the BalanceZone Team Blog

New Blog Address

2010-12-23T09:01:00.000-06:00

What's The Most Important Investment Indicator?

2010-10-11T14:43:00.002-05:00

Q: What is the most important investment indicator?

A: Your window.

Ask any pilot what is the most important instrument in the cockpit and their answer will more than likely be:

The Windshield.

It is standard protocol for flight instructors to cover up

the dashboard while training new pilots. The idea is to teach the students to, "Get their heads out of the cockpit". You can have all of the data in the world at your finger tips and if you don't know your, "Pitch" (The position of the horizon in the windshield) you're not going to make it.

Crash.

The same is true for investing.

If you can't see your BZI Balance Objective/Pitch, you aren't going to make it.

Crash.

It's not what's on display on your computer screen/TV/Bloomberg, but rather it's what's in plain sight right outside your window: Competitors/advisors/customers.--When did you buy? When did you sell?

The BZI Skill Builder is your simulator that teaches you the importance of pitch/balance.

The BZI Statement Consolidator is your window.

From The BZI Team, Take the balance of power from Wall Street to Your Street

Lego Airplanes & Paper Airplanes

2010-10-09T07:20:00.000-05:00

If these air plane models were financial plans, which one would you buy? Most people would buy the well packaged Lego model.

Interesting. The Lego model looks great, but it doesn't fly.

Financial engineers and planners are faced with a constant temptations to make things more complicated than necessary because it makes them appear more capable than they really are. Remember....

A model is not the truth. It is a lie that helps you get your point across.

How Do You Want To Consume Your Financial Advice?

2010-09-29T06:33:00.001-05:00

How Do You Want To Consume Your Financial Advice?

Song/Album/Concert?

Investors are being treated like CD/Record buyers before iTunes.

For Music lovers, before iTunes, it is was like, "Here are two great songs, and 9 others that are just average. These other 9 were added to justify the $15.00 price tag!"

For Investors, before BZI, it is like, "Here are two incredible investment opportunities that we are going to give you access to, and we are going to add 11 more sub-par investments so that we can justify our fee!?

Time to change?

You can download music at iTunes for .99 cents. You don't have to spend $15.00 for the entire CD.

Consumers of music seem to be happier about their personalized mix of music more than in any other time in history. And, the record companies seem to be making plenty of money.

So why doesn't the financial services industry adapt like the music industry?

More than ever, investors want control tethered to the idea that a trusted professional is right around the corner. This is not true for everyone. But for more and more people, this is how they want to consume their financial advice.

It seems as though there are three ways to consume financial advice: song/cd/concert.

The Song: Investment advice from a friend at a party. Advice from a family member. A news story or blog posting that caught your attention. You bought a song/investment because of this advice.

The CD: When you want someone to look at all of your old songs/investments that you have acquired over the years. You are emotionally attached to them, you paid good money for them, and you'd like to see them cared for.

The Concert: This is advice where you put it all together (The dreaded financial plan). Either you try to do it yourself, or you hire a stage crew to set up the auditorium.

Our observation is that investors, just like music lovers want to have options to pick and chose from: song/cd/concert.

Mix and match.

Safely accept and reject investment advice.

Have control.

The BZI Team feels like we've done this for investors.

We've placed you in the middle of the scale. You get to decide what goes on the left and what goes on the right. Your scale can be set up with as little as two songs/investments. Your scale can be elaborate and have several songs/investments. You decide how loud (how much safe versus risk) you want your scale. You can decide when you want professional financial advice and when you do not. And most importantly, you decide when to re-balance.

Song/CD/Concert--- you are always working from a simple two-part balancing system. A scale.

It's time.

With BZI, YOU get to decide how you want to consume your financial advice.

From The BZI Team, Take the balance of power from Wall Street to Your Street

You Cannot Learn To Ride A Bicycle From A Book

2010-09-25T07:36:00.000-05:00

You cannot learn to ride a bicycle from a book.

Same is true about investing.

You have to practice.

Now, with the BalanceZone Skill Builder Software, you can practice dealing with your investments.

Just like learning to ride a bike, it will take a little time. But, once you get it, you are good for the rest of your life.

From The BZI Team, Take the balance of power from Wall Street to Your Street

The Microwave Oven & BalanceZone Investing--

2010-09-24T06:59:00.001-05:00

Q: How does setting up the BZI Statement Consolidator Software save me time?

A: Think of it like using a microwave.

As several users have stated before, "Before the BZI Statement Software, I felt like I was being buried alive in a torrent of financial words pie-charts, data, percentages and financial blah-blah. It took some time to get use to this software, but once I did it became as irreplaceable as my microwave oven."

How did we live without it?

BZI is new. It's different. It takes a little bit of time to get use the idea that the markets are far more simple than we have been led to believe. That the details don't matter nearly as much as we tend to think that they do.

After you use the BalanceZone Statements Consolidator Software, just like the microwave oven, we think that will you wonder how you ever managed your investments without it.

Thanks for the question.

From The BZI Team, Take the balance of power from Wall Street to Your Street

Where will your investments be in 100 years?

2010-09-22T14:35:00.004-05:00

Q: What is the past performance of BZI?

A: It’s your path, not your investment's past that’s important. The track record of other people and investments is history. While it is important to study track record, it is more important to have a strategy in place that you can control. Ask yourself the 100 year question:

In 100 years, will your favorite investment strategy be effective?

In 100 years, will your favorite investment still have 5 stars?

In 100 years, will your favorite investment still be around?

In 100 years, will buying low and selling high still be the most important thing you do?

When you think about it, the only thing that really matters is this: Did you buy low and sell high? The only way to rebalance your BZI Scale is to buy low and sell high.

From The BZI Team, Take the balance of power from Wall Street to Your Street

Bullets For Your BZI Scale?

2010-09-22T14:07:00.003-05:00

Q: Are there any bond ETF's (Electronically Traded Funds) that you like for the left side of the scale?

A: We never make specific recommendations. We never embrace one product or product vendor. However, we are big advocates of lowering your investment fees.

ETF's are a great low cost investment alternative to mutual funds and Wall Street money management programs. Claymore securities has recently come out with a new type of bond ETF called, "Bullets".

Claymore Bullet ETF's

Below are the 7 Bullets with their associated maturity dates and ticker symbols.

Exchange-Traded Funds

Ticker Symbol	ETF Name
BSCB	Claymore BulletShares 2011 Corporate Bond ETF
BSCC	Claymore BulletShares 2012 Corporate Bond ETF
BSCD	Claymore BulletShares 2013 Corporate Bond ETF
BSCE	Claymore BulletShares 2014 Corporate Bond ETF
BSCF	Claymore BulletShares 2015 Corporate Bond ETF
BSCG	Claymore BulletShares 2016 Corporate Bond ETF
BSCH	Claymore BulletShares 2017 Corporate Bond ET

These ETF's are brand new and haven't been tested yet. Clearly, these little critters are not perfect. But they definitely caught our attention.

We are more curious to know what you think about them.

Thank you for the question.

From The BZI Team, Take the balance of power from Wall Street to Your Street

Open Paths

2010-09-18T06:21:00.002-05:00

Open paths.

I love to ride my bicycle. I have a few special places that I like to go. Typically, I ride by myself. But sometimes, I will invite new riders to ride with me. When I do, the first thing new riders want to know is what PATH are we going to take?

I say, I don't know. I have a few special places that I like to visit, but I never really know what path I am going to take. Let's just ride. The typical response is, "I'd feel much better if you'd tell me the exact route".

I tell them no. The real joy of riding your bicycle will come from you learning to create your own paths.

Oddly, this freaks people out.

Just ride. You'll see.

Proven paths feel safe. We like certainty. As adults, we tend to look for the established paths.

Kids have no problem with this. Kids create their own paths. Kids enjoy the ride.

The point in telling you this story is this: maybe it's time to create your own investing path? Maybe you don't need to follow the green arrow that Wall Street promotes? Maybe there is more wealth and happiness to be had by following your own path?

If you are willing to take a ride on the BZI Skill Builder, then you are well on your way to more financial health and happiness.

The BZI scale gives you balanced structure 100% of the time.

Balanced structure is essential. Balanced structure helps you establish a foundation. It's logical. It helps you stay on point. It helps you reach your goals. It helps you get what you want.

The choice is yours:

You can follow Wall Street's green arrow.

Or

You can create your own path.

From The BZI Team, Take the balance of power from Wall Street to Your Street

Influencing Investor Behavior Through Fun Intelligent Design

2010-09-17T10:04:00.000-05:00

Watch what a group of engineers did, using fun to get people to use a long staircase with a moving escalator right next to it. At first no one took the stairs, almost 97% of the people took the escalator.
Notice how engineers changed how people reacted to climbing a long stair case as first choice. 66% more people took the stairs.

The BZI Team believes that if engineers can do this with a stair case, we can get similar results for investors by reshaping the monthly investment statements by implementing the BZI software.

Nothing earth shattering here. Just a very interesting observation.

From The BZI Team, Take the balance of power from Wall Street to Your Street

Even CNBC?

2010-09-07T05:55:00.003-05:00

Even CNBC? The Lords of Financial Minutiae are acknowledging how upset individual investors are with Wall Street.

55 Billion flowed out of Equity Funds this year.

44 Billion flowed in Bonds Funds this year.

People are done with buy and hold.
People are done with Star Ranking Systems.
People are done with Wall Street.

It is important to remember that people may be done or upset with Wall Street, but if HISTORY has taught us anything it is that:

Markets don't lose money, people do.

Buy Assets. Sell Debt. Keep Cash.

From The BZI Team, Take the balance of power from Wall Street to Your Street

The Bankers Are Coming!

2010-09-01T04:04:00.000-05:00

The British are coming!

These four words changed the course of history.

It's time to change one of these words so that we can change the course of history again.

The bankers are coming.

It's time to take the balance of power from Wall Street to your street.

It's time.

The news from Wall Street is very bad.

Investors are not making money.

Investors are paying Wall Street huge fees for the luxury of earning next to nothing.

Wall Street is getting rich, investors are not.

We all know something is wrong.

Financial trust has been replaced by financial miss-trust.

The message is dark, but the solution is simple.

The solution starts with you.

It's time to get the ownership or your money back.

It is time to align your expectations with reality.

It's time to take the balance of power from Wall Street to your street.

It's time to enroll in the BalanceZone Classes.

PS-- Thank you Jeff Creel!

From The BZI Team, Take the balance of power from Wall Street to your street.

How Much Can I Expect To Make If I Use BalanceZone Investing?

2010-08-25T06:56:00.003-05:00

Q: How much can I expect to make if I use BalanceZone Investing?

A: Excellent Question with several answers. We wish that we could say, "X%". However, There are so many variables to this question (we get this type of question a lot) that we call this question the, "Black Hole".

There are two points that we want to make:

1. BZI is NOT a, "Timing" investment strategy. BZI it a, "Tuning". investment strategy. Click here to read what the difference is between timing and tuning.

2. Everyone has a different, "BO" (Balance Objective). Some people will set their scale 50/50. And others will do 10/90, 90/10-- 70/30, 30/70 -- etc. YOU can set YOUR scale up any way you want. The BZI Scale always starts off level.

Some BZI users NEVER adjust their BO. Others, decide to adjust their BO.

Sometimes the, "Never's" do better.

Sometimes the, "Adjuster's" do better.

Regardless, if you are a, "Never" or an "Adjuster" focus more on what's going on in YOUR life, not Wall Street.

If you attend one of our classes, we will teach you how to set up your BZI Scale, help you find YOUR "BO", and decide if you are a, "Never" or an, "Adjuster".

Upon graduation, you should have an excellent idea of what rate of return YOU should make.

From The BZI Team, A better way to save, and a new way of looking at your investments.

Rosetta Stone Language Courses and BalanceZone Investing

2010-08-20T05:51:00.001-05:00

Q: What exactly does your company offer?

A: Classes.

We are self study classes for investing, much like the Rosetta Stone self study classes are for learning foreign languages.

We also offer classes with live instructors.

We teach a new savings and investing perspective that has never been taught before.

If you are tired of trusting Wall Street, and you are looking for a second opinion or a better way to save and invest, then please enroll in one of our free seminars.

We would be honored to have you attend.

From The BZI Team, A better way to save, and a new way of looking at your investments.

CD's Beat the Stock Market?

2010-08-17T06:25:00.002-05:00

Q: I've been investing since the mid 90's. The stock market has been a real roller coaster. Surprisingly, I looked at my 6 month CD's that I have been rolling over since I graduated from college. I noticed that I have more money in my CD account than my stock portfolio. How can this be? I've placed approximately the same amount of money into both. Are CD's a better deal than the stock market?

A: Look at this picture. Over this time period, the S&P 500 and CD (Certificate of Deposit) delivered very similar returns. However, they generated these returns in very different ways. From 1993 to 2008:

The S&P 500 delivered 5.78%.

The CD delivered 4.11%

The difference was 1.6%

Was it worth it?

We are guessing, but we are assuming that you had less than perfect timing? Did you move some investments around when they were down? If you did, don't beat yourself up. You and 80 million Boomer's are fed up with the buy-and-hold Wall Street roller coaster ride.

Go back and see if you sold anything in 2001, 2002, or 2008. If you did, then there is your answer.

As a suggestion, if you would like to get off of the buy-and-hold Wall Street roller coaster, we would encourage you to enroll in one of our BalanceZone classes.

