WORLD FOREX: Euro Stalls As EU Summit Looms – Wall Street Journal

Reuters UK

WORLD FOREX: Euro Stalls As EU Summit Looms Wall Street Journal By Siva Sithraputhran Of DOW JONES NEWSWIRES LONDON (Dow Jones)–The euro held above .40 in European foreign exchange trade Monday as the focus switched to an emergency summit of euro-zone leaders scheduled for Thursday, having drifted down in the … FOREX-Euro falls broadly; markets on edge over debt crisisReuters Forex – Focus Back on EU Debt Crisis & Policy Makers ApproachFXstreet.com Forex – Swiss Franc and New Zealand Dollar Stand Out in Early Weekly TradeForexTV.com DailyFX -Best Syndication -Forex Pros all 655 news articles »

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Don't Get Too Worked Up Over Titanium Metals' Earnings

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Titanium Metals (NYSE: TIE  ) , whose recent revenue and earnings are plotted below.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, Titanium Metals burned $96.1 million cash while it booked net income of $114.0 million. That means it burned through all its revenue and more. That doesn't sound so great. FCF is less than net income. Ideally, we'd like to see the opposite.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean! ? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at Titanium Metals look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

With 17.1% of operating cash flow coming from questionable sources, Titanium Metals investors should take a closer look at the underlying numbers. Wit! hin the questionable cash flow figure plotted in the TTM period above, changes in taxes payable provided the biggest boost. Overall, the biggest drag on FCF came from capital expenditures.

A Foolish final thought
Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

• Add Titanium Metals to My Watchlist.

MintFamily with Beth Kobliner: What 5th – 8th Graders Need to Know About Money

One of the best parts of my job is actually talking to kids about money. Of course, I conduct my own research with my personal lab rats: my three kids! But it�s always a treat to speak at schools, where I can connect with children I don�t know and who haven�t been inundated with my money mania. So I was thrilled to speak recently to the middle schoolers at The Children�s Storefront, an independent, tuition-free school for pre-schoolers through eighth graders in Harlem, New York City.

Upon entering the school�a converted brownstone with bright blue painted gates�you immediately sense that it�s an extraordinary place. Academically rigorous and creative, the school takes as one of its guiding principles the importance of inspiring kids to believe that if they work hard, they can go to college and be anything they want to be. The students are especially lucky to have wonderful leaders like Michael Williams, the assistant head of school, who hosted the event. He had such a lovely, patient way of speaking that reinforced the school�s values and showed the students that he respected each of them.

First, Mr. Williams interviewed me, talk-show style, with lots of questions about my childhood and how I chose my career. I felt like I was on Oprah! He asked about my parents, who were also educators and have been married for 60 years. Mr. Williams said, �Wow! Can we get a round of applause for Beth�s parents?� I was �kvelling,� as they say. Very proud!

 

Then came my presentation: The five money lessons every kid from 5^th to 8^th grade should know:

It�s important to wait.

As I mentioned in my last post, the ability to delay gratification leads to fewer behavioral problems, lower stress, stronger friendships, and even higher SAT scores!

Save, save, save!

Waiting is a lot like saving. We all have things we�d like to buy (like the designer jeans I wanted, but couldn�t afford! , as a k id), but it�s important to prioritize saving. After all, if you saved $1 a day starting at age 15, you�d have $80,000 by age 65�that�s a lot of money!

Don�t get into credit card debt�ever!

Say you buy an iPhone for $200. If you purchase it with a credit card that charges you 18% in interest, and you only pay the minimum, you�ll end up paying $225 over nearly a year and a half�$25 in interest! Maybe that doesn�t sound like a whole lot extra, but more is more, and it adds up when there are lots of purchases or more expensive items. It�s just not worth it.

College is one of the best investments you can make.

As the child of two teachers, I always say education is the ticket to your future. And going to college pays off: People who graduate earn nearly *twice* as much as people who don�t, not to mention you have more choices in your life and can follow a passion. But college is expensive, and it�s important to know a school�s price tag before choosing it. Look into financial aid, loans, scholarships, and grants at college.gov, and choose a few schools and play with the �net price calculators� on their websites to get an estimate of how much each will cost.

Follow your dreams� and unexpected opportunities, too.

My career choice surprised me. I was an English major and had no idea I�d end up being a financial journalist. But my first job working for financial journalist Sylvia Porter was life-changing, and I became hooked instantly. Maybe your child�s dream is to be a lawyer or a doctor or a teacher or a writer. Whatever the dream is, encourage your kid to take every opportunity to make it come true. But, if while he or she is working toward that dream, something ELSE comes along that is equally�or even more�appealing, tell your young one not to be afraid to see where that path leads, too.

At the end of my presentation, the kids had tons of questions. One boy bravely asked! , �You s aid to save, but what should you do if you really, really want something?� I�m sure every kid in the room was thinking this! And, let�s face it, we *all* face this debate�especially right now, as the weather warms up and you eye a new spring coat, a brightly colored blouse, or a pretty pair of flats. Priorities, people�we all need to keep those wants in check!

