What the experts say

What the experts say

Shutting out identity thieves

Spooked by the possibility of identity theft, more people are “freezing” their credit reports, said Jane J. Kim in The Wall Street Journal. “The strategy isn’t a total answer to identity theft: For example, a freeze won’t stop someone from stealing your existing credit-card numbers and using them fraudulently.” But it will shut out thieves who want to open new lines of credit in your name. To apply for a credit freeze, you’ll need to contact each of the three credit bureaus and pay a $10 fee to each. You can lift the freeze at any time using an assigned personal identification number, but the process could take a few days. “Keep in mind that even if you don’t plan to borrow money, you may need to suspend a credit freeze to get an insurance policy, a cell phone or utility service, an apartment, or even a job.”

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The credit crunch ain’t over

At first the markets seemed to recover from August’s credit meltdown, soaring to new highs, said James B. Stewart in SmartMoney. “It was as if Fed Chairman Ben Bernanke had pulled out a magic wand, waved it to produce a half-point rate cut, and poof! The credit crisis was gone.” But this credit crunch still has legs. Now is not the time to scoop up great bargains in the mortgage and housing markets. “I don’t expect much visibility in the mortgage market before the end of the year at the earliest.” It’s also smart to avoid financial stocks altogether, as companies are still sorting out who owes what and how much they can expect to see. Recent earnings from JPMorgan Chase, Citibank, and Bank of America show that even the well-diversified behemoths are surprisingly exposed. In these turbulent months, “don’t fall prey to sharp swings in market sentiment.”

Why the elderly are bad investors

The emerging field of neuroeconomics puts the lie to any idea of the elderly as conservative investors, said Jason Zweig in Money. It’s long been noted that, rather than stashing their money in bonds or under the mattress, little old ladies (and men) fall for too-goodto- be-true offers or make off-the-cuff investment decisions. “As you grow older, your brain gets more impulsive; in some ways, becoming a senior citizen is like being a teenager again.” To make sure you or a loved one protects that nest egg, put up defenses. For one, shut out cold-calling brokers and money scams with Caller ID and e-mail spam blockers. Moreover, find a trustworthy financial advisor to fine-tune retirement plans. And look on the bright side: Neuroeconomics also says that older investors are “considerably better at withstanding the mental stresses of a bear market than younger investors.”