This was a great question. We'll post some follow up examples of this time period and show you how you would have done had you used a BalanceZone strategy.

(We'd like to thank James Smith at http://kidssavingsaccount.info/ for the picture above. James has some excellent articles and we would highly recommend that you read some of his work.)

Have a balanced day, From, the BalanceZone Team

Re-balancing is an elegant word for Pickpocket?

2010-08-11T07:15:00.003-05:00

Q: I was reading your BZI Proofs on your website and I noticed that you don't trade very much. 3 or 4 times every 10 years. I showed this to my financial adviser. He said that retirement income planning was complicated. He said that these outcomes are impossible without some type of professional re-balancing going on in the background. It's a nice idea, but it's not realistic. Would you care to comment?

A: High Frequency Re-balancing is Wall Street's very elegant way of systematically removing your money from your portfolio and putting it into their pockets. BalanceZone is designed for individual investors to take control of their financial destiny according to rules and practices that are right for them. These rules and practices are not always in the best interest of the Wall Street “cookie cutter” machine.

You definitely need to rebalance. You just need to remember:

The less you trade the better you'll do.

If you really want a great story to back this point up, click on the link below.

Warren Buffett's story of the Gotrocks and Hadrocks.

This is a story about how Wall Street elegantly steals your money.

Click Here and go to page 17. Enjoy!

Have a balanced day, From, the BalanceZone Team

M.E.G.O. Becomes M.E.G.I

2010-08-08T10:44:00.001-05:00

Q: How did you come up with the idea of the BalanceZone Skill Builder?

A: M.E.G.O. My eyes glaze over.

This is how many people feel when the topic of money and investments percolates.

We get it.

Instead of explaining, we want you practicing. Practice balancing a scale.

The more you practice on the BZI Skill Builder, the more the, "M.E.G.O. problem" goes away.

You will see that the complexity and details don't matter nearly as much you think.

With the help of the BZI classes, and the BZ Skill Builder, you'll go from M.E.G.O. to M.E.G.I.

My eyes get it.

Have a balanced day, From, the BalanceZone Team

Noise Cancellation Headphones

2010-08-03T07:54:00.003-05:00

Q: What financial media and or resource(s) should I pay attention to?

A: None.

This answer is overstated. But, it helps us make our point. Look at the picture to the left.

Using BalanceZone is like wearing noise cancellation headphones.

BZI helps tune the financial noise/nonsense out. It helps you relax, thereby reducing your fear. When developing BZI, we noticed this:

By tunning out the, "Financial noise":

No details on what investments went on the scale.
No economic data.
No financial advice.
No economic forecasts.
No TV, radio, newsletters and or blogs.

By only focusing on a tilting scale..........

We found that we could navigate through all market conditions.

Sure, our results varied, but we effectively eliminated all self-inflicted wounds. We never bought high and sold low. How? The only way to balance the scale is to buy low and sell high.

Pretty amazing?

While we all know to buy low and sell high, when we are loaded with fear, we probably don't.

Secondly, we blindly assume that we need, "Lots" of information to make buy, hold and sell decisions, when in reality, we do not. The BZI Skill Builder helps prove this point.

With BalanceZone we teach that the financial details don't matter nearly as much as we tend to think that they do. Consequently, you are more relaxed. You don't have to stay plugged in to the Wall Street roller coaster everyday of your life. When you are relaxed, and know how you are going to respond no matter what the market does, it makes it much easier to buy low and sell high.

Once you've learned this simple process, and set your BZI scale up, you can relax and enjoy the ride.

As always, thank you for the question and we would encourage you to enroll in one of our BZI training programs.

Have a balanced day, From, the BalanceZone Team

Spending Principal Is The Key To Fighting Inflation?

2010-07-26T08:15:00.002-05:00

Q: I am a long time financial adviser in London. You've stumped me. Inflation? How do you fight it with the 70% safe 30% Risk asset allocation?

A: Spending Principal let's you hold your investments longer. In short, you get the benefits of compound interest. As you can see from the BZI Skill Builder, 30% risk is enough to fight inflation.

This concept is so obvious, that the mind repels it.

On the left side of the scale, you are taking income and PRINCIPAL.

Mortal sin, right?

Wrong.

The idea of not spending principal is tattooed on the minds of investors. But think about it.

You've been spending principal your entire life. When you get your paycheck, do you put into a well managed investment portfolio and live off of the dividends and interest? Or, do you spend it down and allocate a small percentage to investments?

Remember, BZI is not an optimization model. It is a sustainability model. Consequently, it focuses on efficiency. Look at the picture above and think of it like this. During retirement, you don't want to run out of money/gas.

With BZI, you are depleting your money/gas tank (spending interest and principal) while driving down Retirement Avenue. Occasionally, you fill your tank up with profits from your investments.

If you do this right, you can drive your Infinity, to Infinity.

Now think how your scale will tilt during retirement. If you practice enough with the BZI Skill Builder, you will get very good at learning where your comfort level is and when YOU need to fill back up. Some people will drive to the empty line. Others will fill up sooner.

You must PRACTICE on the BZI Skill Builder.

It has been our observation, that if you work with the BZI Skill Builder enough, you will eventually get what we call the BZI BUZZ. That moment when you say to yourself, "I can't believe something so simple can be so effective".

In our BZI classes, we go into much more detail on this issue.

Thanks for the question.

Have a balanced day, From, the BalanceZone Team

How Do You Get Revenge Against Wall Street and Runaway Big Government?

2010-07-19T15:09:00.001-05:00

Q: I want revenge! I am so angry and disappointed at Wall Street and Big Government that I can't see straight! How can I get some revenge? This financial reform bill makes me sick. I love my country and the freedoms that we have. But, how in the world can we set this mess straight? How do you get tough with your TBTF banker and big government?

A: We have a suggestion, that's not vengeful.

It's called BalanceZone Investing.

BZI is the financial version of the, "One inch punch."

The one inch punch is a skill which uses fa jin (translated as explosive power) to generate tremendous amounts of impact force at extremely close distances. With proper training, anyone can learn how to use this technique. It just takes a little effort.

BZI is one of the most disruptive ideas that Wall Street and big government has ever seen.

BZI will teach you how to lessen your dependency on Wall Street and Big Government.

Instead of taking revenge, respond with ability.

Hit them in the profits.

We are not advocating physical violence. We are advocating a peaceful response.

By transferring the idea of managing risk from Wall Street and big government to Main Street, you are effectively reducing your dependency on these institutions and thereby reducing their importance and profits.

Responding with ability is always better than responding with revenge.

Have a balanced day, From, the BalanceZone Team

Sisyphus Meets Betty Crocker

2010-07-13T09:36:00.000-05:00

Q: Not again? The DOW is hovering around 10,000 and I am wondering if it's going to come crashing down again? How would your system help me deal with this, "Not again syndrome?"

A: Great question. Allow us to tell you the story of Sisyphus and Betty Crocker.

In Greek mythology, Sisyphus was a man doomed to spend eternity rolling a boulder up a hill, at which point it would roll down again, and he would have to start all over again.

An absurd condition you might say? What you call the, "Not again syndrome"?

Right now, many investors feel this way.

How might we change this situation?

We could look to Warren Buffett for some advice, but let's look to Betty Crocker instead.

In the 1940's Pillsbury introduced the concept of "Prepackaged foods". All of the products that they, "Prepackaged" sold like hot cakes, except for cakes.

Why?

The answer surprised them: Pride.

Pie-crusts and biscuits don't elicit much pride. But cakes do. Cakes are fun. Cakes involve you. Cakes are celebratory. Cakes represent tradition. Cakes = Pride. In order to get you to buy their cake mix they had to figure out how to pour pride into the mix.

Instead of premixing everything, they poured involvement into the mix.

They sold to you a semi-prepared cake mix and gave you instructions for the rest.

By involving you, they made you feel proud and in turn sold to you a ton of semi-prepared cake mix.

"You and Betty Crocker can bake someone happy".

How do we bake some pride and happiness back into our economy so that we can get rid of the, "Not again Sisyphus syndrome?"

We'd like to suggest that you consider BalanceZone Investing.

You see, the problem is that Wall Street has premixed everything and has nothing semi-premixed.

Instead of involving you, they have gone out of their way to dis-involve you. Thus, perpetuating the Sisyphus syndrome.

BalanceZone changes this.

By offering to you a semi-premixed way to manage your investments, BZI involves you. And when you are involved you take pride. In order to buy low and sell high you must take pride in your work. This behavior will always be hard to execute.

In order to reboot the economy we must re-instill personal pride. But know this. The FOB's (financially obscene bankers) are making a lot of dough selling you the pride-less, preassembled financial cake mix.

Pride and involvement are nowhere to be found in these products.

With BalanceZone Investing you have a way to be involved and take pride in cooking/caring for your investments.

You don't have to feel like Sisyphus any more.

Our suggestion is to take a lesson from Betty Crocker and pour some pride into your portfolio.

Have a balanced day, From, the BalanceZone Team

Carburetors

2010-07-12T05:56:00.003-05:00

Q: Why hasn't the media or the industry embraced BalanceZone Investing?

A: Profits.

Imagine this:

You live in Oklahoma. You invented a carburetor in your garage. It is amazingly simple, and it works.

You place it in your car, and see that you get 70 miles per gallon, and it substantially reduces the need for maintenance and repairs.

For three years you keep your invention to yourself. You test and tinker with it to see if there are any flaws. You conclude that it is good to go.

You say to yourself, "I am going to go show this carburetor to the automobile industry".

The industry is curious.

You give demonstrations. They seem impressed. They do nothing. For five years.

You call. They avoid. You call. They avoid. You call.

Finally, one day at a conference you bump into one of the industry avoiders (one of those upper management types that proactively avoids muscle definition but has a conscious) and he pulls you aside.

"Hey, I am sorry that we haven't called you back. This is off the record. Your invention is ingenious. It works. We tested it ourselves. You will never get the industry to embrace it. If we use your carburetor we'll sell less stuff (cars, maintenance and fuel). Don't get me wrong, we're all about alternative energy, and saving the planet. We just don't want to see the gears get melted off of our profit margins."

With BZI, you buy less Wall Street product, and get better results.

Have a balanced day, From, the BalanceZone Team

Is It Really That Simple? Really?

2010-07-09T07:38:00.001-05:00

Q: So let me see if I get this right. Your basic assumption about financial markets is that the turbulence that imbues price movement can be adequately modeled at different resolutions and time periods without a precise measuring tool(s)? Your simple two-part scale does this job remarkably well? Is that your BZI theory? Is the scale suppose to replace the standard financial tool set?

A: Yes to your first question. Utterly amazing things can happen from simple rules repeated without end.

Balance a scale.

No to your second question. We feel that you should use the BZI scale in conjunction with the existing tool set.

Have a balanced day, From, the BalanceZone Team

Video That Explains Why Flash Crashes Happen..... Wow

2010-07-08T07:32:00.000-05:00

Capitalism hasn't failed.

We've failed capitalism.

Potter Stewart, an associate Justice of the Supreme Court of the United States once said, "I can't define what is pornography. But I know it when I see it."

This needs to stop.

Have a balanced day, From, the BalanceZone Team

Financial Markets Are Easy, Not Hard?

2010-07-07T08:11:00.001-05:00

Q: I've been using the free BZI Skill Builder on your web site. It is amazing. But, I am having a hard time believing that something so simple could be so effective. Is there more to this?

A: No one teaches you how to see the financial markets as easy. It's not good for profit margins.

There is no: class, place or group that teaches this perspective.

The BZI program changes that.

As part of the BalanceZone program, we focus on teaching you that the markets are far more simple than you think.

We understand that most people take the, "This is hard perspective".

One of the biggest hurdles that the BZI has to overcome is its simplicity. It is so simple, the mind repels it.

Given the wide range of opinions, and the massive complexity (noise) that the industry puts out, it's easy to automatically think that the financial markets are hard.

You can choose to stay with the hard perspective and be perpetually confused.

Or

You can adopt the easy perspective and be successful.

The choice is yours.

Thanks for the question.

Have a balanced day, From, the BalanceZone Team

Technical Analysis, GPS Systems & BalanceZone Investing

2010-07-02T06:39:00.001-05:00

Q: How does technical analysis fit into to the BZI concept?

A: We'll try to answer this question with a story about GPS mapping systems.

Many people have fallen victim to the glory of technical analysis and GPS systems.

GPS maps do not take you to your destination. Neither does technical analysis. They give you a visual perspective of where you are relative to where you want to be. But you must pay attention to what is in front of YOU at all times.

Sometimes, the assumptions that are poured into these maps are outdated or just plain wrong.

This question reminds us of a story about drivers blindly trusting GPS systems with disastrous outcomes.

The most victimized by a GPS system of anyone we've ever heard of didn't even own a GPS.

A 90 year old couple lived on a cul-de-sac. Unfortunately for them, all GPS systems said that their driveway was a cut-through to a major intersection. Consequently, their driveway looks like a gravel road and they are used to late night screeching sounds.

One morning they were awakened by an explosion in their driveway.

A mentally-ill driver was blindly following his GPS system, rolled up onto this house, and literally hit the end of the road.

He set his car on fire.

And, walked away with the the GPS in his hand.

Some people never learn.

There have been many financial maps (technical analysis tools) that have lulled investors into thinking that they have found the perfect investing system.

Don't get lulled into this fantasy.

Technical analysis, and GPS systems are fantastic tools. But becoming overly dependent on them can lead you to some very unpredictable and vulnerable situations.