Do you have a child in 5^th to 8^th grade? What have they asked you about money or careers?

Beth Kobliner is a personal finance commentator and journalist, the author of the New York Times bestseller “Get a Financial Life: Personal Finance in Your Twenties and Thirties,” and a member of the President’s Advisory Council on Financial Capability. Visit her at bethkobliner.com, follow her on Twitter, and like her on Facebook.

Andean ETF Introduced by Global X

New York-based Global X Funds introduced the Global X FTSE Andean 40 ETF on Thursday. The ETF provider says it is the first ETF to target this region.

The Andean region, comprised of Chile, Colombia and Peru in the ETF, has been a top-performing stock market region, says Global X. (The ETF does not include the Andean country of Ecuador).  And the new ETF will “allow investors to take advantage of a pending agreement to merge the stock markets of Chile, Colombia and Peru, which will create the second largest stock exchange in Latin America after Brazil’s and 50% larger than Mexico’s,”  the company stated in a press release.

According to Russell Investments, returns in Chile were 51.1%  last year and 48.5% in Colombia.

“We are excited to provide a benchmark and investment vehicle to the combined Chile, Colombia and Peru exchanges,” said Bruno del Ama, CEO of Global X Funds, in a statement. “Because of its geographic size, the Andean region is an important investment opportunity underserved by the current Latin American ETF options.”

The Global X FTSE Andean 40 ETF tracks the FTSE Andean 40 Index, designed to measure the performance of the 40 largest and most liquid companies in the Chilean, Colombian, and Peruvian markets.

As of January 26, 2011 the three-largest components for in the ETF were Southern Copper Corp., Minas Buenaventura, and Pacific Rubiales Energy.

On Friday, the Andean ETF was trading down roughly 1% at $14.75.

The Global X Interbolsa FTSE Colombia 20 ETF (GXG) moved town 1.5% to trade at about $40.30.

The iShares MSCI Chile Index Fund (ECH) declined about 1% to trade near $70, while the iShares MSCI Emerging Markets Index Fund (EEM) was off 0.28% at $46.40.

Earlier this week, EPFR Global said emerging-stock stock fund outflows reached their highest level in three years, hitting more than $7 billion for the week ended Wednesday.

According to Lipper data released Thursday, foreign stock funds, both ETFs and mutual funds, had about $4 billion in outflows for the week.

With over $1 billion in managed assets as of December 31, 2010, GlobalX says it is one of the fastest-growing ETF providers in the world with a focus on global commodities, international and emerging-markets fund suites.

On January 25, 2011, Global X Funds rolled out the Global X Russell Emerging Markets Growth ETF (EMGX) and the Global X Russell Emerging Markets Value ETF (EMVX).  And on January 5, it introduced the Global X Aluminum ETF (ALUM), the first ETF globally focused on aluminum, according to the company.

Fix Your 401(k) - SmartMoney.com

Every day, millions of Americans give their investments the serious attention they deserve, riffling through the business pages, tracking the markets and grappling with tough questions. Do I need more exposure to stocks -- or less? How worried should I be about the euro? Am I going to need to save more to retire on time? But there's a major question often hiding in plain sight, one so fundamental to people's financial health many don't even think to ask it: Is my 401(k) plan any good?

Inside the April Issue

• Fix Your 401(k)
• The Big Business of 401(k) Plans
• 10 Things Campaign Managers Won't Tell You
• 9 to 5 -- at 75
• Real Estate: When High Rents Are a 'Buy' Signal

Certainly, few of us need to ask whether the plans matter: We've resigned ourselves to our dependency when it comes to retirement savings. Americans now hold $4.3 trillion in 401(k)s and similar defined-contribution plans, nearly three times as much as the $1.6 trillion parked in annuities. The plans weren't originally designed to be the nation's primary retirement lifeline -- they started as a minor tax perk for senior executives -- but they've grown inexorably, as ever more big companies have used them as a cheaper alternative to traditional pensions. Only about a third of the corporate wo! rk force can look forward to a monthly pension check today, down from 80 percent three decades ago; over the same period, assets in 401(k)-like plans have grown 16-fold.

And yet, as many economists and money pros know and as more employees are beginning to realize, the plans are riddled with problems capable of tripping up even the most diligent investors. The laundry list of pitfalls includes high (and often hidden) expenses that eat up enormous chunks of plan members' gains, as well as company-provided advice that critics say ranges from vague to nonexistent. Some consumer advocates say that too many employers treat their plans as an afterthought -- and that the financial-services industry, which collects between $30 billion and $60 billion a year in fees from such plans, has little incentive to change things. So it often takes Norma Rae-like activism to get a company to improve its plan lineup -- which means that, for many Americans, picking the components of their 401(k) may be the biggest financial decision they never get to make. "I personally think the 401(k) should be abolished," says Matt Goff, a Houston financial adviser whose practice serves small-business owners needing help with their company retirement plans.

