Last Week's Wild Ride, in Context

No doubt that last week took the wind out of more than a few sails as the broader market took quite a beating. A quick peak at my Covestor standings (as of today) suggests I fared even worse than the overall market. Indeed, a similar trend over the same time period (roughly the past month) can be seen in the performance graph (my performance is the darker of the two lines) taken directly from my FolioFN account:

Of course, such is the nature of short-term performance measures. I waited a year to start this blog in part to be sure that I had at least that much performance data to share. Even a single year is on the low end of my comfort zone for judging portfolio performance.

Viewed in the context of the past 12 months worth of performance data, you can see that while my positions did fall pretty far, pretty fast last week, they did so from quite a bit higher of a starting point than the broader market:

Covestor appears to be gearing up to display member rankings, but with only a few months worth of data (and significantly less than that for a lot of their newer members), I hope they delay the launch of that feature until they have a critical mass of reasonably useful data. If not, those rankings may well be as volatile as last week's wild ride.

Taking the Plunge: Is a Joint Checking Account Right for Both of You?

According to the server logs, 10% of the search queries used to get to this blog have to do with joint checking accounts, including queries like "married add to checking account" and "dual savings checking account". Clearly a topic of interest.

So assuming you're married, soon-to-be-married, or living with a partner in a long-term relationship, should you take the plunge and set up a joint checking account? Or should you keep separate accounts? In a word: Yes.

Of course, everyone's situation is unique, so you may want to adjust accordingly, but here's what's worked for us:

• Open a joint checking account under both your names, and get a debit card for each of you
• Keep or open a separate, individual checking account for each of you. If you're married, be sure to work with your bank to set up the accounts so that if one partner dies, the account goes to the other partner.
• Classify your monthly bills, identifying all the ones that are truly joint expenses like rent, cable, insurance, groceries, etc. (including any joint savings you might be doing for something like a down payment) I'll call these household expenses.
  
• Decide what percentage of the total household expenses each of you should contribute. This should be weighted according to your relative income: if you both make about the same salary, then just split it 50/50; if one partner earns $60,000 and the other $40,000, then the higher-earning partner should be picking up 60% of the household expenses.
• Have your household contribution direct-deposited into the joint account, and the rest deposited into your personal account (if your workplace won't split deposits, you may need to set up an automated transfer through your bank; another option is to open all of these accounts through ING Direct, which offers great rates and easy online access, including automatic transfers).
• Pick one partner to manage the joint account. The other partner has the obligation to share timely information about any purchases they make (designate a drop-box for receipts). But what if having two cards causes an overdraft? Simple -- you do have that $1,000 padding, right? Since my wife and I did that, we haven't had a single overdraft, despite the occasional crossing of wires.
• Finally (and perhaps most importantly), since the shared expenses are taken care of, what's left in your individual account is, well, yours. That means you can spend that as you'd like without consulting your partner, no matter how silly they think your purchase might be (no way I could have justified my $100 pocket notepad, but I love that thing and use it almost every day).

Though having multiple accounts does add some administrative overhead, the benefit is that you avoid a lot of potential friction caused by -- how shall I say this -- differences of opinion on appropriate spending.

Comments welcome on what joint-account setup works for you.

This Round's Pick: HLYS

As you know, in keeping with the LBTBTM strategy, roughly every two weeks I pick up another stock, with the intention of holding for approximately a year. This time around, it's Heely's, Inc., which makes those shoes for kids with the wheels in the heels.

In addition to some impressive financials, I like how clearly they've defined their target market:

Heelys, Inc. engages in the design, marketing, and distribution of action sports-inspired products for 14 year-old boys and girls.

Their market cap is about $600M, and the MFI screener calculates their pre-tax earnings yield at 10%, and their pre-tax return on capital at over 100%.

My current holdings are posted here, You can also track my holdings through Covestor.

This week I also sold my holdings in Renaissance Learning Inc., up 18% in just over a year.


P.S. -- Don't forget the fine print.

This Round's Pick: UEPS

As you know, in keeping with the LBTBTM strategy, roughly every two weeks I pick up another stock, with the intention of holding for approximately a year. This time around, it's Net 1 Ueps Technologies Inc., which makes smart-card technologies.

Their market cap is about $1.2B, and the MFI screener calculates their pre-tax earnings yield at 8%, and their pre-tax return on capital at over 100%.

My current holdings are posted here, You can also track my holdings through Covestor.


P.S. -- Don't forget the fine print.