Driving your portfolio is no different than driving your car.

Use your tools, but always keep your eyes on the road/BZI scale.

Thanks for the question.

Have a balanced day, From, the BalanceZone Team

Paying Attention

2010-06-30T13:36:00.008-05:00

How many passes did you see?

This is a famous psychological study. What does this have to do with BalanceZone Investing?

A lot.

For investors, the 800 pound Gorilla is you. It's your investment behavior.

Focusing on financial data (the passes) is important.

But isn't buying low and selling high more important?

Luckily for BZI investors, if you can balance a scale, you won't have to worry about getting sucker punched by the 800 pound Gorilla.

You.

James Surowieck & Financial Literacy

2010-06-28T15:15:00.000-05:00

Halfway through his Presidency, George W. Bush called on the country to build “an ownership society.” He trumpeted the soaring rate of U.S. homeownership, and extolled the virtues of giving individuals more control over their own financial lives. It was a comforting vision, but, as we now know, behind it was a bleak reality—bad subprime loans, mountains of credit-card debt, and shrinking pensions—reflecting a simple fact: when it comes to financial matters, many Americans have been left without a clue.

The depth of our financial ignorance is startling. In recent years, Annamaria Lusardi, an economist at Dartmouth and the head of the Financial Literacy Center, has conducted extensive studies of what Americans know about finance. It’s depressing work. Almost half of those surveyed couldn’t answer two questions about inflation and interest rates correctly, and slightly more sophisticated topics baffle a majority of people. Many people don’t know the terms of their mortgage or the interest rate they’re paying. And, at a time when we’re borrowing more than ever, most Americans can’t explain what compound interest is.

Financial illiteracy isn’t new, but the consequences have become more severe, because people now have to take so much responsibility for their financial lives. Pensions have been replaced with 401(k)s; many workers have to buy their own health insurance; and so on. The financial marketplace, meanwhile, has become a dizzying emporium of choice and easy credit. The decisions are more numerous and complex than ever before. As Lusardi puts it, “It’s like we’ve opened a faucet, and told people they can draw as much water as they want, and it’s up to them to decide when they’ve had enough. But we haven’t given people the tools to decide how much is too much.”

Unsurprisingly, the less people know, the more they run into trouble. Gary Rivlin’s blistering new examination of the subprime economy, “Broke, U.S.A.,” is full of stories of financially ignorant people bamboozled into making bad decisions—refinancing out of low-interest mortgages, say, or buying overpriced credit insurance—by a consumer finance industry adept at creating confusing products. Such stories are backed up by the numbers. A study by economists at the Atlanta Fed found that thirty per cent of people in the lowest quartile of financial literacy thought they had a fixed-rate mortgage when in fact they had an adjustable-rate one. A study of subprime borrowers in the Northeast found that, of the people who scored in the bottom quartile on a very basic test of calculation skills, a full twenty per cent had been foreclosed on, compared with just five per cent of those in the top quartile.

What can be done? One solution is regulation: the financial-reform bill now before Congress will create a consumer financial-protection agency that should help curb the finance industry’s most predatory excesses. Another solution is to tinker with “choice architecture”—doing things like enrolling people in 401(k)s automatically—in order to “nudge” them toward better decisions. Both of these strategies are necessary, but they’re not enough on their own, because financially illiterate consumers are always going to be easy victims. We also urgently need proper financial education.

This seems obvious, but it’s surprisingly controversial. Some suggest that financial illiteracy is an example of what economists call “rational ignorance”—inattention that is justified because the costs of paying attention outweigh the benefits. But few decisions affect us more directly than the ones we make about our money. Critics also argue that financial education may make people overconfident, and therefore more likely to make bad decisions. In fact, the reverse is true: the less people know, the more overconfident in their abilities they tend to be. In a German study, eighty per cent of those surveyed described themselves as confident in their answers on a questionnaire, yet only forty-two per cent got even half the questions right. This is known as the Dunning-Kruger effect: people who don’t know much tend not to recognize their ignorance, and so fail to seek better information. No wonder, then, that the least knowledgeable people in the Atlanta Fed study were also the least likely to do research before getting a mortgage. By contrast, well-informed people are more likely to ask others for help. If financial education taught people only how little they actually know, it would accomplish quite a lot.

The government’s new consumer-protection agency has the authority to “review and streamline” financial literacy programs, but that’s not enough. We really need something more like a financial equivalent of drivers’ ed. There’s evidence that just improving basic calculation skills and inculcating a few key concepts could make a significant difference. One study of the few states that have mandated financial education in schools found that it had a surprisingly large impact on savings rates. And the Center for American Progress has found that, across the country, education and counselling by nonprofit organizations, like the Massachusetts Affordable Housing Alliance, have helped low-income families buy and hold onto homes, even during the housing bubble.

The point isn’t to turn the average American into Warren Buffett but to help people avoid disasters and day-to-day choices that eat away at their bank accounts. The difference between knowing a little about your finances and knowing nothing can amount to hundreds of thousands of dollars over a lifetime. And, as the past ten years have shown us, the cost to society can be far greater than that. ♦

We found this article in the July 2010 issue of, "The New Yorker"

Have a balanced day, From, the BalanceZone Team

The Smorrelation Of Financial Marshmallow Markets

2010-06-22T08:11:00.002-05:00

Q: I get that you don't believe in the correlation- non correlation theory of standard asset allocation models. Is that correct?

A: Yes. We created our own word for how global markets actually work these days,

Smorrelation:

"The sudden and unanticipated synchronized melting of all financial markets, much like an over cooked marshmallow."

Asset classes are different, but the investment models that governments and economists use are all the same.

Consequently asset classes that should be non-correlated, get correlated because everyone is staring at the same computer screen, tethered to the same investment models, treating all asset classes the same. Hence: Smorrelation--

Capitalism and free markets work when there is difference.

Capitalism and free markets don't work when there is only sameness.

Thanks for the question.

Have a balanced day, From, the BalanceZone Team

It's The Behavior's Versus The Fee's

2010-06-15T06:52:00.000-05:00

Q: What's more important: Fees or Investing Behavior?

A: We will let our friend John Bogle answer this question.

In Bogle's article, "Investors are getting killed in etfs" he explains why behavior is actually more important than fees.

A new analysis by Vanguard Group founder John Bogle indicates that investors are generally making poor decisions when buying and selling exchange-traded funds.

During a webinar hosted by the Journal of Indexes and IndexUniverse.com on Wednesday, the indexing pioneer unveiled the results of his recent look into investment tendencies by ETF investors. Bogle now provides independent research and analysis through his Bogle Financial Markets Research Center.

Bogle compared the returns of 79 ETFs in a variety of major asset categories over the past five years to the returns of the average dollar invested in those ETFs over the same time period. It’s a common statistical practice in mutual fund analysis, allowing investors to see whether they’re buying at the bottom and selling at the top, or vice versa.

While investor returns typically trail fund returns by some margin, Bogle expressed surprise at the degree to which investor returns suffered in ETFs.

“These numbers … are unbelievably consistent,” said Bogle. “Out of 79 ETFs we covered, 68 had investor returns that were … short of the returns earned by the funds themselves. “

And by no small margin. The degree of investor-lag ranged from 0.4% per year for large-cap value funds to -17.9% per year for financials ETFs. Investors seemed to do the worst in high-profile and volatile sectors like emerging markets, financials and REITS.

On a simple average basis, ETFs in the study delivered a 1% compounding return over the trailing five years, translating into a cumulative gain of 6%. Investors, however, earned a -3.5% average compounding return, translating into a cumulative loss of 12%.

“When you combine those, you’re talking about 18% of investor capital that’s been lost by all this trading,” said Bogle.

To hammer his point home, Bogle compared the returns of investors in Vanguard ETFs with the returns of investors in comparable Vanguard mutual funds. The study, looking over the same five years, confirmed that investors trading in and out of Vanguard ETFs did worse, on average, than investors in Vanguard mutual funds.

“Investor lag in the ETF category is large and significant,” said Bogle. “The … mutual funds have a lag here and there, but in general, come very close to the markets they are in.

“So we have evidence—strong evidence—that exchange-traded funds, because of the timing that goes on in them, are not acting in the best interest of investors. Or, that investors are not acting in their own best interests, which may be a better way to put it.”

Data for the study were compiled by Morningstar. The study looked at monthly cash flows and monthly fund returns. Bogle noted that this is not a precise format, as daily cash flows into and out of the funds could skew the results.

“Is that way of aggregating data (on a monthly basis) precise? No it is not,” said Bogle. “But I’m persuaded in the absence of compelling data on the other side that these data are telling us something that is worth knowing … that mutual fund trading is about as valuable as trading individual stocks, which is to say, not valuable at all, and harmful to your returns.”

Thanks John.

Have a balanced day, From, the BalanceZone Team

Messing With Gold, Cattle, & Money

2010-06-10T10:56:00.000-05:00

Q: Gold??? Does it go on the right or left side of the scale?

A: It sits on the right. It's future rate of return is unknown.

Many of you have asked about gold. So here are some of our observations about this sacred cow.

Gold can't be messed with.

You can't lend gold into existence like you can a fiat currency.

Gold cannot default but fiat currencies and debt can.

Quantifying gold is easy. Quantifying all the fiat currency sloshing around the planet is: impossible.

Because of this combination, Gold is acting like money.

True demand for gold is small. It is only our perception that makes it go up.

The key point to be made is that no matter what device we use to act as, "Money" (Gold or Cattle) the secret sauce that has to be perceived by people is that it cannot be varied (messed with).

Investors around the globe are beginning to sense that central banks and governments have messed with the current money stock too much.

This, we suspect, is why gold is moving up in price.

So what will be in your wallet?

We doubt that it will be golden cows.

Paper money is hear to stay.

Our central banks and governments just need to stop messing with it

Have a balanced day,

From, the BalanceZone Team

How Long Would You Stay Seated?

2010-06-04T10:17:00.001-05:00

How long would you stay seated?

Suppose I had a magic eye dropper and I placed a single drop of water in the middle of your left hand. The magic part is that this drop of water is going to double in size every minute.

At first nothing seems to be happening, but by the end of a minute, that tiny drop is now the size of two tiny drops. After another minute, you now have a little pool of water that is slightly smaller in diameter than a dime sitting in your hand.

After six minutes, you have a blob of water that would fill a thimble.

Now suppose we take our magic eye dropper to Fenway Park, and, right at 12:00 p.m. in the afternoon, we place a magic drop way down there on the pitcher’s mound. To make this really interesting, suppose that the park is watertight and that you are handcuffed to one of the very highest bleacher seats.

My question to you is, “How long do you have to escape from the handcuffs?” When would it be completely filled? In days? Weeks? Months? Years? How long would that take?

The answer is, you have until 12:49 on that same day to figure out how you are going to get out of those handcuffs. In less than 50 minutes, our modest little drop of water has managed to completely fill Fenway Park.

Now let me ask you this – at what time of the day would Fenway Park still be 93% empty space, and how many of you would realize the severity of your predicament?

The answer is 12:45.

If you were squirming in your bleacher seat waiting for help to arrive, by the time the field is covered with less than 5 feet of water, you would now have less than 4 minutes left to get free.

And that, right there, illustrates one of the key features of our economy and the financial markets.

The action really only heats up in the last few moments and unless we are prepared with a strategy to deal with exponential growth, we are sure to drown. BalanceZone Investing is a potential strategy to defend against this type of turbulence.

We sat in our seats for 45 minutes and nothing much seemed to be happening, and then in four minutes – bang! – the whole place was full.

Have a balanced day,

From, the BalanceZone Team

Are Money Markets Safe?

2010-06-04T08:10:00.002-05:00

Q: How safe are money market funds these days?

A: Great question. We are wondering ourselves.

Technically, a money market fund is a mutual fund.

They can, and have fallen below the coveted $1.00 price.

99% of the time, they stay fixed at the $1.00 level.

The problem is two-fold:

Interest rates on short term bonds are below 1%.

The costs for many money markets are higher than the yields on the bonds that they invest in.

Money markets may go away. There is no product: No Bonds. No Yield. No benefit.

Given the ubiquitous nature of the money market fund and the importance they carry, we think that governments and regulators will do everything in their power to keep these funds stable.

What we anticipate is a massive effort by the money market funds to push people to alternative short term income investments. The SEC and FDIC have already put forth systems in place, if need be, to make sure that this transition would be slow, smooth and orderly. Or so they hope.

For now, we say safe. But please know we are watching this situation very closely.

Thanks for the question.

Have a balanced day,

From, the BalanceZone Team

The Most Terrible Pain---

2010-05-25T02:12:00.004-05:00

THE MOST TERRIBLE PAIN IS TO FEEL ALONE AND UNWANTED.
THE MOST INSATIABLE HUNGER IS FOR APPRECIATION AND LOVE.

THE CURE IS IN THE LITTLE THINGS, DONE WELL AND WITH KINDNESS EACH DAY FOR THE SAKE OF HIS CREATION, IN GRATITUDE FOR HIS LOVE.

GRADUALLY THAT LOVE, WHICH ALWAYS SURROUNDS US, WILL BECOME KNOWN TO US AND ILLUMINATE US LIKE THE DAWN, AS WE OPEN OUR HARDENED HEARTS TO IT. AND WITH IT COMES A HOLY REST, AND PEACE AT LAST.