To be sure, some conscientious companies are working to make their plans better; federal regulators are getting involved too, with new rules that may make it easier for investors to see what they're actually paying for their plans. But for most investors, advisers say, it doesn't make sense to wait for the cavalry to come. Here, some of the best advice for cutting costs, finding better funds or even going outside an employer's plan to launch a 401(k) repair project.

The New "Target": Cutting Costs

Are They Worth the Price?

Target-date funds are now the anchor of many investors' 401(k) plans, but critics have faulted some funds for high expenses a! nd so-so performance.

Americans now hold $343 billion in target-date funds, up threefold in six years, and they're buying them mostly through their retirement plans. These funds are the cafeteria lunch of mutual funds: They include all the basic food groups, so investors don't have to order la carte. The funds invest in a mix of stocks, bonds and other investments that gets more conservative as an investor's retirement, or target date, approaches, rebalancing automatically for investors who prefer not to or don't know how to do it themselves. Congress passed a law in 2006 making it easier for employers to use target-date funds as a default 401(k) option, and 81 percent of large employers now offer them.

But for some cost-conscious investors, the expenses built into target-date funds are a growing peeve. Most such products are "funds of funds" that spread assets among multiple other investment vehicles. As a result, target-date-fund expenses span an unusually wide range. Vanguard's target-date products, which rely heavily on index funds, have average expenses of $18 a year per $10,000 invested; at the opposite extreme, Oppenheimer uses actively managed funds and charges $168 per $10,000. And investors at smaller companies are more likely to face fees at the higher end of the range. The differences can add up. According to human resources consultant Towers Watson, an increase of just $50 per $10,000 in target-date-fund fees could cost a high earner the equivalent of eight years' worth of retirement savings over the length of his career.

Target-Date Funds: What to Ask

How did you do in the crash?

Planners say that anyone considering a target-date fund should see how that! fund fa red during the 2008-09 financial crisis. Among target-date funds geared for workers who planned to retire in 2010, the average fund lost 22 percent in 2008, but some lost as much as 40 percent.

Am I the kind of investor you target?

Target-date funds have a lot of assumptions about investor behavior baked into their structure. Many hold plenty of volatile assets, like stocks, even as they pass their retirement target dates, assuming investors won't need to tap the money right away and can take some risks with it. Others are already filled with bonds, assuming that investors will cash out the day they retire. Savers whose needs or plans don't match a fund's assumptions might not find the funds to be a good fit.

Can I get your funds separately -- and cheaper?

Some investors and advisers check a target-date's overall expense ratio, then compare that fund's individual components to similar index funds in the same 401(k) plan. In some cases, employees find they can build a comparable portfolio at a fraction of the cost.

Do you diversify me?

Some investors say it can be worth holding on to a target-date fund if it offers investments that you can't get elsewhere in your 401(k), like commodities or REITs, which can smooth returns in rocky markets.

To be sure, some investors say it's worth paying more for the convenience of the all-in-one funds; what's more, the funds sometimes have access to assets like gold or foreign stocks that employees can't get elsewhere in the plan. Still, some do-it-yourselfers are opting to cook from scratch rather than accept the cafeteria tray. Atlanta adviser Jeffrey Baumert, who helps small-business owners design plans, says he'll sometimes encourage folks whose plans include Fidelity's Freedom funds to try an alternative. Freedom funds' expenses average $74 per $10,000, an! d Baumer t says his clients can do better -- they can get exposure to large-cap stocks, for example, through the inexpensive Fidelity Spartan 500 Index fund. "Do you really think that all their fund managers in every category are going to be the best?" he asks. (Fidelity says its active management is designed to deliver better returns in the long run.)

Some advisers advocate an even simpler rule of thumb: When possible, use only index funds. That's because the typical 401(k) fee structure makes the substantial expense gap between indexes and active funds even wider. "Packagers" -- companies like Fidelity, Vanguard or other middlemen -- collect a substantial share of their 401(k) plan revenues from active funds. Active large-cap stock funds, for example, route an average of $21 per $10,000 invested to cover back-office expenses like accounting and record-keeping, according to human resources consultancy Aon Hewitt (a firm which itself sometimes acts as a packager). The average large-cap index fund, in contrast, routes just $6, and at least half such funds don't charge those fees at all. Ultimately, investors in actively managed funds are subsidizing their coworkers, says Dave Gray, head of retirement plan product development at Charles Schwab; using index funds means getting that subsidy, instead of paying it.

Comparing Plans on Cost

Soon, employers will be required to make more detailed disclosures of their plans' costs. But for more data, experts say, investors will still have to dig into companies' regulatory filings.

Cheap: IBM
(Plan run by Fidelity)

The sheer size of the plan, which has more than 200,000 participants, helps keep costs down, since bigger 401(k) programs usually get heftier discounts on fund expenses. But the plan also emphasizes cheaper index funds, including index options for real estate investing and inflation-protected bo! nds.

