employers “may want to reconsider their policies”: Giving employees the option to bank their time off is a good way to boost compensation without increasing salary levels. It can also give businesses flexibility. They don’t have to do it every year, and can put a cap on how much time off employees are allowed to hoard. 

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