The Loews Santa Monica Beach Hotel

California Dreaming: Striking Gold in the World’s 8th Largest Economy.

by Natalie Pace.

The market victory of the Nasdaq, which crushed the returns of the S&P500 and Dow Jones Industrial Average in 2007, is largely a tale of one state – the golden state of California.

General Stock Market Performance

Broadband connected households to the Internet, and shoppers shifted into cyber consumers, buying everything from music on Apple iTunes (a California based company), to business listings from Google (another California based company) to long distance from Skype, an eBay company, which is also California based. As a result, many California companies are sitting pretty with no or low debt and a war chest of capital, compared to many of the Dow Jones Industrial component companies that are strapped with debt. As we enter a period of increasing borrowing costs and subsequently lower merger and acquisition activity, cash is king and those companies that are positioned well have a strong advantage in the global marketplace.

NASDAQ vs. the Dow Jones Industrial Average

(Nasdaq companies are highlighted in blue. Dow companies are listed in red.)

Caterpillar, one of the 30 Dow Jones Industrial Components, has less than a billion in cash on hand, with almost $5 billion in debt due within one year and $17 billion due in the coming years. Caterpillar’s liability for postemployment benefits (health care and pension plans) rang up to almost $6 billion. That equals a stunning $28 billion in debt in a company that makes machinery for the construction business. With new construction screeching to a halt in the U.S., this is the kind of portfolio pruning that investors need to attend to.

So, as we enter 2008, a year where GDP growth is expected to slow, it could pay to continue to trim back on your legacy DOW holdings and weight toward the new Blue Chip companies. As one of our favorite money managers, Paul Woods, the CEO of Odyssey Advisors, says, "Companies with the smallest market capitalizations produce the highest returns. As companies get bigger, returns go down until you get to the blue chips, which produce the lowest returns of all."

Of course, the larger companies are also the ones that withstand market downturns, providing stability to your nest egg. However, the tides have shifted from companies that have been around at the turn of the century to those that are redefining the world we live in. The Blue Chips of the past are not the stabilizing force that they used to be, when you consider the amount of money that has been lost in companies like General Motors, which reported another net loss of $39 billion in the 3^rd quarter of 2007, on November 7, 2007.

So, this month, rather than looking for a new hot company to invest in, why not take your nest egg into the examining room for a check up? While anchoring your portfolio with the hefty Googles and Apples of the world could be more beneficial than relying on Caterpillar and General Motors for stability, both Apple and Google are trading for a high price to earnings ratio and at an all-time high stock price. If you don’t already own these companies, consider that a sinking tide in the stock market might ground even the speedboats like Apple and Google, meaning you could find a better opportunity for buying later in 2008. It might pay to have a stock shopping list on hand, rather than be too eager to buy in now.

Did you know that corporations like Google and Apple have made California the eighth largest economy in the world? California has become its own country by economic standards. Investors are a large part of that change. The California "Governator" Arnold Schwarzenegger trades with the world’s most powerful leaders, but it was everyday investors who demanded to own a piece of Google, making it one of the largest corporations in the world, with a market value of $219 billion. (Exxon Mobil is the world’s largest corporation, with a market capitalization of $513 billion.)

The World’s Largest Economies (by GDP, 2006)
Source: Milken Institute

United States ($13.24 trillion)
Japan ($4.37 trillion)
Germany ($290 trillion)
China ($2.63 trillion)
United Kingdom ($2.37 trillion)
France ($2.23 trillion)
Italy ($1.85 trillion)
California ($1.73 trillion)

Google became a $224 billion company because it was simply the best search engine, with an easy platform for businesses to advertise on. People love it, and they wanted to own it. At the same time, Altria (Wall Street’s name for Philip Morris) has remained a $164 billion dollar company simply by being one of the top holdings in the most popular mutual funds. Many investors own Philip Morris (stock symbol MO) without even knowing it. Ever wonder how Exxon Mobil became worth half a trillion dollars? With your retirement money (those mutual funds that you buy without knowing what you own). Imagine how fast our world would change if you took your money out of oil, war and cigarettes (death) and invested in clean technology and renewable energy. And by the way, you will be making MORE money when you do that. Clean energy was the top performing industry on Wall Street in the 1st and the 3rd quarters of 2007 — above energy! Our 2007 Company of the Year Suntech Power Holdings (symbol: STP), a solar energy corporation based out of China, more than doubled in share price.

With the entire world, led by Europe, signing on to alternative energy and reducing the carbon footprint, clean energy is the wave of tomorrow. You can be someone who paves the path, reaps the rewards AND changes the world — a win*win*win situation.