Average: Abercrombie & Fitch
(Plan run by Fidelity)

Members of the fashion retailer's plan have access to some index options, but most of the choices are more costly, actively managed funds, including Fidelity's target-date funds. (Fidelity says the active management of those funds gives investors a long-term performance edge.)

Expensive: Take-Two Interactive Software
(Plan run by The Principal Group)

Most funds in the video-game maker's plan are more expensive than average. To use the main stock index fund, employees pay $42 per $10,000 invested, more than twice what an all-but-identical fund costs outside the plan. Principal says the costs are typical for a plan of this size.

Data as of latest federal filings.
Sources: Brightscope; Federal Filings

Expanding Your Choices: The 401(k)-Plus

What's Missing From the Menu

Since the financial crisis, advisers say, 401(k) investors have been more likely to look for alternatives to plain-vanilla stock and bond funds. But surprisingly few plans have adapted to give them what they want.

When the U.S. financial system went haywire in 2008, many Main Street investors started searching for commodities, foreign bonds and other alternative investments that had a chance to stay afloat when U.S. stocks sank. But if they went looking in their 401(k)s, advisers say, chances are they found nothing -- and, more surprising still, even now, many plans haven't adapted. Excluding target-date products, the average plan has just 13 funds, only one more t! han befo re the crash, according to Aon Hewitt. And the very categories they're missing are the ones that employees could be using to hedge against a choppy stock market. Less than half of plans have a bond index fund, for example, and only about one in four includes real estate funds.

A minority of larger 401(k)s give their employees a relatively simple way to get what they're missing, sponsoring a "brokerage window" that lets investors buy funds that aren't in the plan lineup, along with stocks and ETFs in some cases. But for many employees, experts say, it's a costly proposition. Trading commissions tend to be noticeably higher on such transactions than on the same ones made through a discount broker, for example, and investors won't get the "institutional" discount on fund shares. The result is you'll pay more for the investments you want -- "like buying hot dogs at the ballpark," says financial adviser Robert Schmansky, who helps employers choose 401(k) plans.

Beyond Your 401(k): What to Ask

What's my match?

Financial advisers say investors should almost always contribute enough to get their 401(k) plan's full match -- most years, their investments would have to have a great run to make up for the money they would have left on the table.

Can I climb out the window?

About a fifth of large companies have a "brokerage window" that offers access to a bigger range of investments -- though using it means paying fees and commissions. Some advisers recommend minimizing costs by using the window only once a quarter or once a year.

What if I go out on my own?

Investors without a brokerage window can find more investment options by opening an IRA or a Roth IRA. For 2012, the maximum contribution for such plans is $5,000 for those under 50 and $6,! 000 for those 50 and older.

When can I leave?

When workers switch jobs, they can roll their 401(k) plan balance into an IRA. Otherwise, they're stuck, with one noteworthy exception: In many plans, those who turn 591/2 become eligible for an "in-service rollover," even if they stay with their company.

The upshot is that some employees have decided, in a sense, to take the money and run. They contribute just enough to their plans to get a company match, then set up separate retirement accounts that can fill the holes in their 401(k)s. Aircraft giant Boeing has leveraged its huge work force -- its 401(k) has around 200,000 enrollees -- to get low fees in its plan, which includes plenty of low-cost index funds. But the plan lacks funds that focus on holdings that money managers say can help smooth returns in rocky markets, including REITs and Treasury inflation-protected securities. It also lacks specific funds for emerging-market and foreign small-cap stocks. As a result, advisers say, many Boeing employees have built their own shadow 401(k)s. Lowell Lombardini-Parker, a financial planner in Seattle, says he's dealt with dozens of clients from the company, helping them buy low-cost funds targeting those asset classes. His philosophy: "Use what you can. But if you have to, go outside the 401(k)." (Boeing says its own plan includes a "prudent" menu, and that its narrow range of options is designed to not overwhelm unsophisticated investors.)

The double-barrel strategy isn't necessarily the right fit for everyone. Because a matching contribution from an employer is essentially free money, planners say investors should always collect fully on that. And higher-income workers may not be able to make tax-deductible contributions to outside accounts if they also have a 401(k). In that case, Lombardini-Parker says, it may still make sense to put money in a taxable retirement account. Many advisers recommend that investors leave REIT! s and TI PS out of such accounts -- since they tend to throw off taxable income -- and use them instead for equity funds and other stock investments that they plan to hold for a while.

Where the Advice Is... and What It Costs

Advice From Your Company

• Cost: Usually free.
• Pros: Can't beat the price.
• Cons: Only offered by about 60% of firms. Many limit counsel to relatively generic advice.

One-Time, Outside Advice

• Cost: $500 and up for a review of your finances (based on typical fees).
• Pros: Clients can mesh 401(k) advice with counsel on issues like college savings and insurance.
• Cons: It's up to the client to follow the plan; getting follow-up advice often means paying extra.

