What the experts say

Stocks: Why cash flow is key

When it comes to picking solid stocks, “cash is king” right now, said Jonathan Burton in Marketwatch.com. Cash flow, that is. When valuing a company, investors typically focus on corporate earnings, but at the moment, a “glaring lack of consensus” among analysts is making it “tough to get a clear picture on earnings prospects.” Instead, to gauge a company’s health, take a look at free cash flow, since that’s “money that can be given to shareholders in the form of dividends, used to buy back shares, or pumped into the business to boost future growth.” Even in good times, cash is one of the best indicators of value: It gives a big picture of the bottom line, and it’s tough to manipulate. “Earnings can hinge on ­assumptions and variables. Cash is cash.”

When banks take their time

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Banks that “take their sweet time” making customers’ deposits available can cause frustration for many, said Ron Lieber in The New York Times. Their delay can also lead to unnecessary overdraft fees. To keep banks from sitting on your money, use direct deposit and electronic transfers whenever possible; funds are then generally available within a day. If you do need to deposit an old-fashioned paper check, it will usually clear faster when deposited in person rather than via an ATM. Finally, if you need to tap in to funds quickly, simply call to find out exactly when they will be available. The answer may depend on who it is from. “Banks must make your deposits of local checks available no later than two business days after you hand them over.” For checks from out-of-state banks, however, they get five full days. Speed may also differ depending on your bank’s size. “Credit unions, in particular, tend to clear deposits more quickly.”

Bad news for grandpa

Seniors may have an unpleasant surprise in store come 2010, said Lisa Scherzer in SmartMoney. Social Security recipients have grown accustomed to a 2- to 3-percentage point increase in their checks each year, meant to cover cost-of-living increases. Last year, a spike in oil prices actually resulted in a 5.8-percent increase in benefits. But in 2010, the checks probably won’t go up at all. That’s because adjustments are based on the change in the consumer price index for wage earners, which has fallen since last year. The good news? Many seniors could “actually come out ahead of inflation,” since the prices

of most goods and services are down—with the notable exception, of course, of health care.