NEED LITTLE, WANT LESS, LOVE MORE. Arthur Cutten.

Have a balanced day, From, the BalanceZone Team

Hostess Twinkie Economy

2010-05-24T11:52:00.000-05:00

We have a, "Hostess Twinkie Economy".

There is no nutritional value in 0% interest rates.

It's not natural.

It's not healthy.

People can't stand earning 0%.

Unfortunately, this forces savers to become speculators instead of long-term investors.

Don't be a speculator.

Be a patient BZI investor.

Focus on the out of favor investments. Make a wish list.

Stay away from the flavorful trendy stuff.

Wait patiently.

Watch your scale.

And when it tips too far.....pounce.

Ash In The Air, Oil In The Sea & Blood On The Streets (Wall Street)

2010-05-21T09:59:00.001-05:00

Ash In The Air,

Oil In The Sea,

Blood On The Streets (Wall Street).

The markets are crazy right now and many investors are wondering what to do.

The good news for BalanceZone Investors is that no matter what the markets do, you have a strategy to deal with all types of markets.

Balance A Scale.

Keep an eye on your scale and remember the only way to balance your scale is to buy low and sell high even when there is ash in the sky, oil in the water and blood on the streets.

Have a balanced day,

From, the BalanceZone Team

BalanceZone Investing Helps Investors Invest Like A Venture Capitalist

2010-05-14T12:28:00.001-05:00

Most Venture Capitalists (VC's) keep a substantial amount of their assets in safe liquid investments and only allocate a small fraction of their net worth to risky investments (10, 20 maybe 30%).

VC's don't typically use complicated technical analysis, or economic formulas to make their investing decisions.

They simply listen to several, "Pitches".

Most of the businesses that VC's select fail.
But, the few that work are hugely profitable.

Once a VC sells or closes out a deal they typically take their profits and put them back into cash.

It's exactly like moving money from the right side of the scale to the left.

If you use the BZI strategy you will be thinking and investing like a Venture Capitalist.

This biggest problem with BZI is that it seems so simple that it is easy to dismiss the concept.

Don't miss-judge BZI.

Everyone can and should benefit from this elegant and simple concept.

Have a balanced day,

From, the BalanceZone Team

Macro Transactions V. Micro Transactions

2010-05-11T06:40:00.000-05:00

There are 2 types of transactions that you will do on your BZI scale.

Macro Transactions.

Micro Transactions.

Macro Transaction are moving money from left to right and right to left. With this type of transaction you are re-balancing your scale.

Micro Transaction are small individual transactions that stay on the respective side of the scale. With this type of transaction, you are not re-balancing your scale.

For example: You exchange 1000 shares of SPY for 1000 share of GLD. You keep this capital on the right side of the scale.

The point to make here is that no matter when, or why you make a micro transaction, you always look at the bigger macro transaction to see your safe to risk ratio.

Have a balanced day,

From, the BalanceZone Team

You Can Tune A Piano, But You Can't Tune A Fish

2010-05-10T15:28:00.000-05:00

Q: How do I know when to make a balancing transaction on my BZI Scale?

A: You, "Tune" your BZI scale. You don't, "Time" the BZI Scale.

Think of the scale as if it were a piano.

Eventually pianos get out of tune. No one knows exactly when a piano will get out of tune. But, when it happens you know.

The same is true with the BZI scale. No one knows exactly when your scale will get too far out of balance (tune). But, if you practice with the BZI Skill Builder, you will develop a feel for what works for you.

BZI is not a timing investment model.

BZI is a personal tuning model that puts you in the best possible position to buy low and sell high.

You can't tune a fish, and you can't always time the market correctly, but you can always control how you tune your scale.

The only way to tune/balance your scale is to buy low and sell high.

Have a balanced day,

From, the BalanceZone Team

The Dalbar 2010 QAIB Report Sites BalanceZone Investing As An Alternative To Modern Portfolio Theory

2010-05-06T11:32:00.000-05:00

We are proud. Dalbar & Associates has included BalanceZone Investing in their annual 2010 QAIB (Quantitative Analysis of Investor Behavior) report.

Traditional investment advice tells you to buy and hold. Set it and forget it.

While there is some evidence that this strategy can work, researchers are beginning to scrutinize this advice. Is the buy and hold strategy working for normal mutual fund investors?

No.

This year, not only did the report show that buy and hold isn't working for investors, it offered several alternative investment strategies for people to consider.

The Dalbar 2010 QAIB Report Sites BalanceZone Investing

As An Alternative To Modern Portfolio Theory.

Click Here for a free copy of the 2010 Dalbar QAIB Report.

Click Here to see what Forbes is saying about the Dalbar QAIB Report.

Click Here to see what Seeking Alpha is saying about the Dalbar QAIB Report.

Have a balanced day,

From, the BalanceZone Team

Wall Street Hates Simplicity---

2010-05-05T10:39:00.000-05:00

A few years ago, we were eviscerated by some so called, "Industry Experts".

These not so kind people said, "We are experts". We use complex mathematical formulas and software to solve our client's problems. We would never dream of using a simple scale to solve these very complicated problems. The picture above is an example of one of the beloved mathematical models that Wall Street experts love.

Wall Street loves complexity, and hates simplicity.

Simplicity does not lend itself to profits while complexity does.

Complexity is the fodder for the Wall Street perpetual confusion machine. As long as you stay confused, they stay in control.

We need to return to simple reliable, predictable and repeatable business practices.

Simple, when left in the hands of the everyday users, can lead to some amazing products.

No one could have imagined that those tube/transistors would someday make up a device as complicated as a cell phone.

Investing doesn't have to be complicated. When things are made simple, normal everyday people can do some amazing things.

The BZI is committed to simplifying investing for everyone. Even the Wall Street experts.

As Albert Einstein once said, "Everything should be made as simple as possible but not too simple."

Have a balanced day,

From, the BalanceZone Team

Federal Employees Learn How To Use BalanceZone Investing In Their TSP--

2010-05-03T19:28:00.003-05:00

Q: I am a federal employee and want to use BalanceZone Investing for my TSP. What funds go on the left and what funds go on the right?

A: We do not give specific advice. However, we will offer some general ideas for federal employees. If you can balance a scale, you can manage your money before and during retirement.

Try this:

G or F fund on the left side of the scale

C, G, I or L fund on the right side of the scale.

Click here to see the free version of the BZI Skill Builder.
With BZI, you have an alternative to the annuity payout options.

You have all the control.

You can generate more income.

At death, your money goes to your beneficiaries. Not the government.

You can stay with the same TSP funds that you have been with for the past 20, 30 or 40 years.

Creating a safe, long-term, dependable stream of inflation adjusted income has never been easier for federal employees.

If you can balance a scale, you can manage your TSP funds before and during retirement.

Retirement Systems Covered:
   CSRS,
   CSRS Offset,
   FERS, and
   CSRS to FERS Transfer

Federal Employees Covered:
   Regular,
   Postal,
   Air Traffic Controllers,
   Law Enforcement, and
   Firefighters and several others.

Have a balanced day,

From, the BalanceZone Team

Why Is BalanceZone Investing Better Than Modern Portfolio Theory?

2010-04-29T10:05:00.001-05:00

Q: Why is BalanceZone Investing Better Than Modern Portfolio Theory?

A: You have control not Wall Street.

Did you buy low and sell high? As Warren Buffet has often said, "That's all that really matters". If you use the BZI Scale correctly, then you will always be in a position to buy low and sell high.

As long as your money is buried in a managed model like MPT, you can't easily see if you are buying low or selling high. You are blindly trusting that the model works.

However, when your money is measured on a scale (safe on the left, risk on the right), you can see when to buy low and sell high.

While we can't control what the markets do, we can control how we respond to them.

Have a balanced day,

From, the BalanceZone Team

What Is A Synthetic CDO?

2010-04-24T09:16:00.000-05:00

Q: What exactly is a, "Synthetic CDO"?

A: The leaning stack of Jenga. See the picture to the left.

First, let's look at how a plain, "CDO" is created. A CDO's can be created by anything that generates a cash flow.

Just go out and buy a bunch of bonds, pack them together in different ways, and sell the new creation to investors.

By slicing and dicing and stacking these cash flows in different ways you are allocating risk in a more diverse way than the original bond did by itself. This is a healthy market function. Congratulations! You have just created a CDO.

(The first Jenga piece/level in the picture is the original bond. The second is the CDO, and the third is the Synthetic CDO.)

It's when you add the word, "Synthetic" that we start to see instability.

A Synthetic CDO can only be created when somebody buys default insurance (Credit Default Swap) on your CDO bonds. These Synthetic CDO's are a bunch of insurance policies that are gathered up and sliced and diced into various cash flows, assigned various risk ratings, and then sold to investors.

The problem with this is that SCDO's are a negative zero sum game.

They are sold as bonds which help create capital, but in reality, they are destroyers of capital.

Negative Zero Sum is -- Only one winner and One Loser, but the investment bank who set up this game gets to take their fees from both players. When the game is over, the market has less capital.

Up until the last few years, true capitalism was a combination of zero-sum games and non zero sum games.

Zero sum is -- 1 + -1 = 0 (Only one winner and one loser per game)

Non Zero sum is -- 1 + 1 -1 = 5 (Cooperation can produce more stuff than the sum of its parts)

Negative Zero Sum is -- 1 + 1 = 1.5 (the missing .5 are Wall Street's fees)

Every time this non zero sum Synthetic Collateralized Debt Obligation game is played, one of the Jenga pieces (the market) gets a bite taken out of it by the investment bank who set the game up.

Play this game too much, and you can begin to see how SCDO's can make the market vulnerable to severe crashes.

If this didn't explain what a Synthetic CDO is, then watch the video below.

Have a balanced day, From, the BalanceZone Team

Never Again Lose Money In The Stock Market?

2010-04-21T20:00:00.001-05:00

Q: Just so that I understand this. All that that I have to do is balance a scale, and I will always buy low and sell high with your BalanceZone Investing concept? Is it really that simple? There has to be a catch. You must have some type of timing or selection methodology. Right?

A: It really is that simple.

There is no catch. The only potential drawback is... you.

It's up to you to keep your investments updated on the BZI Statement Consolidator and watch to see if your scale tips too far out of your comfort zone.

That's it. The only way to bring the scale back to balance is to buy low and sell high.

Click here to test drive the BZI Scale.

Over the last ten years, we've tried to find investments and situations where this concept failed. We haven't found one yet. That doesn't mean that it couldn't or that it won't fail. And to be clear, there were times when our final results weren't that impressive. If you find a situation where it fails, then PLEASE share it with us.

While you cannot control future market events, you can always control how you respond to them.

The BZI Scale gives you a simple behavioral code of conduct to navigate through all types of market conditions.

If you can balance a scale, you should effectively eliminate all self-inflicted wounds (buying high and selling low).

It really is that simple.

Have a balanced day,

From, the BalanceZone Team

Taser Handcuffs For Goldman Sachs?

2010-04-18T09:58:00.005-05:00

Q: How would the BZI Team handle Financial Reform?

A: Taser-Handcuffs.

We would place Taser-Handcuffs on the people who were responsible for abusing our financial markets. The links on these Taser-handcuffs are easily broken, and the shock they deliver is painful.

Every time a cuffed person goes to the bathroom, eats or decides to play golf, they get popped.

Unfortunately, what many of the creators of, "Dead Debt Body Bags" (Derivative Securities) did was morally bankrupt, but probably not illegal.

No doubt, we need new rules. But just placing new rules up in front of these smart people is like placing fence posts up in the middle of an open field. It's not enough.

Therefore, the real question is: how do we stop immoral acts that are technically legal?

We think that you have to simultaneously tether rules, incentives and punishments in order to get a true change in behavior and restore trust back into the financial markets.

We would create some new rules and new incentives, and then we would cuff'em.

Have a balanced day,

From, the BalanceZone Team

Investors Don't Act Like Spock. They Act Like Captain Kirk

2010-04-08T06:29:00.000-05:00

Q: Can you clarify how BalanceZone Investing is different from Modern Portfolio Theory?

A: Yes.

Traditional investment theories (MPT) assume that you are a Vulcan (great at math during stressful situations and void of emotion).

We are guessing that you aren't a Vulcan like Spock.

We are guessing that you are human like Captain Kirk.

Captain Kirk wasn't always rational, but he was an excellent pattern recognizer and pattern completer.

We are assuming that you can tell when a scale (pattern) gets out of balance.

We are also assuming that you know how to balance (complete) a scale (pattern).

When the phasers get pulled out, it easy to balance a scale, but it's hard to calculate covariance and coefficients.

BZI takes a human approach (Captain Kirk) not a Vulcan (Spock) approach to investing.

CLICK HERE to "Beam up" to our website and learn more about how BalanceZone Investing is different from Modern Portfolio Theory.

Have a balanced day,

From, the BalanceZone Team

Scarcity V. Ubiquity

2010-04-05T15:57:00.001-05:00

Q: Why not just buy an "Index Fund"? After all, the 80%-90% of all mutual funds don't out-perform the index that they are measured against. So why pay the higher fees of a regular mutual fund? There is over 80 years worth of proof to back this fact up. The evidence is overwhelmingly slanted towards Index Investing isn't it?

A: History is a funny thing. While there are most definitely trends and patterns that we can follow, history has never and will never repeat itself in the exact same way under the exact same conditions.

We think there are two reasons why investing in the index funds might not be as good as an investment strategy as it appears to be from a historical perspective. The indices are no longer scarce, and we are using/abusing them in very new and different ways.

