Some quick fixes can you save time, money


Published: Sunday, January 2, 2005 at 6:01 a.m.
Last Modified: Saturday, January 1, 2005 at 11:59 p.m.
Think globally, act locally.
This year brought home in some new and direct ways just how interconnected the world has become. The slumping dollar has had an impact not only on the investment landscape but also on the cost of travel and luxury goods. More affluent Chinese consumers began buying down coats - pushing up the price of exported down for U.S. consumers - while that country's strong demand for some commodities means Americans often are paying more to build and furnish their homes.
Not that the domestic scene isn't presenting challenges of its own. People who have flocked to adjustable-rate mortgages, hoping to save on monthly payments, may find themselves in the opposite position if interest rates continue to rise. And a barrage of cautionary notes about popular drugs this year have underscored the importance of being an informed patient.
What follows isn't going to prop up the dollar or bring back the Curse of the Bambino. But, as we have done on the cusp of previous years, our reporters have mined their beats for advice on investments and health and on how to save both money and time in your daily life. The tips cover a broad canvas: from doing a share on season tickets to sheltering your portfolio from a weakening dollar.
The Problem: Many economists expect interest rates to rise in coming months.
The Fix: Consider switching your adjustable-rate mortgage to a fixed-rate mortgage, or to a hybrid ARM, which has fixed rates for several years before turning adjustable.
Adjustable-rate mortgages have been popular in recent years in part because home prices have been rising and borrowers have been looking for ways to keep their monthly payments down.
Many short-term ARMs carry rock-bottom introductory rates, typically 2 percent or less. The low introductory rate generally only lasts for three to six months. After that, rates on ARMs that adjust monthly, for example, can rise to as much as 5.5 percent, according to HSH Associates.
Rates on loans with longer fixed periods haven't moved up nearly as quickly, making this a particularly good time to consider switching. Rates on adjustables that are fixed for the first five years now average 5.04 percent, according to HSH, while rates on loans with a 10-year fixed period average only 5.54 percent. Even 30-year fixed-rate loans aren't much more expensive, with rates averaging just 5.83 percent, according to HSH.
Anyone thinking about switching out of a short-term ARM should consider how long they plan to stay in their home and how costly it will be to refinance.
The longer you plan on being in your house, the greater the risk that short-term interest rates - and your mortgage payments - will keep rising.
- Ruth Simon The Problem: Keeping your portfolio safe from the weakening dollar.
The Fix: Put as much as a quarter of your assets into nondollar-denominated assets. The dollar was down against every major currency in the world in 2004, and economists are predicting another rough year for the greenback.
The easiest option for investors seeking to diversify into other currencies is to buy mutual funds focused solely on foreign stocks or bonds. The Dodge & Cox International Stock fund and T. Rowe Price International Bond fund are two standouts in their respective sectors.
Owning exposure to foreign currencies is another option. Investors can fairly easily open a foreign savings account at places such as Canada's Scotiabank or LloydsTSB Bank of the United Kingdom.
Domestically, Everbank.com offers savings accounts and certificates of deposit denominated in several different currencies.
If the dollar weakens, the value of your account - in dollar terms - will increase. Plus you get paid interest at rates often higher than in the U.S. Some experts expect Asian currencies such as the Singapore dollar and Thai baht to be big winners this year.
Investors also can buy inflation-protected government bonds denominated in Canadian and Australian dollars, British pounds and euros, among others. While many big brokerage houses will help clients buy these bonds, most online and discount brokers won't. Two exceptions: T.D. Waterhouse will buy such bonds for investors, while Charles Schwab will help clients buy individual foreign bonds in lots of $100,000 or more.
- Jeff D. Opdyke The Problem: Currency gyrations are driving up the price of your favorite European - and even American - wines.
The Fix: Try some lesser-known bottles from a place such as Argentina. In recent years, value-conscious oenophiles have discovered Argentine Malbecs. But a surge of investment is helping Argentina expand well beyond that grape.
Sommeliers and wine sellers are recommending Argentine Chardonnay, Cabernet Sauvignon and Malbec Syrah blends. Some of these wines sell for less than $10, compared with prices as high as $40 or $50 for a good European wine. (The prices of some California wines also have risen, as European consumers, armed with their strong euros, have driven up demand.) If you are committed to European wines, buy now. With the expectation of rising prices, U.S. retailers have stockpiled European wines and have been able to keep price increases down so far. Prices are expected to rise sharply in the second half of 2005.
- Andrea Petersen The Problem: You worry that your broker is ripping you off.
The Fix: Hire an ''hourly'' planner to look over your finances.
In the past year, the National Association of Securities Dealers has taken action against brokers for a variety of transgressions. They include not giving mutual fund investors the commission discounts they deserve, encouraging folks to mortgage their homes to buy investments and failing to disclose the risks and costs of variable annuities.
Worried that your broker might be pulling these or other tricks? To find out for sure, get a financial planner who charges by the hour to look over your brokerage statements. The hourly fees typically range from $150 to $300. It could take just an hour or two to analyze a simple portfolio, or as many as five hours if your finances are complicated.
Still, that is small potatoes compared with the losses that could come from persisting with a crooked broker. To find a planner who charges by the hour, try either Garrett Planning Network (www.garrett planningnetwork.com) or the National Association of Personal Financial Advisors (www.feeonly.org).
- Jonathan Clements The Problem: Season tickets are a major time and cost commitment.
The Fix: Take advantage of new rules that make it easier to share that burden with other sports fans, including reselling tickets you don't use.
In recent years, sports teams and ticket agencies such as Ticketmaster and tickets.com have become acutely aware of how often their tickets end up in the hands of ticket brokers and scalpers.
In a bid to reclaim some of this secondary-market revenue, sports teams increasingly are making it possible to effectively buy partial shares of season tickets.
Rules and fees vary by team. The San Francisco Giants, for instance, let season-ticket holders resell the tickets they don't want; both the buyer and seller are charged 10 percent of the final price.
The Boston Red Sox charge an annual $50 fee for access to its online ticket-reselling site; season-ticket holders can't sell their tickets for more than face value.
For fans whose teams don't have such sites, independent ticket-selling Web sites such as stubhub.com and razorgator. com provide a similar service. But unlike some teams, they let you sell your tickets for as much as the market will bear.
- Raymund Flandez

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