Full-Time Advice

• Cost: Typically 1% a year, or $5,000 a year for someone with $500,000 in investable assets.
• Pros: Advisers handle some transactions for clients and offer guidance on issues like estate planning
• Cons: Often more expensive than part-time help; some investors with fewer assets feel neglected.

Summoning Reinforcements: Outside Help

On average, 401(k) members fork over $83 per $10,000 invested each year in total fees, according to a recent study by Deloitte Consulting and the Investment Company Institute. For about 60 percent of 401(k) plans, that fee! comes w ith what looks like a corresponding perk -- the opportunity to get investment advice. But according to the Plan Sponsor Council of America, a trade group, only about one in five investors takes advantage of the advice.

Why so little interest? It turns out that the companies' offerings are pretty bare-bones. David Wray, president of the plan council, says the threat of lawsuits means large companies need to make sure that, say, a 60-year-old in Dallas and a 60-year-old in Boston get relatively consistent recommendations, which means the advice is less likely to be personalized. Employers also almost always avoid offering advice about any assets that aren't in the 401(k), like a home or a spouse's savings. The result: "Plan-provided advice tends to be generic," says Wray.

The problem, of course, is that anything that isn't generic can get expensive. Financial advisers can spend hours poring over every investment choice. But their fees often start at 1 percent of an investor's assets, which would effectively double what the typical 401(k) shareholder is already spending on her portfolio. One Goldilocks option: Some financial planners will take on smaller advice projects, counseling investors on a one-time basis for an hourly fee. Brian Terry, a Charlotte, N.C.-based adviser, has seen dozens of 401(k) clients. He gives his clients a rundown of their plan, taking a few hours to help them pick investments; many, but not all, return once a year for a follow-up. His price: $150 an hour. The Garrett Planning Network is one network of hourly-fee planners; others can be found through the National Association of Personal Financial Advisers.

Financial planners have their own idiosyncrasies and agendas, though, and some critics complain that they can drive people into cookie-cutter strategies of their own. Consumer! advocat es say investors should check whether advisers get compensated for recommending any particular investments (a common arrangement among both independent operators and employees of big-name brokerages). When it's time to talk 401(k), advisers say, preparation counts: Think carefully about when you want to retire and how much money you hope to spend, says Lea Ann Knight, a planner from Bedford, Mass., who meets with many clients for similar consultations. And don't be shy about secret ambitions -- like that condo in Maui. Devote your face time with the planner to these goals; let him parse the fine print on investment prospectuses.

And investors who decide that with or without help, their 401(k) just won't cut it can always approach the boss. Retirement consultants say that many employers, no less befuddled by the system, are often happy to hear what employees want. Of course, some may have better luck asking employers to add a single option like a mutual fund than to switch providers entirely. One place to start: Grassroots investing website Bogleheads.org has a form letter employees can download for free.

Getting Help: What to Ask

Should I take my employer's advice?

Pros say advice from planners hired by the employer can offer investors a quick read on how much to save or whether to buy more stocks or bonds. But when it comes to picking specific investments, they add, getting a second opinion or reviewing independent research is often worthwhile.

What's online?

Morningstar is an invaluable resource for researching mutual funds. At not-for-profit website Bogleheads .org, anyone brave enough to (anonymously) post the details of their financial life can get advice from opinionated volunteers. Of course, with free and anonymous advice, "it's buyer beware," says securities lawyer Edward Rosenblatt.

Can I find out how my plan stacks up?

BrightScope, a financial research firm, has a website that offers ratings of 401(k) plans: The sections on "total plan cost" and "investment-menu quality" offer a sense of how a plan's fund lineup stacks up against others in its industry.

What kind of adviser do I want?

For those whose main financial concern is their 401(k) plan, a one-time meeting with a planner can be cost-effective; for investors with more complex needs, like an inheritance or college education to finance, bringing on someone full-time for an annual or asset-based fee might be warranted.

Photo-illustrations by Stephen Webster for SmartMoney

It's a Bad Time to Be Bearish on Sirius XM

The way some analysts take chances you'd think that Johnny Knoxville was egging them on from the other side of the camera.

Barclays Capital analyst James Ratcliffe is the latest Wall Street daredevil.

Ratcliffe initiated coverage of Sirius XM Radio (Nasdaq: SIRI  ) yesterday with an underweight rating. His near-term price target of $2 -- at a time when other analysts are perched as high as $3 -- is bold. The stock closed yesterday at $2.12.

It's an interesting time to begin covering a company and pointing down. Sirius XM reports its fourth-quarter results tomorrow. Ratcliffe is either going to be crowned a genius or laughed off as a buffoon. There's no in between here.

Cracking open Pandora's box
Ratcliffe is smart enough not to pin his bearish thesis on the runaway success of Pandora (NYSE: P  ) and the crowding automobile dashboard.

Sirius XM has proven that there is plenty of growth for several companies to share.

The satellite radio giant shed 231,098 net subscribers in 2009, only to add 1.4 million accounts in 2010 and another 1.7 million in 2011. Every single year finds more people owning smartphones and buying cars through which they can stream smartphone apps. Pandora's growth in that time has been downright explosive.