1) The Scarcity Problem.

The idea of buying an "Index Fund" is a fairly new thing. Forty years ago, most average investors could not buy an "Index Fund(s)". Investors used the Indexes as benchmarks, they did not invest in them. In a strange way, while the indices were and are ubiquitous, the opportunities to invest in index like investment vehicles was scarce.

This is no longer the case.

Everyone is buying and driving to the same place for the Holy Grail of high returns.

POOF!

No more scarcity. Everyone on the planet is driving to the same 35 hubs.

Congestion!

Now this is interesting. The same problem the imbues a busy airport, is the same problem that will eventually cause the index funds in our opinion, to slow down (not deliver similar historic rates of return).

2) The indices aren't as passive as they use to be.

Getting included in an index wasn't that big of a deal 30 years ago. Sure, it was a big deal, but not like it is today. Today, if you get included you are virtually guaranteed a certain flow of money because everyone is investing in index funds. There is an unspoken financial dating ritual that goes on between publicly traded companies that want be be included in a certain index and the entities that manage the companies that make up the index. Consequently, the turnover in the indexes is starting to become rapid.

What use to be a very passive process has by default or by accident become an active process.

When you begin to deconstruct why the Indexes themselves have outperformed the actively managed funds, you can begin to see why they might not perform as well in the future given how we are now using them. We have sucked all of the passivity, and scarcity out of them and made them ubiquitous.

Good investment opportunities have always been tethered to scarcity---- not ubiquity.

Have a balanced day,

From, the BalanceZone Team

Question From A Financial Adviser--

2010-03-26T11:54:00.000-05:00

Q: I am a financial advisor. I am thinking about implementing BZI into my practice. With all of the different products and pricing models available, how would you recommend I set up my pricing and products for my clients?

A. For the right side of the scale, most advisers use some type of, "AUM" model and or use A share mutual funds.

For the left side, they open up a separate account and create a bond ladder.

There are other advisers who use a traditional commission structure. While many people are opposed to a full commission structure, it is by far and away the most cost effective way to implement BZI from a client perspective.

As for products, we don't care what you use.

Remember that there are two modes that BZI works in: Accumulation or Distribution.

While the financial intent for both is the same (balance a scale), it is essential to select the appropriate products for the mode that you are operating within.

Have a balanced day,

From, the BalanceZone Team

In Response to our last post----

2010-03-23T07:26:00.001-05:00

Q: Many of you have asked for a clarification of our statement, "Give us back our checkbook" from our last post.

A: Look at the picture. We found this picture on the Martin Weiss web site.

Specifically, from September 10, 2008 to March 10 of this year, Ben Bernanke has taken us from $850 billion to $2.1 trillion in money.

That's a lot of check writing in 18 months.

We understand the theory behind an elastic money supply. But, we do feel that Ben has seriously abused the congressional authority that we have given the federal reserve to write checks on our behalf.

Have a balanced day,

From, the BalanceZone Team

We can no longer allow the Federal Reserve to keep our checkbook from us.

2010-03-13T09:14:00.003-06:00

Remember the song, "I wish I were an Oscar Mayer Weenier"? We've changed the words just a bit.

Give us back our checkbook Mr. Bernanke.

We've had about as much as we can stand.

For years we've been faithful paid up debtors, but now we'll just Twitter money on demand.

Let us explain---

We need to get our checkbook back.

We can no longer allow the Federal Reserve to keep it from us.

We need to get our checkbook back.

When we started BalanceZone Investing, we accepted a trade off.

The trade off was this:

The way our fractional reserve banking system was designed, our dollars would be devalued by about 3% on a annual average basis. This perpetual devaluation of our currency was the number one risk we tried to combat.

By printing money at this rate, and making credit easy to obtain, the Federal Reserve created a fertile ground where commodities, real-estate, and equities could consistently earn 8% to 12% over long time periods.

We've made more technological improvements in the last 100 years than we made in the last 7000 years combined.

We weren't wild about this devaluation, but we found it to be an acceptable trade off.

But now we are beginning to worry. We are not sure that our Federal Reserve and the other central banks of the G20 know how much money/debt is really in circulation.

The central bankers around the world were asleep at the wheel.

According the the Bank of International Settlements, the total notational value of all the derivative securities on the planet exceeds 600 trillion. And this is just what they know about. (The BIS acknowledges that there may be more.) To put this in perspective the global GDP is 62 trillion. Total orthodox global debt is 32 trillion (this 32 trillion figure doesn't included unfunded future liabilities because it is virtually impossible to get a complete look at this black hole of data).

How did this happen? The investment banks around the world worked on the predicate of: No collateral, no rules and no record keeping. How did they do this?

SWAP.

By using the word "Swap" instead of investment and insurance, technically these contracts were not contracts. They were swaps. Hence, the insurance and or investment regulators did not have the legal authority to regulate them. They were not insurance and they were not investments. They were swaps. The regulators could see and smell these nasty dead debt swap body bags, but they couldn't legally regulate them. And to take this point one step further, as Alan Greenspan said, "I trusted that bankers would work in a moral and fiduciary capacity and therefore did not feel the need to pursue regulating these off balance sheet items. I now know that I was wrong."

Central banks and governments are now incensed, bewildered, and horrified. How do you tell your citizens that you let a few of your friends at various investment banks and hedge funds steel from the central banks in the very same way that central bankers depleted citizens wealth? The very rule book that enabled governments to take, "Spending Gone Wild" to new frontiers and quietly pit savers versus speculators was now being used against them by their own kind.

What's next?

For now the answer is sad for citizens across the globe. All central bankers have the pumps turned on full blast spewing out fiat currency. From a central bankers perspective, the only way to land 600 trillion dollars of dead debt swap body bags, is to get everyone to agree and take turns bringing their derivative securities in for a landing at their respective central bank.

Once landed, they can be acknowledged, recored and closed out with new cash courtesy of your friendly central banker. Unfortunately, when the banker pays par value for the dead debt body bag he/she simultaneously debases your wealth/currency.

If you are wondering what a toxic asset (dead swap debt body bag) is , Click here.

If this process is orderly, then the central bankers will eventually get back the control that they lost, your currency will be devalued, and we'll have millionaires asking for food stamps.

If this process is not orderly, all bets are off.

Orderly or not, the net result for citizens is that we have been financially disemboweled.

The velocity of devaluation is too fast.

The only way a normal citizen can keep up with this massive devaluation is to purchase triple leveraged investment products and strategies.

And oh! How well we all know... Leverage can be a fickle bitch!

We don't respect these terms.

As it stands now, central bank's strategy seems to be:

Deny everything, admit nothing and make counter accusations. Put the focus on health care, war, or Sarah Palin.

We feel that a new form(s) of currency will eventually percolate. While there are several monetary theories and systems that can be adopted, we feel that no matter what strategy or strategies are adopted, we must be able to measure and monitor the currency at all times.

We need to get our checkbook back from the central bankers.

It is clear that our federal reserve, and the other central bankers around the world will fight to the end to keep our checkbook from us.

We need to get our checkbook back.

In closing, let's sing together the Federal Reserve Oscar Mayer Weenier Song----

Give us back our checkbook Mr. Bernanke.

We've had about as much as we can stand.

For years we've been faithful paid up debtors, but now we'll just Twitter money on demand.

Have a balanced day,

From, the BalanceZone Team

Alternative Strategy To Modern Portfolio Theory

2010-03-12T14:15:00.002-06:00

Q: Is BalanceZone Investing an alternative methodology to Modern Portfolio Theory?

A: We get this question quite a bit.

Technically, BalanceZone Investing is financial intent.

We do not generate specific buy, sell or hold indicators and we do not assume that correlations equal causation. We are not trying to optimize wealth. We are trying to help you sustain your wealth.

MPT is a huge, elegant and powerful plan.

BZI is a small, compact and powerful financial intent.

The entire concept is built on the belief that no plan survives contact with the enemy. (Just ask anyone who has ever been in combat or coached youth soccer).

The BZI mission is clear, simple, easy to remember and virtually impossible to forget.

Balance A Scale.

How do you do this? Buy low and sell high----- Always.

As you long time readers know, the only way to balance your scale is to buy low and sell high.

We could make the case that we are an alternative investment strategy to MPT. However, we like to think of BZI as an investment tool-set that you can use in conjunction with your financial plans.

Plans are great, but when you make contact with the enemy, you had better have a clear command intent on what your mission is.

As a suggestion, show the BZI web site and blog to your peers, family and friends and ask them what they think? While we have our opinions about our tools, we are more intrigued to learn how you are using them and what your thoughts are about BZI.

Keep the questions coming......

Have a balanced day,

From, the BalanceZone Team

Polling 308,798,000 U.S. Citizens--

2010-03-04T07:14:00.002-06:00

How effective are polls?

Next time you hear someone say, "According to the most recent poll" remember this. There are:

308,798,000 U.S. citizens.

You cannot ask everyone what they think in a timely fashion.

Polls are handy tools that allow us to address this problem.

Keep them in perspective.

Most polls survey less than 100 people at a time. This means that with the average poll in America:

One person gets to speak for 3 million people.

Have a balanced day,

From, the BalanceZone Team

People V. Banks--- SNL Gets This One Right.

2010-03-03T21:22:00.000-06:00

Funny or Die's Presidential Reunion from Will Ferrell

Will the comedians save our economy?

We hope so.

Have a balanced day,

From, the BalanceZone Team

What Do The Financial Markets Want?

2010-03-02T14:22:00.000-06:00

We think that financial markets want to create the potential for difference. They want: freedom, choices, and possibilities.
How do they survive? Hacking. Markets become successful and expand in their complexity when evolution and extinction are given the chance to percolate. They must allow for hacking.
Who wins and who loses? The winners are the one's who understand best what the market wants. The losers are the ones who cling to what they want while dismissing what the market wants.
Who gets to make the rules? You. It is baked deep into our DNA that hacking isn't fair. And lately, there has been a lot of hacking. The solution? Respond with ability. Expect hacking. But don't hack back. While you cannot control the markets, you can always control how you respond.

Markets do not lose money. People do.

We feel that we have a moral obligation to promote these concepts. Virtually everything that you enjoy about your life is a by product of some type of technological innovation, that was backed by the financial markets.

It's easy to get mad at the hackers.

---Buy, "Understanding" and sell, "Anger".---

After evolution or extinction, entities restructure chaos by self organization. It is when we restructure the chaos and then find new ways to use it that our lives get better.

Nothing good can come from taking a bath in hacker anger everyday of your life.

It is strange that what the financial markets want is exactly the opposite of what humanity/governments want.

While keeping things in a perpetual state of equilibrium might feel nice, it's not what the markets want.

Have a balanced day,

From, the BalanceZone Team

Wall Street Should Take Some Apology Lessons From Tiger Woods

2010-02-19T21:45:00.001-06:00

Tiger's apology was good.

It opened up the healing process. It opened the door for forgiveness.

Wall Street should take note.

If the bankers want to get investors confidence back, they need to apologize.

If the regulators want to restore faith, they need to put some bankers in jail.

The true currency of all markets is faith.

In the absence of apologies and punishments, our financial markets will most likely end up a triple bogey.

Hey Wall Street--- It's time to, "Tiger Up".

Have a balanced day,

From, the BalanceZone Team

U.S. & China -- Frog & Scorpion

2010-02-17T09:00:00.000-06:00

Q: China is starting to sell US Bonds. Does this mean that interest rates will be moving higher?

A: We don't know. But we like the question. Here's a perspective that you might want to consider.

China and the U.S. aren't bonding that well. China's top officials are calling to dump U.S. bonds. They are upset about the recent 6 billion dollar arms sales to Taiwan and the meeting with the Dalai Lama.

This dynamic reminds us of the story about the frog and the scorpion.

The scorpion want's to cross the river.

The frog says, you can ride on my back but I don't want you to sting me, because I know you.

Scorpion says, no I won't, if I sting you, we'll both drown.

Halfway through the river, the scorpion stings the frog. The frogs asks, "Why did you do that?" And the scorpion replies, "It's my nature".

We don't think that U.S. & China's relations will go to this extreme.

We've been waiting to sell arms to Taiwan, and China has been looking for reasons to sell U.S. Bonds.

U.S. bonds represent approximately one third of China's reserves.

Selling 34 billion in U.S bonds is China's way of diversify their holdings and reminding us that they have a really big stinger.

Have a balanced day,

From, the BalanceZone Team

Economic Indicators That You Can--- See

2010-02-17T07:55:00.001-06:00

Q: What economic indicators do you feel are important in helping an investor see trends in the market?

A: There are two that we especially like:

Inbound/Outbound Container Ship Report --

Unemployment Insurance Weekly Claims Report

Anyone can easily, "SEE" if these lines are expanding or shrinking.

Stop C.O.K.A.F.ing US!

2010-02-15T20:42:00.003-06:00

Define: C.O.K.A.F.

Complexity + Opaqueness Kills American Families.

This is the secret recipe for profits for the health, fuel and financial industries.

To the, "Wizard's of Smart"

PLEASE stop, "COKAFing" us.

Have a balanced day,

From, the BalanceZone Team

Can Hedge Funds Work With BalanceZone Investing?

2010-02-11T08:25:00.000-06:00

Q: What do you think of hedge funds? Can we use a hedge fund on the right side of the scale.

