What the experts say

Tax rebate redux

If you missed out on the rebate checks Uncle Sam sent out last year, you may be get a second chance on your 2008 tax return, said Kimberly Lankford in Kiplinger.com. If you had a baby, you may even be able to get an additional rebate. Because of the way the stimulus plan was implemented, “those rebate checks that most people received last spring and summer were actually a tax credit for 2008.” But the IRS based those stimulus checks on 2007 income taxes, so changes in your income from 2007 to 2008 may make you eligible for an additional rebate. If you earned more than $75,000 in 2007 (or $150,000 for married couples) but made less in 2008, you may be able to get an additional bite of the apple. Adding a dependant can also affect the math. What if you ended up earning more? Don’t worry. “You don’t have to pay back the rebate.”

Forecasting for dummies

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“Fish gotta swim, birds gotta fly, and ­analysts and market strategists gotta try predicting what stocks will do every year,” said Jason Zweig in The Wall Street Journal. Yet they’re habitually wrong, which is why you shouldn’t bet your retirement on one man’s crystal ball. If you want to get a ­back-of-the-envelope estimate of where the market’s going, use this ultra-simple method, which is based on the forecasting method devised by the National Bureau of Economic Research. Simply add the dividend yield on stocks (currently 3.4 percent) to the annual rate of earnings growth for the past 20 years (3.4 percent), then tweak that estimated “investment return” based on investor sentiment. So, if investors are willing to pay a premium for stocks, returns for 2009 could be a little higher than 6.8 percent. They also look good in the longer run. Just don’t be surprised if the Dow suffers some jaw-clenching drops in the interim.

Going for gold, again

When investors get economic jitters, they tend to stock up on good old-fashioned gold, John Waggoner in USA Today. That explains why gold prices recently soared past $850 an ounce even though the usual gold-boosting stimuli—inflation and a weakening dollar—aren’t really factors right now. If you’re worried about inflation or suffer from general economic angst, buying gold may not be a bad idea. “Gold stocks and gold mutual funds are the best way to go,” if you can handle the occasional “heart-stopping losses.” For something less volatile, check out exchange-traded funds that track gold bullion. Convinced that we’re on the road to financial Armageddon? Gold coin is your best bet. “But don’t go overboard: A portfolio too heavily weighted with gold can sink like lead.”