Gunning Daily News

Investing: Is Your Mattress the Safest Bet?

April 1, 2011 6:15 am

RISMEDIA, April 1, 2011-During the most recent stock market reversal many equity investors panicked, selling stocks at the depth of the market and adopting investment strategies that they perceived would be safer and yield better returns than were available in a declining market by either investing in bonds and money market funds or simply holding on to their cash-so-called "mattress" investing.

The rationale behind mattress investing is that by holding cash rather than keeping it invested in declining equities, as many Depression-era families did by stuffing cash in their mattresses, the asset will retain greater value.

But did that strategy earn safer and higher returns? No, according to new research by National Center for Policy Analysis (NCPA) Senior Policy Analyst Pam Villarreal, which shows returns to equity funds outpaced any of the alternatives.

"Every investor has a comfort level when it comes to investment risk," says Villarreal. "But selling all stocks and holding the cash is a sure way to lock in a loss."

Indeed, Villarreal's research showed that equity funds outdistanced any of the alternatives, with the Dow Jones Industrial Average (DJIA) gaining more than 77 percent from March 2009 to January 2011. In March 2009 alone, the S&P 500 posted its largest 10-day gain since 1938, and in November 2010 the DJIA topped 10,000 for the first time since September 2008.

In fact, returns for consecutive $100 tax-deferred monthly 401(k) contributions from December 1, 2008 to December 31, 2010 vary significantly:

Contributions to a traditional savings account invested in money market funds would have yielded $21; an after-tax return of 0.71 percent

Contributions to a bond index fund would have yielded $140; a 5.39 percent return

But a contribution to an S&P index fund would have yielded $783; a return of nearly 26 percent

"Panic stock selling is a normal reaction by investors when markets turn jittery, but it can cost investors thousands of retirement dollars," Villarreal adds. "If investors do sell, even if it's to stash their cash under the mattress, the sooner they return to stocks, the more money they will have for retirement."

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Expect to Pay More for Travel This Summer

April 1, 2011 6:15 am

William J. McGee

RISMEDIA, April 1, 2011-Travel industry experts are in agreement on one thing: Consumers will be paying more for airline seats, hotel rooms, and rental cars this summer. Rising fuel costs have led some analysts to revise their forecasts, but they all predict travelers' wallets will be lighter than in 2010.

Here's what to expect:

Airfares. Whether you're looking short-term or long-term, prepare to pay more for an airline seat this year. For spring vacations, the "fareologists" at Bing Travel estimate the average ticket price will be 10.5 percent higher than in 2010. American Express notes that domestic ticket prices rose "significantly" in 2010-up 21 percent in economy and 39 percent in business class-and recently predicted airfares are "likely to remain on an upward trend" this year. Similarly, Advito's 2011 Industry Forecast calls for economy class increases of 7 percent within North America and 6 percent internationally. Earlier this month, the International Air Transport Association revised its 2011 worldwide forecast due to rising oil prices, but still predicted better revenues for North American carriers, which translates into higher fares.

Hotels. STR, a leading hotel industry analysis firm, predicts good news for the lodging industry this year, which means higher prices for you; average daily rates will increase by 6.8 percent (up to $109.16). Meanwhile, PricewaterhouseCoopers also forecasts average daily rates will increase this year, by 5.1 percent. American Express predicts that rates for non-business travelers will rise this year as well.

Car rentals. There's mixed news here. On the one hand, American Express predicts base rates will remain the same this year, or might even decline by as much as 2 percent due to excess inventory. However, Amex also notes: "Higher cancellation charges and new taxes and fees could drive the actual price per trip higher."

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Housing Survey Shows Key Changes in Americans' Attitudes toward Housing and the Economy

March 31, 2011 8:45 am

RISMEDIA, March 31, 2011-Fannie Mae's latest national housing survey finds that Americans are more confident about the stability of home prices than they were at the beginning of 2010, even though they lack confidence in the strength of the economy.

Over 77 percent of respondents believe housing prices will hold steady or increase over the next twelve months, up from 73 percent in January 2010; but almost two-thirds still believe the economy is on the wrong track, virtually unchanged (61 percent) from the beginning of last year.

The Fannie Mae Fourth Quarter National Housing Survey-conducted between October 2010 and December 2010-polled homeowners and renters to assess their confidence in homeownership as an investment, the current state of their household finances, views on the U.S. housing finance system and overall confidence in the economy.