A: A hedge fund is a fund that dynamically loses money in every conceivable interest-rate environment, but remains perfectly hedged in all conceivable interest-rate environments.

Yes. You can put a hedge fund on the right side of the scale. Click here if you'd like to read a great definition of what a hedge fund is from Wikipedia. Be careful.

Have a balanced day,

From, the BalanceZone Team

Amazing Graphics of Unemployment---

2010-02-09T11:02:00.000-06:00

Have a balanced day,

From, the BalanceZone Team

Request for Information From The DOL Regarding Lifetime Income Options for Participants and Beneficiaries in Retirement Plans

2010-02-07T07:14:00.008-06:00

Q: The Department of Labor is wondering if they should offer, "Lifetime Income Options" for 401k plans. Is this a good idea?

A: If we let a little air out of the 401k's tires, we think so.

Allow us to explain. It's not what you think.

A truck got stuck under a bridge. The bridge was hugely important to this particular community. There was no money in the budget to fix a broken bridge. If the bridge was damaged, the results would be catastrophic for the economy. Experts from around the world were brought in to come up with a solution. They had no luck.

An 11 year old riding his bike by this fiasco said, "Let the air out of the tires".

It worked.

"Let the air out of the tires".

***

Our, "Let the air out of the tires" solution for the DOL's "Lifetime income option" is:

Bifurcate the monthly 401k statements.

There is no cost with our solution.
There is no financial literacy program to implement with our solution.
There is no need to offer or create new financial products with our solution.

Treat the statement like a scale (scale of justice). Spend from the left, invest on the right.

To see an example of a bifurcated statement click here.

To see an example of how to create a lifetime income by balancing a scale, click here.
Request for Information Regarding Lifetime Income Options for Participants And
Have a balanced day,

From, the BalanceZone Team

We Are Financially Agnostic--

2010-02-04T17:39:00.000-06:00

Q: Why don't you ever give specific investment advice?

A: We are financially agnostic.

It doesn't really matter to us what you put on top of your scale. Everyone has different beliefs, strategies and preferences.

With the BZ Skill Builder, we are only trying to show you that the BZI concept works and that you cannot predict the future.

We assume that you will place your own investments on top of the scale and that's why we invented the
BZ Statement tool.
Have a balanced day,

From, the BalanceZone Team

When You Are Explaining, You Are Losing--

2010-02-02T08:56:00.001-06:00

Q: I am an Human Resources Director. We have very low participation in our 401k savings plan. We've tried everything to increase participation. To date, nothing has worked. We are looking for some, "Out of the Box" ideas that might increase 401k participation. Any suggestions?

A: When you are explaining, you are losing.

In a recent episode of the TV sitcom, "Modern Family" the husband tries to explain to his wife how the new remote control for the home theater system works.

It is funny! And it proves that when you start explaining, you lose.

This is true for remote controls and financial literacy.

In both cases, true learning doesn't come from the, "Wizards of Smart".

True learning comes from, "SHARING".

It happens in private, with people who you trust.

We know what we know, and we don't know what we don't know.

Our suggestion is to simply tell your employees about the BalanceZone Scale, and have them share it with a co-worker, family member or friend.

When you are explaining, you are losing.

When you are sharing, you are winning.

Have a balanced day,

From, the BalanceZone Team

Ice Ice Baby--

2010-01-29T09:44:00.004-06:00

Q: How will the reappointment of Ben Bernanke affect the stock market? Does this affect the BalanceZone Scale Strategy?

A: We don't give specific investment advice, we only comment on what we, "SEE". What we "SEE", is a global financial climate shift from a fire based economy to ice. We think that this will change what you put on the scale, but the scale works the same in either climate.

Our economy, for the last two centuries has been ruled by fire (easy credit). This easy credit almost caused a global financial inferno.

Bernanke, and his entourage put the easy credit fires out by bringing rates down to a frigid 0%, and pouring massive amounts of freezing cold money into the banking system.

Easy Hot Credit gone.

Hard Cold Credit------ here for a long time.

Harvard clap! There's not enough fuel left to start another financial inferno.

Now what?

Our guess is that our financial markets will act like massive miss-placed icebergs in the desert. The thermo-dynamics of the financial markets have changed. They won't go away, but they will slowly melt and get smaller for quite some time. This massive change will create once in a life time opportunities for those who stay optimistic and open to new ideas.

Consequently, the way you invest, and what you look for probably needs to change.

What worked in a fire-based economy probably won't work in a ice-based economy.

You can thrive in both types of climates. But you need very different gear, and strategies to survive.

Ice is the new fire.

So how do you make money in this new climate?

Buy innovation --- Sell insulation.

This transition won't be easy at first, and it will take some time to get use to the new temperatures. Our natural tendency will be to reach for insulation first and innovation later.

Don't make this mistake.

As long as our government promotes innovation over insulation, then we feel confident that new opportunities, tools and strategies will eventually percolate.

If the auto industry can go from the Pinto, Pacer, and Gremlin to the Prius, Fusion, and Leaf, then our economy can thrive in sub-freezing temperatures.

So, does the re-appointment of Ben really make a difference? We are not sure. But we feel fairly certain that the financial climate has changed.

Who would have ever guessed that Vanilla Ice gave such good investment advice!

Ice Ice Baby.

Have a balanced day,

From, the BalanceZone Team

Elizabeth Warren Explains The Problem With Wall Street Investment Bankers

2010-01-28T22:31:00.000-06:00

Click here to contact your senators.

Have a balanced day,

From, the BalanceZone Team

Stacking Poop

2010-01-28T09:59:00.000-06:00

Insurance, reserves, and diversification.

These three time-tested risk management techniques work well at scooping, managing and transferring risks.

But now, we unfortunately have a very popular 4th. risk management technique:

Stacking--

Stacking is: Gaussian based financial theories built using optimization techniques that are predicated on the belief that correlation equals causation.

The basic premise of, "Stacking" is that as long as your assumptions about your models and your correlations are correct, then you can stack your risks on top of one another thereby creating the illusion that you have minimized risks, and maximized returns.

Poof! Poop/Risk is nowhere in sight.

The unfortunate consequence of stacking is that while you are on planet earth, gravity always works and correlations don't always equal causation. And this is the problem---

Your 401k, IRA's, Brokerage Accounts, Money Managers, Mutual Funds, ETF's, etc... are almost all built from, "Stacking" models.

Consider this:

What if your neighbor's dog poops in your house? Who's risk/problem is it? How are you going to deal with it?

If we draw from the original three risk management tools, the answer is simple. We could buy insurance, hold back reserves ourselves to deal with potential poop, or we could diversify where we live, limit where dogs go, and get as creative as we like so that we can reduce the probability of having a neighbor's dog poop in our house.

These concepts help us sustain our quality of life, but they don't easily lend themselves to optimizing our lives.

No one really wants to scoop the poop.

But with Stacking, for a small, one time fee, you can buy a (financial model) drone and elevator that picks and lifts the poop away (Or better yet, let's just have it included in your mortgage or call it a 12b1 management fee). You never have to scoop the poop. You are optimizing your time and dollars so that you can have more free time to consume more expensive stuff.

Out of sight, out of mind? Better life less risk?

No.

When everyone stacks poop, it unintentionally increases risk over time.

Poop happens.

"Stacking" by itself is not the problem. It is our excessive dependency on, "Stacking" that creates the foul oder that we can't see.

With the BalanceZone Investment Tools and methodology, there is no stacking.

We diversify your portfolio into two separate parts (safe/risk).

We advocate that you to keep ample reserves at all times.

We offer the best insurance in the world. YOU. If you can balance a scale, you can, "Insure" that you will always be buying low and selling high.

True, it's not a lot of fun to scoop poop, but given the economic travesty that we are having to deal with it's becoming increasingly clear that ----------

Nothing good can come from stacking poop.

Have a balanced day,

From, the BalanceZone Team

One crisis every three years---

2010-01-27T16:23:00.003-06:00

One financial crisis every three years.

Since the mid 1980's when, "Financial Engineering" became the Wall Street rage, we have had a financial crisis percolate once every three years.

Latin America's debt debacle, the Crash of 87, the Savings and Loan fiasco, the Mexican financial crisis, the Asian financial crisis, Long Term Capital Management catastrophe and it's aftermath, the the dot-com boom and bust, Enron, and now,... TBTFB (Too Big Too Fail Banks).

As long as the, "FE's" roam the planet, you can rest assured that another crisis is in the making. Keep more cash, take less risk, and when another crisis percolates, take advantage of it.

Just think of what your returns would be if you bought after all of these events?

Have a balanced day,

From, the BalanceZone Team

It's Time To Get MADD AT The Bankers--

2010-01-19T11:32:00.010-06:00

Would you vote for legislation that made it OK to drink and drive? Unless you are an alcoholic, probably not.

Would you vote for legislation that made it OK to drink and bank? Unless you are a bankaholic, probably not.

Unfortunately, for American Families, Senator Dodd, and the Senate Finance Committee are acting like bankaholics and they are desperately clinging to the old rules that let them bank and drink.

These drunken banker rules are now being challenged by America's number one Über financial mom, Elizabeth Warren.

She wants to make drinking and banking illegal.

She is the head of the Consumer Financial Protection Agency.

It is rumored that the bankers have successfully convinced the Senate Finance Committee, that her committee is a bad thing, and that drinking and banking is a good thing. The SFC is going to vote on the fate of the CFPA in the next two weeks, and it doesn't look good for Warren and American Families.

The bankaholics have made the case that their world is too complex for average people to understand and regulate. To allow normal people to make rules that govern their behavior would potentially cause financial armageddon. This argument is shrouded in the idea that, "We don't need more government, we need less government.".

The irony to this objection is that Warren is advocating for: smaller, simpler and more transparent government.

If the constitution was written on just four pages, don't you think that we could do it for a loan application, credit card, and 401k too?

Warren, and her group would hire new regulators. They would establish new rules. They would bring financial dignity back to the American family.

MADD (mothers against drunk drivers) worked to change an entire country's attitude about drinking and driving. When rules are made by Mom's, they work.

Elizabeth "Mom" Warren and the Consumer Financial Protection Agency are MADD.

They want to put an end to drinking and banking.

We must contact Senator Dodd, and the SFC and tell them that we want them to vote for the Consumer Financial Protection Agency.

The financial industry wrote the rules that allowed it to act recklessly. They cannibalized financial regulators and agencies, and then replaced them with their own cops. Controlling the rules enabled them to create deceptive financial schemes that made them wealthy and you poor. This perpetual loop of opaqueness and complexity is how Wall Street killed Main Street. They made it legal to drink and bank.

The bankers, "South Park like behavior" eventually brought the biggest banks to the brink of collapse. Scared for their own lives, they then sent Hank Paulson into see #43 to play the largest game of liar's poker in the history of the planet. "Give me all of your money, or the earth blows up". #43 blinked.

The bankers won.

American families pay for the bankers drunken mistakes.

Luckily, there is one more chapter in this liquored-up murder mystery and you have a say so in how it ends.

We must tell the Senate Finance Committee to not let the industry continue to write, make and break the rules.

We must stop the financial abuse.

We must stop drinking and banking.

The fate of your financial future is at stake.

This agency is our best chance to get our wealth and dignity back.

We cannot allow for American Families to get sucker punched by Wall Street again!

We got MADD at drunk drivers.

It's time to get MAD at drunk (Wall Street Investment) bankers.

Call your senator's, it's time to get financially, MADD.

Have a balanced day,

From, the BalanceZone Team

Levers Give You Leverage

2010-01-19T06:51:00.000-06:00

The BZI Scale is technically a, "Lever".

It gives investors, "Leverage".

Learn to use this lever, and you will be able to apply to most powerful investment concept that Wall Street has ever created: Leverage.

The good news is that with this type of leverage, you don't have to borrow any money.

You just have to know how to balance a scale/lever.

The BZI Scale doesn't create money, it transforms wealth from Wall Street to you.

Archimedes, the inventor of the lever once said, "Give me a place to stand on, and I will move the Earth".

With the BZI Skill Builder and BZI Statement Tool, our intention is to give everyone a place to stand.

Have a balanced day,

From, the BalanceZone Team

The More You Touch It, The Smaller It Gets---

2010-01-09T16:23:00.000-06:00

Q: I've been to your web site and worked with your BZI Skill Builder several times. I've noticed that the less I re-balance the scale, the better my results. Why is this?

A: Money is like a bar of soap. The more you touch it, the smaller it gets. With BZI, you don't want to re-balance the scale too often.-- Less = More.

Quarterly, Semi-Annual or Annual re-balancing might feel like a good idea. But, in reality, it can have the unintended consequence of making your bar of soap/portfolio smaller.

The more you touch it, the smaller it gets.

Have a balanced day,

From, the BalanceZone Team

100% in 5 days -- 8% in 12 Years.

2010-01-07T18:31:00.001-06:00

It's always faster to make money on crashes, than to make money on the way up.

Don't try to predict the crashes. Just respond appropriately to them when they show up.

Have a balanced day,

From, the BalanceZone Team

Indulgence Certificates For The Fed. Found On Keebler Elf Tree

2010-01-05T09:02:00.002-06:00

Apparently, Time magazine found an indulgence certificate hanging from the Keebler Elf Tree that not only forgives the sin of debasing our currency-----it makes you, "Man of the year".

We think these pictures look a bit lopsided. As a balanced suggestion to Time Magazine's, "Man of the year", we'd like to offer him a scale.

Now, all that we have to do is convince him to use it!