Well, if all of this is true, then why is Sirius XM not only growing, but actually accelerating its subscriber rate?

Thankfully Ratcliffe isn't going there, rightfully pointing out that the fast-growing music-discovery service is a "real, but manageable" threat. If anything, Ratcliffe argues -- as many bulls have in the past -- wireless carriers moving to tiered pricing will make Pandora and other "free" streaming content more expensive than consumers think.

Playing the valuation card
Ratcliffe is more logical than passionate about his gutsy coverage initiation. He simply fe! els that Sirius XM is overvalued. The stock's already trading at 14 times his estimated EBITDA target for 2013 and 19 times next year's free cash flow if it was fully taxed.

Instead of Sirius XM, he suggests Liberty Media (Nasdaq: LMCA  ) , which owns a 40% preferred share stake in Sirius XM but is trading at a discount.

I don't have any beef with that final point. I bought into Liberty Media last year for exactly that reason.

Ratcliffe's bearish case is solid, but the problem is that it lacks imagination.

After all, Ratcliffe assumes the revenue growth rate from 2011 through 2018 will run at an annualized rate of a mere 8.6%. He does see EBITDA and free cash flow moving substantially higher -- and rightfully so given the scalable nature of the business -- but does he really think the combination of subscriber growth and increases in average revenue per subscriber will only appreciate at a pace in the single digits?

That's a bold assumption, and one that may get crushed tomorrow.

Guidance light
It's been five months since Sirius XM initiated its outlook for 2012, and it would be a shock if CEO Mel Karmazin sticks to his target of 10% revenue growth for the year ahead. Sirius XM wound up tacking on far more new subscribers during the fourth quarter -- roughly 540,000 to get to 21.9 million subscribers -- to keep aiming that low. There was a 12% rate hike introduced last month. Auto sales have been strong.

Save for a brief lapse in late 2008, Sirius XM has erred on the side of providing conservative guidance that it can bump up later.

If Karmazin doesn't boost his guidance for 2012, the market won't be happy -- and Ratcliffe will be rewarded for his brazen call practically on the eve before Sirius XM's conference call. If the outlook is raised and the stock rallies, he'll look like a chump for the timing of his call.

Through his goggles I can see where Sirius XM and its roughly 6.5 bill! ion full y diluted shares may seem overvalued. Pit Sirius XM against the two largest satellite-based entertainment companies -- DIRECTV (Nasdaq: DTV  ) and DISH Network (Nasdaq: DISH  ) -- and Sirius XM trades at insane relative multiples of revenue and forward earnings.

However, DIRECTV and DISH aren't in the same position as Sirius XM. Sure, folks will always pay more for TV than radio. However, DIRECTV and DISH are at the mercy of their content providers. Sirius XM, for the most part, is its own content provider. Its programming and content costs have actually gone down over the past year, and that's something you will never see happen at DIRECTV or DISH unless they're shedding subscribers.

Sirius XM doesn't have insane pricing elasticity given the limited market of people who spend enough time in their cars to make the service worthwhile, but this is still a monopoly on premium radio in an era where terrestrial radio isn't getting any better and tiered pricing along with throttling will eat into fans of smartphone streaming.

We'll see if Ratcliffe is right tomorrow, but it certainly seems as if he picked the wrong week to come out as a Sirius XM bear.

Still a bull
I remain bullish on Sirius XM's future. It should come as no surprise that I'm promoting the CAPScall initiative for accountability by reiterating my bullish call on Sirius XM for Motley Fool CAPS.

XM Satellite Radio was a Rule Breakers recommendation before the Sirius XM merger. It's gone from the scorecard, but if you want to discover the newsletter service's next rule-breaking multibagger, a free report reveals all.

Wall Street Like A Rolling Stone

So how does it feel? To be on your own? With no direction home?

Like a rolling stone?

Wall Street figures to cap off what has been nearly three weeks of a surprisingly determined and constructive move higher with?exactly the kind of taciturn – bordering on milquetoast – trading session that the skeptics expected to see this month.

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Futures have flattened out, picking up the mantle from Thursday’s indifferent trading session, when the Dow Jones Industrial Average (DJI)?flattened out with an eight-point loss on the close.

This lethargy, though,?qualified as uncharacteristic. While most market watchers expected September to represent a big challenge – both because the month historically has been?Wall Street’s most disappointing, and because stocks entered the month with valuations so stretched – the action has been surprisingly determined and constructive. Thursday’s skimpy setback proved just the second session in the last 10 to show a loss for the Dow. Though gains for the market averages have been?catwalk-model skinny?for most of those advancing sessions, the bulls clearly maintained their advantage, and haven’t really let the bears break service at any point in the month.

Friday’s session figured to be identified more for what it?it’s missing than for what it offers. There isn’t much in the way of data, robbing the market of what has been the single greatest contributor to its constructive tone. Most economic readings lately have incited?traders to revive the recovery trade. They won’t have those catalysts in a data-free session Friday.