"Over the course of the last year, we gained deeper insights into Americans' confidence in the strength of the housing market and the economic recovery," says Doug Duncan, Vice President and Chief Economist of Fannie Mae. "More Americans believe that housing prices will remain stable over the next year. We are also seeing encouraging signs in the positive attitudes toward homeownership among younger Americans, despite the severe impact of the housing crisis on Generation Y. But most respondents to our survey continue to lack confidence in the strength of the economic recovery, and they are less optimistic about their ability to buy a home in the years ahead. This sense of uncertainty is weighing on the housing recovery today and reshaping expectations for housing for the future."

Additional survey highlights include:

Younger Americans, Hispanics and African-Americans are generally more positive about owning a home than the general population. Nearly 60 percent of Generation Y (ages 18-34) believes buying a home has a lot of potential as an investment, even though this age group suffered the steepest decline in homeownership during the housing crisis-from nearly 44 percent when home prices peaked to under 40 percent in 2009.

More than one-third of Hispanics (34 percent) and African Americans (35 percent) say they will buy a home in the next three years, compared to only one in four (23 percent) of all other Americans.

The percentage of Americans who believe that buying a home is a safe investment declined to 64 percent over the course of the year, from 70 percent in January 2010. This is down sharply from a similar survey conducted in December 2003, when 83 percent of the general population thought buying a home was a safe investment.

During 2010, survey respondents increasingly expressed a strong belief that it will be harder for future generations to obtain a mortgage. Three-quarters of those surveyed (74 percent) believe it will be harder to get a mortgage in the future, up from just over two-thirds at the beginning of 2010.

One out of three delinquent borrowers continue to say they have considered defaulting on their mortgage. However, that number fell from 39 percent at the beginning of the year to 31 percent in the fourth quarter. The number of delinquent borrowers who say they have seriously considered defaulting has also declined, from 25 percent in January 2010 to 19 percent.

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Word of the Day

March 31, 2011 7:45 am

Real estate. The land itself and everything extending below and above it, including all things permanently attached, whether by nature or by man.

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Q: How do capital gains work when you sell your home?

March 31, 2011 7:45 am

A: If you sell your primary residence, you may be able to exclude up to $250,000 of gain-$500,000 for married couples-from your federal tax return. To claim the exclusion, the IRS says your home must have been owned by you and used as your main home for a period of at least two out of the five years prior to its sale.

You also must not have excluded gain on another home sold during the two years before the current sale. However, special rules apply for members of the armed, uniformed and foreign services and their families in calculating the 5-year period.

If you do not meet the ownership and use tests, you may use a reduced maximum exclusion amount. However, you can only use this amount if you sold your home due to health complications, a change in place of employment, or unforeseen circumstances.

If you can exclude all the gain from the sale of your home, you do not report it on your federal tax return. If you cannot exclude all the gain, or you choose not to, you must use Schedule D of Form 1040, Capital Gains or Losses, to report the total gain and claim the exclusion you qualify for.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

Recycling Mystery: Latex Paint

March 31, 2011 7:45 am

By Megan Dobransky

RISMEDIA, March 31, 2011-Program Director for San Luis Obispo County Integrated Waste Management Authority, Patti Toews is at the forefront of an innovative latex paint take-back program that exists only in her county.

"Latex paint is a very special waste," Toews says. "It's challenging. On one hand people can't just throw it away or pour it down the drain, but on the other hand, it's considered hazardous waste only in California. No other state mandates that latex, or water-based, paint be disposed of in any specific manner. "

Since 2009, residents of San Luis Obispo County can take their leftover latex paint back to any retailer that sells the paint to receive free disposal. There are three situations where retailers must take back the paint: when the customer has a receipt, when there's an even swap (for example, if someone brings 500 gallons to Home Depot, they must take it if that person is buying 500 gallons from them) or if a customer brings up to two fluid gallons per week.

"You can imagine the frustration on the retailers' end," Toews says, "especially if they have to take back paint that they didn't even sell- but it mostly doesn't happen that way."

Why latex paint is hard to recycle

Toews explains that, according to research, latex paint has a remarkably uncanny way of returning to the very retail store it came from. San Luis Obispo County has other take-back programs for everything from rechargeable batteries to books, but Toews says that no other material is returned in quite the same way as latex paint.

"The convenience factor is hugely beneficial," she says. "People tend to consolidate their trips and gravitate toward where they first bought paint."

But San Luis Obispo is unique, and many people in other areas don't know exactly what to do with their latex paint.

The messaging can be confusing; it's not hazardous, but you can't just throw it away. You can dry it out to throw it away, but don't leave an open can around children or animals because that could be dangerous.

What should I do with latex paint?

David Ramirez, Household Hazardous Waste Technician for Gilbert, Ariz., says the best thing to do is bring the paint into an HHW facility or event. "We want to get it in the doors so we can determine if it's usable or not, and take away all those other dangers."