Have a balanced day,

From, the BalanceZone Team

Zimbabwe

2010-01-02T10:05:00.000-06:00

This a picture of the stock market for Zimbabwe in 2007.

Below is a picture of the monthly inflation rates in Zimbabwe and a link to a fascinating article from our friends at Zero Hedge that asks the question,
Who Is Responsible For The Non-Stop Market Rally Since March?

Zimbabwe

This makes you wonder, if the Fed keeps printing new money, could we see a Dow at 20,000?

It's possible.

Then, again a Dow at 5,000 is possible too. So, as always, no BS predictions, just remember, "BMS" (Balance My Scale) and you'll have a strategy to survive and thrive no matter what Mr. Market decides to do.

Have a balanced day,

From, the BalanceZone Team

Aristotle Takes His Son To The Federal Reserve--

2009-12-31T08:48:00.000-06:00

Being the deep thinker and educator that he is, Aristotle took his son to the Federal Reserve to learn about capitalism.

They left disappointed. Capitalism was no where to be found.

They learned that ordinary citizens get to pay for bank failures but don't get to profit from their successes. Heavy hearted, he bought his son a lemonade hoping that it would cheer him up. But Aristotle was unaware that "Mike's Hard Lemonade" had alcohol in it. A police officer observed the minor being given an alcoholic beverage and immediately called for the boy to be taken into protective custody. Aristotle's son was rushed away to the hospital where the doctors determined that there was no alcohol in his blood. However, the story doesn't end there.

They followed the procedures in their manual and called a social worker to look into this infraction, as the rules for such a situation indicate. The social worker assigned to the case took Aristotle's son to a foster home where he stayed for three days. When Aristotle asked why it was necessary, the social worker replied,

“I am truly sorry, but it's the rules”.

Three days later when the case was heard in court, the judge ruled that the boy could go home, but Aristotle had to move out of his home Aristotle, asked the judge why? The judge replied,

“I am truly sorry, but it's the rules”.

Aristotle, out of the love for his family, sadly complied. As Aristotle, being the deep thinker, pondered the events that transpired, he knew that the,"rules" put in place to ensure child protection were necessary, but did they in fact protect his son? Quite the contrary, he thought. The rules put in place to "protect" his son did the opposite because they were used without practical wisdom. And in that moment he had an epiphany! The Federal Reserve, the "first cause" of his sadness that led to the irreversible act of giving his child spiked lemonade, had rules for everything. Those rules had been applied without practical wisdom as well, even to the degree of subsidizing failure.

There is no doubt that rules and procedures are needed, but sometimes they spare us from thinking. If we want to prevent future failures, we need to embrace the idea that rules, procedures and models don't exclusively solve problems. Empowered, empathetic people solve problems. Practical wisdom is a combination of moral will, moral skill, general kindness, and an intense desire to do the right thing.”

Have a balanced day, and a balanced new year,

From, the BalanceZone Team

What's Your Financial Speed Limit?

2009-12-30T09:50:00.001-06:00

Q: I am a retired police officer. We use BalanceZone. We started with $400,000. $200,000 in Safe Accounts, and $200,000 at risk and set our, "BalanceObjective" at $200,000. We now have $181,000 in safe, and $330,000 at risk. We took out $20,000 to supplement our income and have a current total balance of $511,000. Do you think that we should take some profits and rebalance our scale?

A: We don't give specific advice. Never have. Never will. However, we write about this in the book (page 175 what triggers a rebalance?)

One evening while we were pounding away on the calculator that started all this ,we submerged ourselves in the mathematics of BZI.

We wondered, "What tipped the scale to trigger a rebalance?"

The markets go from equilibrium to dis-equilibrium with no warning. But, no matter how violent, or unpredictable these clashes were, the markets always seemed to roll along at a certain speed.

This, universal and ubiquitous,"Speed" we theorized was, "the Number e" 2.7182882845904523536.
This is better known as compounding interest or the, "Rule of 72". (We go into more detail about this in the book)

In regards to BZI, the number "e" worked like a ethereal speed limit.

As a driver, you rarely drive the exact speed limit. There is an unspoken range that you can safely be over or under and not get pulled over by a policeman. However, there are times when you push the envelope just a little too far and------

Bang!

Strangely traffic, and financial markets have speed limits.

While we can't fully explain this, we began to notice this strange dynamic.

If we let our investments speed past 2.71 times their original value, Mother Market seemed to get angry. If we didn't allow our risk based investments to grow to 2.71 times their original value, just like a slow driver, we didn't get to our destination on time, thereby we failed to generate enough income to keep our monthly life style intact. More than not, we began to notice that some type of action needed to be taken when our gains were between 2-3 times their original values.

So, the decision to rebalance is up to you, and or you and your advisers.

Remember that BZI is not a financial plan. BZI is financial intent.

We have given you the tools and intent so that you can safely drive down all financial highways and successfully navigate all market conditions.

Have a balanced day,

From, the BalanceZone Team

No More BS-- Just BMS

2009-12-28T05:54:00.000-06:00

Financial Speak sounds like BS to many people. For example:

J FKFB INAT OUP SNA SAI RS

This bit of communication is meaningless unless you know the code.

JFK FBI NATO UPS NASA IRS

Suddenly, these letters are meaningful.

The reason is that instead of trying to memorize raw data, you were remembering concepts.

With BalanceZone there is no more BS and raw data to memorize. Just concepts. BMS.

Balance My Scale.

No matter how you set your scale up, you must always ask yourself, one question:

BMS---Does this investment decision help me balance my scale?

That's it.

No more BS:

Have a balanced day,

From, the BalanceZone Team

3 Becomes 2 In 1 year--

2009-12-27T12:40:00.000-06:00

In 2009, things changed.

USA $14.2 trillion
China $4.66
Japan $4.33

In the spirit of keeping things balanced, remember that 30 years ago many economists predicted that Japan would likely pass the USA in GDP.

Have a balanced day,

From, the BalanceZone Team

How To Get Poor Fast--

2009-12-21T07:14:00.001-06:00

Q: I am an aggressive retired investor, and have been advised to hand over all of my investments to a large Wall Street firm. Is this good advice?

A: Overexposure to Wall Street, is a lot like skin damage. It feels good at first, but then one day you wake up and say, "Oh my God!".

Luckily there is a solution.

Instead of handing over 100% of your portfolio to the ultraviolet pie-chart of Wall Street, hand over only a portion.

Divide your portfolio into two parts safe/shade & risk/sun.

We need the sun, and we need Wall Street, we just don't need them 100% of the time.

Click Here to see how much exposure is right for you.

Have a balanced day,

From, the BalanceZone Team

No Plan Survives Contact With The Enemy

2009-12-19T07:56:00.001-06:00

Q: I am a financial planning expert. I use the most sophisticated planning techniques, math and software available. While I am intrigued by some of your comments, and your 0% proofs, I am unclear as to why any financial expert would use the BalanceZone concept. Can you explain this to me?

A: No plan survives contact with the enemy. Ask anyone who has ever been at war.

The reason that you as a financial expert would incorporate BalanceZone into your practice is: Failure to address, and speak frankly about surprise financial attacks is a failure to act in a fiduciary capacity.

Orthodox theory, and sophisticated financial planning tools are important but, for the most part they fail to address surprise attacks. And even if they give the illusion that they do, they fail miserably in providing clear intent.

Orthodox financial plans are detailed and complicated. They are designed to sell trust, and faith. They treat the financial markets as though they were a puzzle, when in reality they are an English murder mystery.

BalanceZone is not a financial puzzle/plan.

BalanceZone is financial intent.

BalanceZone never specifies so much detail that it risks being rendered a pile of ruble under a surprise attack. The BZ intent is to always buy low and sell high.

Even under a surprise enemy attack, almost anyone can balance a scale.

In the absence of clear intent, failure is a predictable outcome.

No plan survives contact with the enemy.

Have a balanced day,

From, the BalanceZone Team

2 Is Easier Than 16

2009-12-17T09:46:00.002-06:00

Q: We'd like to tell our financial adviser about BalanceZone. How would you suggest that we approach her?

A: Tell her 2 is easier than 16. Explain that you've discovered a new tool that you think will help both of you communicate in a more effective manner.

Say,

"The BZI Scale does for investing what the computer mouse did for the personal computer".

Print off some of the BZI material and direct her to the web site and blog.

2 parts on a scale (safe on the left, risk on the right) is much easier to work with than 16 parts buried in a pie-chart.

She's still your trusted financial adviser, but now, when you go in for your annual review, instead of being overwhelmed with a 16 piece pie-chart, you'll be looking at a 2 part scale that everyone understands.

Instead of dealing with this:

Your are dealing with this:

Safe on left, and risk on the right. Everyone knows how to balance a scale.

With the scale, not only will you be communicating in a more effective manner, you'll have a simple strategy in place that will help you always buy low and sell high.

2 is easier than 16.

Have a balanced day,

From, the BalanceZone Team

Who Done It?

2009-12-15T11:13:00.000-06:00

Q: I am not clear on how BalanceZone takes the complexity out of investing? It still seems very complicated to me.

A: BalanceZone Investing doesn't remove the complexity of investing. BalanceZone Investing removes the mystery of investing.

Setting up both sides of the scale can still be complicated.

But, once the scale is setup, mystery solved.

Balance a scale.

The secret to this mystery is------

the only way to balance your scale is to buy low and sell high.

Mystery solved.

Have a balanced day,

From, the BalanceZone Team

GUI + WIMP = BZI

2009-12-13T06:22:00.000-06:00

Q: I don't see anything new with BZI. What's the big deal?

A: GUI + WIMP = BZI

Marrying a GUI (Graphical User Interface) with a WIMP (window, icon, menu, pointing device) is the big deal.

This marriage changed our lives forever.

Software and computing tools (monitors and keyboards) have been around for a long time.

Investment Strategies and investment tools have been around for a long time.

The BZI Strategy is the GUI.

The BZI Scale is the WIMP.

It's the marriage of these two ideas that makes this a big deal.

While we haven't invented any new break through math or cracked the code on investing, we have made a giant leap forward in empowering individual investors by marrying a simple visual investment strategy with a simple, easy to use tool. And that, we feel is ---

A big deal.

Have a balanced day,

From, the BalanceZone Team

Keep More Cash? What About Inflation?

2009-12-10T10:01:00.001-06:00

Q: Inflation? Why should I keep more cash if I think inflation is coming?

A: We were perplexed and frustrated by this question too. That's why we wrote two books on this very question. But, for this post, a picture will do the talking. Look below.

70% of the portfolio (left side) earns 0%

30% of the portfolio (right side) earns various rates of return each year.

Compare the beginning balance to the ending balance, and how much income is taken over the entire time period.

No one in their right mind would accept these terms. But these pictures are worth a thousand words.

Inflation or deflation. Good markets or bad markets.

You can take your inflation adjusted income, and navigate through all market conditions if you learn to keep an eye on your scale balance. We did not back test these scenarios. We used the BalanceZone Scale, and had to deal with the random rates of return that the computer spit out.

Balance Zone Proof Zero Percent

BZ 0 Proof 2

Have a balanced day,

From, the BalanceZone Team

Never Get Sucker Punched By Wall Street Again

2009-12-09T07:06:00.000-06:00

Q: On the home page of the BZI web site you say, "Never get sucker punched by Wall Street again". Can you tell me more about this?

A. Yes. Mr. Market is great at creating new investment products that are designed to empty the wallets of desperate, late saving Boomers. Every time you turn around, Mr. Market shouts at you, "Hey Charlie Brown, want to come kick the new football?

And, of course at the very moment, you decide to take him up on his offer, he pulls the ball away just like Lucy does to Charlie Brown.
Now who is the sucker in this game?

Mr. Market, just like Lucy has always and will always try to pull the ball from you when you least expect it.

So, learn to expect it.

We cannot predict the future, but we can get realistic about who we are dealing with.

We've designed the scale to metaphorically, "Pull the football from you when you least expect it".

By spending some time on the scale, you become wise to the ways of Mr. Market and learn how to navigate through any market conditions or situations so that you hopefully --------

Never get sucker punched by Wall Street again.

Have a balanced day,

From, the BalanceZone Team

Who Wants To Be A Millionaire?

2009-12-08T07:24:00.002-06:00

Q: I am 55 and just retired. I have $500,000 dollars of savings and investments. Now that I have to take income from my investments, I am wondering if I will ever be a millionaire?

A: Maybe. But, if you can balance a scale, your chances should increase. Let us explain.

The BZI Scale works a lot like the famous TV game, "Who wants to be a millionaire", but we've made it easier. With the TV game show, most people do not become a millionaire. With the BalanceZone scale, if you can balance a scale and learn a few rules, you can learn how to become a millionaire.

Click Here ---We'll start you off with $500,000 of play money.

Challenge yourself, and see if you can become a millionaire during retirement.

Have a balanced day,

From, the BalanceZone Team

Sumo

2009-12-04T05:48:00.005-06:00

Q: How did you come up with the idea of weighing investments with a two-part scale?

A: With a two-part scale, imbalances are easy to see. Imbalances, when they are hidden in pie-charts and percentages are not easy to see.

If you can't see the imbalance, or increase in risk in your portfolio, chances are you won't be able to deal with it appropriately.

Weighing investments with a two-part scale (safe on the left, risk on the right) makes it easy to see risk.

See?