What there?will be is the hint of the kind of volatility that has been notably absent recently. The CBOE Volatility reading – the VIX – slipped to its lows for the ye! ar earli er this week at just below 23,?though there has been a?steady pickup in volume as the month has ambled on.

There could be a jolt more of both volume and volatility in Friday’s session?amid the unwinding of options positions in this?quarterly expiration of derivatives. The last two months, the options windup has contributed?a bullish tone to the market, but there’s a risk the opposite could be the case Friday.

Most of the other capital markets?have taken a jug-handle turn in Friday’s session.?The dollar, which retreated to the lows for the year earlier this week, has bounced fof?its bottom. Treasuries, which rose in price Thursday, have flattened out Friday, though the two-year note continued to?offer a yield south of one percent. Crude has flattened at about $72 a barrel. Even gold has been tamed, though the pricing environment stayed above $1000 an ounce.

Best Wall St. Stocks Today: AIG,GM,TESO,AAPL

AIG (NYSE: AIG) continues to try to pay back the $182 billion bailout that it received from the federal government, which means from�the taxpayers. It announced another stage in the process. It will sell a piece of its large Asia operation — AIA — for about $6 billion. The U.S. government owns 44% of AIG and wants to continue to chop down that stake. The trouble with the effort to recoup the money is similar to attempts with General Motors (NYSE: GM), Chrysler, Fannie Mae and Freddie Mac. The money that was invested�will never be paid back entirely. That leaves the government, and taxpayers, to answer the question of whether the bailouts were worth it.

China�s Budget

China has made two announcements about its budget. One was that it has revised its growth forecast to 7.5% for 2012. For an economy�that has grown at a rate of 10% over the past decade, the lower level is practically a recession. China says it will try to hedge its challenge with exports due to a slow global economy with a drive to increase consumption within its own borders. That�decision may not make sense. China�s consumer activity relies on factory employment, which relies on exports. China also said it would increase its defense budget by 10.5%. The total is only about a quarter of the U.S.�s, but the People�s Republic believes it has to make the investment. To some extent that is because of America�s military presence in Japan, South Korea and Taiwan. Of course, one advantage to the spending is that it will create jobs. Perhaps that will help China�s other goal of increase consumer spending.

Tesco to Add Jobs

Tesco (NASDAQ: TESO), the largest retailer in the UK, will add 20,000 jobs. It already employs 270,000 people in the country. The government lauded the investment by Tesco�as the kind of decision that will help get the�UK economy on track. Britain is close to another recession. Some economists argue that its austerity programs have gone too far, triggering th! e layoff s of tens of thousands of government workers. Tesco�s action cannot entirely offset those jobs cuts, but the decision is a sign that private enterprise in the UK is not altogether crippled.

Apple in the News

It is impossible to keep Apple (NASDAQ: AAPL) out of the headlines. The company announced its App Store had reached�its 25 billionth download. Just behind that news are reports that the Apple iPad 3, which is supposed�to be launched in the next few days, will cost the same as the iPad 2. The decision could cause more than the normal surge in interest that most new Apple products get. The new iPad is the first of any Apple devices to run on superfast 4G wireless networks. These networks have been the most widely promoted service of the big wireless companies in the U.S. Apple, in essence, will enter an entirely new market with a new product. And the iPad 3 likely will be followed soon by a 4G-enabled iPhone 5. It is another entirely new cycle to boost Apple�s already staggering sales increases.

Douglas A. McIntyre

BP up after settlement; energy stocks dip

NEW YORK (MarketWatch) � Energy stocks fell with the broader equities market Monday, as BP PLC�s settlement with plaintiffs in the 2010 Macondo oil spill failed to provide much of a lift for the sector.

Helping drag on energy stocks, the Dow Jones Industrial Average DJIA �dropped 15 points, as Exxon Mobil Corp. XOM �rose 0.8% and fellow blue-chip component Chevron Corp. CVX �ended the session with a drop of 0.3%.

Click to Play

BP strikes Gulf of Mexico settlement

The oil major has reached a $7.8 billion settlement with residents and businesses over the 2010 oil spill. But BP still has a bigger battle to face with the U.S. government. (Photo: AP.)

Among sector benchmarks, the Philadelphia Oil Service Index OSX �moved down by 1.6%, with components Weatherford International Ltd. WFT and Nabors Industries Ltd. NBR �off by more than 4% each.

The NYSE Arca Natural Gas Index XX:XNG �ended about flat and the NYSE Arca Oil Index XX:XOI �dipped 0.2%.

Energy stocks in the S&P 500 index SPX �dropped 1%, on average, with First Solar Inc. FSLR �down about 7%, Alpha Natural Resources Inc. ANR �falling 6% and Peabody Energy Corp. BTU �down by 4%. On the up side, WPX Energy Inc. WPX �rose 2.8%.