The Gilbert facility recycles latex paint once it's been determined that it can be reused. "We have three 55-gallon drums," Ramirez says. "Two we use for all shades of brown, and the last one is for anything that isn't brown, which usually makes gray."

The facility pours the paint through screens into the correct drums. Once the drum is full, the paint is pared down into five-gallon buckets that residents, organizations or the city can take for reuse. They even scrape extra paint out of the original cans so they can be recycled as scrap metal.

Ramirez says many HHW facilities don't recycle paint in this way. In fact, some of them simply landfill the paint. However, he still suggests taking leftover water-based paint to them anyway. "Even if they don't recycle, it will be properly packaged and disposed of."

Can you throw latex paint in the trash?

Latex paint can be thrown in the trash only if it is completely solid. You can achieve this by leaving the lid off the can for a few days, or using an absorbent material like cat litter to solidify the paint.

However, the best thing solution to this issue is to attempt to buy the right amount of paint-latex or not-in the first place, and just use it up.

"That way, you don't even have to worry about disposal," comments Toews. "There are always a million projects to do. Be creative and find different ways to use it."

Toews suggests donating extra paint to charity organizations, schools or artists. If you want to keep leftover paint, look around the house for anything that could use a fresh coat or touch-up. That way, the only thing to worry about is recycling the container.

Megan Dobransky is the Resource Editor at

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6 Tips to Save Money on Gas as Prices Continue to Rise

March 31, 2011 7:45 am

RISMEDIA, March 31, 2011-With gas prices reaching an average of $3.51 per gallon nationwide for regular unleaded fuel, authority on new car pricing, trends and forecasting-offers the following tips to help motorists save money on gas.

"Changing your driving behavior will make the single biggest difference in how much fuel you can save," explains Jesse Toprak, vice president of Industry Trends and Insights at "Worn spark plugs, clogged air filters and under-inflated tires also help decrease your fuel economy."

Some of the consumer-friendly money saving gas tips include:

Drive smoother: Aggressive driving has an impact on how much fuel you consume. When driving, pushing the gas pedal hard or slamming the brakes will lower your average fuel economy. Aggressive driving can lower your gas mileage by 33 percent on the highway and 5 percent around town.

Slow down: Most vehicles get the most amount of fuel efficiency when driving between 45 and 55 miles per hour. The Department of Energy (DOE) figures that for every five miles you drive going in excess of 60 mph, you could lose somewhere between 7-23 percent of fuel efficiency.

Reduce idling: Turn off your engine if you're waiting for more than 20 seconds. Idling wastes more gas than turning off your engine and restarting it.

Use premium fuel only when needed: Regular unleaded fuel won't hurt most vehicles even if premium unleaded fuel is required. Unless your engine starts to knock or ping when using a lower-grade fuel, stick to regular.

Shop for gas: A variety of web sites are available to help you locate the cheapest gas in your area, and certain GPS devices can help you search for the lowest gas price, saving you the hassle of burning more fuel while looking for best option.

Purchase a fuel-efficient car: Buying a new car that is more fuel efficient, such as a hybrid or diesel vehicle, makes good financial sense as gas prices continue to rise.

For more information, visit

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REALTORS Say Homeownership is Essential to Job Growth and Economy

March 31, 2011 7:45 am

RISMEDIA, March 31, 2011-Testifying before a Senate panel, National Association of REALTORS President Ron Phipps recently told members of Congress that sustainable homeownership must be the goal when considering future federal housing policies.

"As the leading advocate for homeownership, NAR wants to ensure public policies that promote responsible, sustainable homeownership and that any changes to current programs and incentives don't jeopardize a housing and economic recovery," Phipps told the Senate Banking, Housing and Urban Affairs Committee.

Phipps believes the housing market is starting to see signs of recovery; however, he notes that the real issue facing the nation right now is that many Americans can't find meaningful work to support their families, and housing is essential to creating jobs.

"Homeownership is a pillar of our economy; our research suggests that home sales in this country generate more than 2.5 million private-sector jobs in an average year. For every two homes sold, a job is created," says Phipps. He added that, while housing alone may not pull America out of this stalled economy, hampering its recovery will severely and negatively impact the nation's recovery.

"Owning a home contributes to the strength of the nation's economy and is still one of the best ways for individuals to build long-term wealth; therefore, we need public policies that support homeownership. Making it harder for families to afford safe mortgages does not further the goal of a housing or economic recovery," he says.

Phipps agreed that reforms are required to prevent a recurrence of the housing market meltdown, but raising fees and increasing down payment requirements for well-qualified, creditworthy borrowers places an unnecessary burden on many families, especially those in high-cost urban markets.