Have a balanced day,

From, the BalanceZone Team

Expert Opinions

2009-12-03T11:52:00.001-06:00

Q: Who should I listen to? I've been investing for 30 years and I've never seen more varied opinions.Who would you recommend that I follow?

A: Everyone, and no one.

Let us explain.

Phil Tetlock, the author of, "Experts In Political Judgement"" mathematically proves in his book that experts are right 50% of the time, and that über experts are right 25% of the time. (The book will put you to sleep, but oh my does he make his point.)

Humans are suckers for a great story, and a well thought out prediction. We love it when we are right, and hate it when we are wrong. One of the essential ingredients to making the BalanceZone Scale work is to accept that you, or your advisor(s) will be wrong half of the time.

If your timing or selections are wrong, the scale will tip to the left.

If your timing and selections are right, the scale will tip to the right.

No matter what, by simply re-balancing the scale you will always be buying low and selling high.

The BZI Scale gives you a way to deal with being right and being wrong.

So listen to anyone you like.

Just remember to watch your scale and occasionally bring it back to balance.

Have a balanced day,

From, the BalanceZone Team

Mouse Saves Investor--

2009-12-01T09:29:00.003-06:00

Q: How in the world did you come up with the idea for this simple investment tool?

A: We had a vision. We wanted to change the way investing worked, from specialized theories and complicated terms that only a trained financier could use, to a user-friendly tool (like a hammer, saw or computer mouse) that almost anyone could use.

Roger and Kevin Katzenmaier at ISG Planning created an ingenious investment methodology. We wanted to promote their math. We realized that because of its complexity, their material was for the most part, hidden from the public. We applied the idea of a scale to their math and investment methodology in much the same way that Douglas Engelbart applied the mouse to the computer in 1964.

The mouse, and the scale make complicated tasks simple, user-friendly and enjoyable.

The BalanceZone Scale does for investing what the mouse did for the personal computer.

We fell in love with the Katzenmaier's work, and made it our mission to convey their work in a simplified way.

Have a balanced day,

From, the BalanceZone Team

Taxes & The BZI Strategy--

2009-11-28T08:17:00.000-06:00

Q: I noticed on your web site that you don't account for taxes in your BZI Proofs. Why not?

A. Taxes are different for everyone.

We have users in Australia, Ireland, China, and of course the U.S.A.

Since 2000, in the U.S.A alone, the tax code has been amended 29 times, generating more than 2,000 significant changes.

We can't know all of our users personal tax situations.

We are focused on creating retirement income strategies.
We are focused on reducing annual investment fees.
We are focused on delivering a tool that helps you buy low and sell high.

Our software and tools are designed to work in any country under any tax system.

Predicting tax code is not in our DNA.

Have a balanced day,

From, the BalanceZone Team

Sometimes Dogs & Markets Bite--

2009-11-24T12:39:00.001-06:00

Q: BalanceZone makes investing so simple, I've got to wonder, now that I know how to work the scale, do we still need to pay for a professional advisor?

A: 2/3 of our users maintain, and pay a financial professional. Why? Sometimes dogs and markets bite. Let us explain:

Cesar Millan is the famous, "Dog Whisperer".

He makes taming wild dogs look like magic.

It's not magic.

It's phrasing.

Phrasing is a combination of body posturing and gesturing.

Through his books and TV show, he tells you all of his secrets on phrasing. Armed with all of this free advice, it makes you wonder, why anyone would pay such a high fee for his personal training services?

To this question, Millan says, "Because sometimes dogs bite."

"I expect to get bitten, and when I do, I know how I am going to respond".

Very few people have the desire to learn how to respond appropriately to being bit by a dog/investment.

It feels great to take a bite out of professional fees, but it feels worse to see a bite taken out of your investments. It's your decision, but remember:

Dogs ~ and ~ markets ~ sometimes bite.

And for those of you asking for stock market predictions, we offer you this perspective/joke from a turkey the day before Thanksgiving.

Did you hear about the turkey that became overly enamoured with his Monte Carlo Simulator?

He got gobbled up!

Have a balanced day,

From, the BalanceZone Team

Dutoils dim't mttaer as matdh as we thenk--

2009-11-22T19:29:00.002-06:00

Q: Why don't you make a big deal about ratings, rankings, and past historical performance?

A: Because the details don't matter nearly as much as we tend to think.

Instead of giving you a report to prove our point, consider what we've written below.

It deosn't mttaer in waht oredr the ltteers in a wrod are, the olny iprmoetnt tihng is taht the frist and lsat ltteer be at the rghit pclae. The rset can be a total mses and you can sitll raed it wouthit any porbelm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe.

An English teacher, would tear this apart. But, amazingly the above paragraph successfully conveys its message.

Our point is that the details in the middle don't matter nearly as much as we tend to think.

Our success is contingent on getting a few essential ingredients really right.

For writing, it's getting the first and last letters in a word right.

For investing it's buying low and selling high (even if you selected bad investments).

Mnay of yau alweaby kmaw thas----- tge unly woy to balange the scule is to bay lew and sall hagh.

Perfect investments don't exist, but perfect behavior does.

Have a Balanced Day,

From, The BalanceZone Team

Perspectives--

2009-11-19T05:25:00.000-06:00

Someone asked the other day---

Do you endorse or embrace one particular investment methodology?

No.

We are not that interested in converting people in one way of thinking or investing. Most investment sites are content on converting you.

We are not.

Our intent is to offer to you a variety of perspectives and a simple tool to help you manage and navigate your investing decisions.

We'll keep pouring ideas, strategies and concepts onto the scale, and hold on to the belief that no matter what you put on your scale, you know how to balance a scale.

Keep the questions coming.

Have a Balanced Day,

From, The BalanceZone Team

Taxaphobia--

2009-11-18T07:18:00.000-06:00

Define: Taxaphobia is the fear of selling an investment with a gain because you do not want to pay the taxes.

Taxaphobia has decimated a lot of wealth.

We feel that tax efficient strategies are important.

We feel that taking occasional profits is more important.

A gain is a terrible thing to waste.

Have a Balanced Day,

From, The BalanceZone Team

Books We Like--

2009-11-17T05:16:00.000-06:00

Many of you have asked, what books influenced the BalanceZone concept the most? Below is a list:

The (Mis)behavior of Markets by Benoit Mandelbrot. He explains how we can use fractal geometry to build better financial models, and along the way renders traditional financial theory to a pile of ruble.

The Social Atom by Mark Buchanan. He shows how simplified models can do some amazing things, if they get a few details really right.

Ubiquity by Mark Buchanan. In this book, Mark explains how and why catastrophes happen.

Your Brain & Your Money by Jason Zweig. He explains how we actually think, and behave with our money.

The Science of Leonardo by Fritjof Capra. Capra does a very good job of opening your eyes to Leonardo's world. All of Da Vinci's work has been influential.

Expert Political Judgment: How Good Is It? How Can We Know? by Phil Tetlock. He mathematically maps out why expert predictions are right 50% of the time and uber expert predictions are right 25% of the time. He can easily put you to sleep, but oh my does he make his point.

All of the Malcolm Gladwell books. Tipping Point, Blink, Outliers, and What the Dog Saw.

The Black Swan by Nassim Nicholas Taleb. Taleb is Wall Street's number one dissident. Many of you have asked if the Teeter Totter Principle (our first book) was based on the Black Swan. No. TTP was published in 2006 and the Black Swan came out in 2007. We only wish that we sold as many books as the Black Swan.

As The Future Catches You by Juan Enriquez. He explains how computers, genomics and new technologies are shaping and changing our present and future lives.

There are more books, but this list will get you started.
Have a Balanced Day,

From, The BalanceZone Team

Why Cash Is King & Falling Markets Are Great--

2009-11-15T10:08:00.001-06:00

An inquisitive shopper of the BZI software recently questioned how it is that we could proclaim to keep more cash, take less risk, and get great results.

Look at the pictures above.

From point to point, the charts are flat.

Over the last 37 years, 54% of the time (or 20 of the last 37 years over these two 10 year time periods) you would have done better keeping your money in cash.

As you can see, there are LOTS of opportunities to buy big dips in the middle.

Our point is this:

Cash works 100% of the time.

Keep more cash, take less risk, and buy the dips.

We all know to do this, but now you have a tool and strategy that will help you do it.

Click Here For More Proof--

Have a Balanced Day,

From, The BalanceZone Team

Renting The Stock Market--

2009-11-14T06:14:00.000-06:00

A BZI user said the other day, "There really is no ownership of the stock market. You just rent it and hope to get out before your neighborhood goes south!"

In essence, you loan money to Wall Street, but your profits or losses are only on papper. It's not until you SELL and put the money back into cash that you actually realize a REAL profit.

"I realize that the scale doesn't predict anything. But oh my, does it help me see this reality."

Have a Balanced Day,

From, The BalanceZone Team

Can Options Work With BalanceZone Investing?

2009-11-12T10:22:00.001-06:00

Many of you have asked, can you use options, on the right side of the scale.

Yes.

But be very careful.

Below is how one BZI user uses options and the BZI Statement Tool.

Place 90% on the left side in U.S. Treasuries.

Place 10% on the right side in, "Out of the money PUTS & CALLS".

Select 5 investments (indices, stocks, or ETF's).

Purchase 1 Put contract & 1 Call Contract on each investment.

For example: If you want to use the S&P 500 right now you might buy the December S&P 500 1300 Call and you might buy the December S&P 800 Put.

The S&P is currently trading at 1097. The chances of the S&P hitting either of these levels is statistically remote.

At the end of each week or each day, close out these positions and do it again. If you do this daily, plan on being wrong 346 days a year. If you do it weekly, plan on being wrong 49 out of 52 weeks each year.

But, if or when that freakish, never thought it could happen market turbulence comes, the gains from your, "Out of the money" Puts and or Calls should make up for the 95% of the time that you were wrong.

The key to this strategy is try to lose as little as possible each day or week. And take some investment advice from the famous junk yard man, Fred Sanford, wait for --- "The big one!".

This strategy is also known as the, "Black Swan Strategy" created by the famous hedge fund trader, Nassim Nicholas Taleb.

Taleb's Web Site

The BZI Team does not endorse ANY trading strategy.

The user of this strategy had this bit of wisdom for anyone thinking about implementing this strategy.

"Out of the money options don't kill investors. Investors behaving badly with out of the money options is what destroys wealth."

Be careful ~ And if you use this strategy ~ wait for the big one.

Have a Balanced Day,

From, The BalanceZone Team

Firing Our Way To Prosperity?

2009-11-10T07:16:00.000-06:00

It seems as though the stock market has figured out how to fire their way to prosperity.

Unemployment hit a 27 year high yesterday, and the market scooted up a mere 203 points.

Apparently, this makes the Gods of "Better than Expected" (equity analysts) happy.

While this helps the bottom line in the short term, it exponentially increases the line that you have to stand in at Wal-mart. It seems as though the gears on the stock markets have been melted off. Math, reason, accountability and logic are on vacation.

The BalanceZone Team recommends that you keep an eye on your scale.

This isn't the first time that math, reason, accountability and logic have gone on vacation.

And it won't be the last.

Fire away~ And~ be prepared.

Have a Balanced Day,

From, The BalanceZone Team

$592,000,000,000,000.00, A Russian Pole Vaulter, & An Observation--

2009-11-08T10:07:00.000-06:00

"You can't handle the truth!" This is a famous quote from Jack Nicholson in the movie, "A Few Good Men".

This is what Bernanke and Geithner want to say. But, they won't.

And this is why--- $592,000,000,000,000.00

The BIS (Bank of International Settlements) issued their most recent report on derivative securities today. Click below to see the full report.

BIS Global Derivatives Report

Note, these are, "Notational Values" (see definition here NV Explained ).

It is clear that people around the planet have had it. In the Wall Street Journal today, Tim Geithner and Ben Bernanke were fighting off policy makers who are clamoring to place a, "Risk Tax" on bankers and derivatives in hopes of slowing them down from taking on so much risk.

Unfortunately, for us tax payers, trying to tax/land $592,000,000,000,000.00 all at once would be like taking every airplane on the planet and trying to simultaneously land all of them at the Oklahoma City Air Port.

So what are we as individual investors and citizens to do about this?

Keep pole vaulting????????

The Russian pole vaulter, Sergei Bubka won the world championships three consecutive times. What's amazing about this, despite living in the same town his entire life, is that each time he stood on the podium to receive his gold medal, he had to salute a different flag, and listen to a different national anthem.

A reporter once asked him, "How in the world did you survive through all of the chaos? You survived governments collapsing, currencies collapsing, and 3 wars. How did you do it?"

And in a very thick, but very happy, Russian accent------ He says, "I love to pole vault".

Our point is this:

Main Street will never see any of this money. You can follow PE ratios, 50 day moving averages and watch CNBC all day long. What happens to our financial markets, is unfortunately, out of our control. And what's even more sad, is that no one will get to see this biblical, monetary inferno. It will occur deep inside some hidden server tucked away close to an exchange or two.

The framers of our constitution warned us about the bankers. Unfortunately for us, that was over 200 years ago. People tend to forget. But know this: Nothing has changed since the Pyramids were erected. Create a budget. Keep more cash, take less risk. Pay down debt. Stay diversified in your investments. Keep contributing to your 401k. Turn the TV and You Tube off. Live your life, and learn from Sergei, ---- stay focused on what you love.

So, don't get mad like Jack. Keep pole vaulting.

Have a Balanced Day,

From, The BalanceZone Team