BP clears legal hurdle, shares rise

U.S.-listed shares of BP BP �UK:BP �rose 1% after the oil major reached a $7.8 billion settlement with plaintiffs in a suit over the 2010 Macondo oil spill in the Gulf of Mexico. See story on BP�s latest oil spill settlement.

But BP could still be on the hook for up to $40 billion more in legal action from the federal government and other parties, according to reports.

�We remain cautious on BP while there are still significant issues around the cost of the spill to be resolved,� analysts at Bernstein Research said in a note to clients on Monday. �We also see limited organic growth and will want to see more signs of exploration success before becoming more positive.�

Raymond James analyst Pavel Molchanev said the settlement, �removes a considerable portion of BP�s legal overhang, though by no means all of it! .�

BP management believes that the company has already declared enough dollar loss provisions on the spill to handle upcoming legal costs, Molchanev said.

Among other stocks in Monday�s spotlight, El Paso Corp. EP �said it�s adjourning until Friday a shareholder vote on its merger with Kinder Morgan Inc. KMI �. The company said it�s allowing additional time for stockholders to consider a Feb. 29 Delaware Chancery Court opinion over the merger.

While the judge in the case didn�t block the deal, some El Paso shareholders argued that the merger contained conflicts of interest involving Goldman Sachs Group GS �and El Paso CEO Douglas Forshee.

The judge�s opinion focused on Goldman�s private equity arm owning 19% of Kinder Morgan while other parts of the firm served as a banker for El Paso; also Forshee had private interest in buying some of El Paso�s exploration unit from Kinder Morgan after the merger was completed.

Also in the energy spotlight, Exco Resources Inc. XCO �named Wilbur Ross to its board of directors. Ross, who runs private equity firm WL Ross & Co. LLC, owned about 13.7% of Exco Resources common stock, worth about $200 million. Shares of Exco fell 5%.

Cetera Financial to Acquire Genworth FIS Broker-Dealer

Cetera Financial Group announced Monday that it would acquire the independent broker-dealer Genworth Financial Investment Services Inc. (GFIS), from Genworth Financial. The proposed acquisition is scheduled to close in approximately 90 days, pending regulatory approvals.

In an interview on Monday with AdvisorOne, Cetera CEO Valerie Brown (left) and Genworth FIS President and CEO Enrique Vasquez declined to disclose the financial details of the acquisition, but Brown said that “this is a straightforward transaction; GFIS is a solid, high-quality business.” 

However, in a statement released yesterday on its web site, Genworth revealed that it sold GFIS to Cetera for $78.5 million, plus an earnout provision that could provide Genworth with "additional future compensation based on achieving certain revenue goals over a one-year period." Proceeds from the transaction, Genworth said, will be used for general corporate purposes, and said the sale will allow it focus on its core turnkey asset management businesses within Genworth Financial Wealth Management (GFWM).

GFIS, whose reps tend to be tax and accounting professionals who also provide investment advice to clients, will become the fourth broker-dealer for Cetera, the former ING Advisors IBD network that was acquired in February 2010 by Lightyear, a private equity firm headed by former Paine Webber and UBS America executive Donald Marron.

The other BDs in the Cetera network are Financial Network Investment Corp., which  has about 1,800, mostly smaller reps; Multi-Financial Securities Corp., which has 1,000 reps; and PrimeVest Financial Services, a self-clearing BD that focuses on serving more than 600 financial institutions. 

In the interview, Brown pointed out that Cetera was acquiring both the GFIS broker-dealer and its RIA, and that the acquisition benefited Cetera and GFIS in terms of scale. Saying Cetera was well capitalized, and noting that they shared the same clearing firm, Pershing, she said, “We wanted a partner that allows us to cement our commitment to serve the multiple faces of independence. Tax and accounting professionals are extremely well positioned” in this challenging marketplace, boasting both deep knowledge of financial services and the trust of their clients. She noted as well that Cetera and GFIS share a commitment to the fee-based side of the BD business. 

Vasquez echoed that commitment, saying that GFIS’ 1,800 reps had $13 billion in assets, of which $4 billion was on its fee-based platform. He praised Brown for her knowledge and leadership, and said the partnership “will provide us with the scale to grow and continue to grow” particularly in the large but “fragmented” tax and accounting market.

“Our advisors are not your typical salespeople,” he said. From a platform perspective, he continued, “as we look to grow with more sophisticated advisors, the platform will help.”  The company will continue to be based in Schaumburg, Ill., and will continue, said Vasquez, “to maintain a strong relationship with Genworth Financial Wealth Management and offer their competitive suite of insurance and wealth management products.” Genworth is already a major supplier to Cetera’s existing BDs for those same products.

In an interview with AdvisorOne almost a year ago, Brown suggested that there would be further consolidation in the independent BD space, due to rising costs from compliance and technology investments and shrinking margins.

Brown said that Cetera was “committed to the continued success” of its existing broker-dealers’ reps, and noted that “many of our leaders are very much involved in the industry, with FSI, SIFMA and IRI,” which was one reason why Cetera recently announced it would subsidize all 3,500 of its reps’ membership in FSI.