"Home buyers need a wide variety of traditionally safe, well-underwritten products with flexible down payment requirements," notes Phipps. "Overly stringent requirements will turn away 10-15 percent of otherwise qualified buyers who have a demonstrable ability to repay-that's approximately 500,000 home sales that won't happen, further delaying the housing and economic recovery.

"We need to keep housing first on the nation's public policy agenda to ensure that housing and national economic recoveries are sustained, and that anyone in this country who aspires to own a home and can afford to do so is not denied the opportunity to build their future through homeownership," remarks Phipps.

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HUD Awards Nearly $8 Million for Asthma Intervention and to Protect Children from Health Hazards

March 30, 2011 8:45 am

RISMEDIA, March 30, 2011-The U.S. Department of Housing and Urban Development is awarding $7.8 million in grants to 14 local projects in nine states to conduct a wide range of activities such as research on the cost effectiveness of home-based interventions for children with asthma and novel strategies for reducing risks from lead-contaminated soil and house dust. For the first time, HUD is awarding $2 million of those grants to improve indoor environmental conditions and links to education and medical services for asthmatic children and other residents living in public and assisted multifamily housing.

Lead is a known toxin that can impair children's development and have effects lasting into adulthood. It's estimated that asthma alone costs the U.S. economy approximately $3.5 billion each year. Approximately 16.4 million Americans currently have asthma, including nearly seven million children 18 years of age and younger.

"Homes with lead or other health hazards can injure children and worsen conditions such as asthma and HUD wants to ensure that children have a healthy place to call home," notes Jon Gant, Director of HUD's Office of Healthy Homes and Lead Hazard Control. "These grants will not only help to clean up lead and other home health hazards but will support the development of innovative new approaches to improve and control asthma in children."

The following is a breakdown of the funding:

Grant program and funding amount

Healthy Homes Technical Studies Grants $4,000,000

Lead Technical Studies Grants $1,795,831

Asthma Interventions in Public and Assisted Multifamily Housing Grants $ 2,060,986

Through these three programs, HUD's Office of Healthy Homes and Lead Hazard Control supports research to eliminate dangerous lead and other key housing-related hazards from lower income homes, improves our knowledge of the benefits of green construction and maintenance practices for low income housing and stimulates the implementation and evaluation of housing management practices to improve the health of asthmatic children and the quality of life of their caregivers.

The funds are provided through HUD's, Healthy Homes Technical Studies, Lead Technical Studies and Asthma Interventions in Public and Assisted Multifamily Housing grant programs.

Even though lead-based paint was banned for use in the home in 1978, HUD estimates that approximately 24 million homes still have significant lead-based paint hazards today. According to HUD, lead-contaminated dust is the primary cause of lead exposure and can lead to a variety of health problems in young children, including reduced IQ, learning disabilities, developmental delays, reduced height and impaired hearing. At higher levels, lead can damage a child's kidneys and central nervous system and cause anemia, coma, convulsions and even death. However, HUD notes that lead is not the only danger threatening families and children in the home. Asthma is now recognized as a leading cause of school and work absences, emergency room visits and hospitalizations that disproportionately impacts low income, minority populations.

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5 Ways to Make Budgeting Less Painful

March 30, 2011 8:45 am

By Barbara Pronin, RISMedia Columnist

RISMEDIA, March 30, 2011-In today's shaky economic climate, it's no wonder that many families are worried have made belt-tightening a way of life. But there are ways to ease the pain of shaving expenses, says Oregon budget counselor Owen Spangler.

"Families who share the obligation to save can be pretty creative," Spangler said. "It's possible to rein in family expenses without sacrificing family fun."

Spangler suggests the following tips for making budget cuts less painful:

Make budgeting a family affair Decide together which regular expenses can be cut. Shall we get rid of premium cable channels? Give up the morning coffee stops? Cut back on dance or karate lessons? Try to view the cuts not as a penalty, but as a means toward more important goals.

Sock it away Once you've determined how much these cutbacks will save the family monthly, make arrangements with your bank to have that amount automatically transferred from your checking account to savings.

Swap activities Take up the slack of activities cut by instituting new ones. Try a family game night or staying home for a movie and popcorn evening. Check out free activities at the local library, or give up eating out for a cook-in evening with new recipes to try.

Share the pain Friends and neighbors are going through the same hard times. Invite another family over for charades or board games. A few laughs and a little hot cocoa can do a lot to improve anyone's mood.

Set a goal A newer car? A family outing or vacation? Make the saving fun. Put up a bulletin board with pictures of the goal, and a piggy bank to which everyone can contribute. Just a few cents a day from every family member can add up to a tidy sum.

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