Parchayi.com - Personal Finance Simplified

In case you missed it the first time around, now is an even better time to get into financials. WB now sports a dividend of 8.3%. It is unlikely that the bank will cut its dividend and even if it halves the dividend to 4.2% that is still better than the best non-promotional savings rate you can find. The best I found was Amboy Direct at 3.75%.

Also it is likely that the Fed will continue it’s rate cuts and bring down savings rates even further and making large financial stocks even more attractive. e.g. BAC (6.75% Dividend). Even Citigroup after it’s dividend cut yeilds over 5% now (not that I’m recommending it, just pointing out the dividend).

If you feel uncomfortable about financials, maybe you cna look at other dividend paying stocks which have been battered - MO - 4.1%, KFT - 3.45%. Even INTC is paying 2.5% at current prices. So if it pays dividend and is unlikely to cut the dividend, you are probably good for the long run. For the next year or two however, be prepared for a rough ride.

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I finally started doing my taxes. I’m using taxact again this year (because it is free) like I did last year but taxact won’t let me import last year’s data unless I pay for the Deluxe version. Anyway so I filled out my information again. It is a pain in the ass calculating the purchase price of stock I sold because I bought it at various times over the past few years and it was even more difficult with the India Fund because I bought and sold funds in ther rights and repurchase offers.

Last year I compared tax returns from TaxAct and TaxCut and found the return to be identical. This year Taxact has calculated that I owe 2000 to the taxman :(, hopefully Taxcut will calculate something nicer. This plus some other unforseen expenses and a stock market that seems to be going nowhere this year are probably going to make it difficult to meet my annual goal but I’ll keep it intact hoping that some of my web/consulting ventures will make up for things.

P.S. Keep a watch here for coupons for Taxcut and Turbotax. I’ll post them if and when I find any.

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Now that the market is taking a downturn, what should one do? I’m mostly hanging on to what I have and buying internationals and financials at every major drop. Now is a good time to get into India Funds which are way off their highs. Also both Wachovia and Bank of America do not plan to cut dividends (at least so far) and this might be a good time to get in. Just wait for drops like today and buy.

Another promising area looks to be tech - GOOG, AAPL are well below their highs and may be good buys now. I’m hanging on to my stock and might get some more if they fall further.

* Disclaimer: I own WB, AAPL, GOOG, IFN and INP. Take this advice at your own risk.

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