So, when beautifying your bottom line for a fiscally fit New Year, be sure to peek into the companies that you hold within your mutual funds. It’s as easy as two clicks on your computer. Simply:

HOW TO SEE WHAT COMPANIES YOU OWN

1. Go to NataliePace.com
2. Enter the 5-letter symbol of the mutual fund in the Company Research box (located near the bottom of the middle column)
3. This will take you to a stock information page
4. Click on Top Holdings
5. This year, getting smart about your investments could be a new lease on life – for your bottom line and for our world!

It’s not too late to come to the January 2008 retreat in Santa Monica California, where you will learn how to rebalance your portfolio and options for investing in corporations that are making money by making our world a better place. Escape the snow! Play the Billionaire game, meet money managers and consultants who have handled billions of dollars in deals and investments and learn how to protect and grow your nest egg – all in a sunny, beachfront setting in Santa Monica, California! Set up the year and your future right! For more information, go to NataliePace.com. Click on the Get Rich and Enrich banner ad.

Please note: NataliePace.com does not act or operate like a broker. We are a publishing, media and information center. This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. The publicly traded companies mentioned in this article are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.

IMPORTANT DISCLAIMER: Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

Beyond Kyoto: Convincing Capitalists to Buy Clean Air.

by Natalie Pace, CEO, NataliePace.com

Q&A with Dr. Richard Sandor, the Chairman and founder of the Chicago Climate Exchange.

A reprint from NataliePace.com, vol. 1, issue 50.

The Kyoto Protocol didn’t fail. It became a spark plug for a market place solution that has been alive and growing since 2000. The Chicago Climate Exchange (CCX), which launched in 2000 with a grant from the Joyce Foundation, is North America's only and the world's first global marketplace for integrating voluntary legally binding emissions reductions with emissions trading and offsets for all six greenhouse gases. Time magazine has called Dr. Richard L. Sandor, the founder, Chairman and CEO of CCX, a Hero of the Planet and the "father of carbon trading." Dr. Sandor is an economist and financial innovator who has convinced hundreds of corporations and cities around the world to voluntarily reduce pollution and to promote a clean, healthy atmosphere through "offsetting" behavior, such as reforesting Brazilian rain forest.

CCX emitting Members make a voluntary but legally binding commitment to meet annual greenhouse gas emission reduction targets. Those who reduce below the targets have surplus allowances to sell or bank; those who emit above the targets comply by purchasing CCX Carbon Financial Instrument® (CFI™) contracts. Current member corporations include: Amtrak, Ford Motor Company, Knoll, Rolls-Royce, Dow Corning, Dupont, Motorola, Sony, Bank of America, Bayer, the cities of Aspen, Berkeley, Boulder, Chicago, Oakland, Melbourne, Australia and Portland and almost a hundred other corporations. Click for a complete listing of members.

Goals of CCX:

• To facilitate the transaction of greenhouse gas allowance trading with price transparency, design excellence and environmental integrity
• To build the skills and institutions needed to cost-effectively manage greenhouse gas
• To facilitate capacity-building in both public and private sectors to facilitate greenhouse gas mitigation
• To strengthen the intellectual framework required for cost effective and valid greenhouse gas reduction
• To help inform the public debate on managing the risk of global climate change

I first spoke with Dr. Richard Sandor about his nascent project in 2002 before all of his acclaim, before the world took global warming seriously and before Al Gore became the winner of the Nobel Peace Prize. Certainly, if you haven’t already heard of the Chicago Climate Exchange and Dr. Sandor yet, you will. See below for Dr. Sandor’s description of what the Exchange can and should do now and going forward.

This is a reprint from NataliePace.com, vol. 1, issue 50.

From left to right: Dr. Richard L. Sandor, Chairman and CEO of CCX; Bill Clinton, 42nd President of the United States; Andrew B. Cogan, Knoll CEO; and Lou Newett, Knoll Environmental, Health and Safety Manager at the GreenBuild Conference in Chicago, Illinois on Nov. 7, 2007. Greenbuild is the world's largest conference on green building. Knoll has committed to sustainable design in their line of modern furniture that "inspires, evolves and endures." Photo © Knoll.

Natalie Pace – Citizens around the world have seen startling photos of deforestation and melting ice sheets, yet so many of us continue with old habits. What does it take to convince consumers and companies to give up a little comfort now for the sake of our children?

Sandor-- What kind, if any, discomfort results from lower greenhouse gas emissions? Is it possible to have a net gain? We are in the business of trying to develop financial institutions and infrastructure to deal with pricing carbon. The debate can’t be brought to an adequate conclusion until we know what the price of carbon is. We’re here to inform the debate more than anything else. Rather than, basically, hypothesize or build models, we really need to be Orville or Wilbur Wright. We need this thing to fly for 56 seconds to prove that you can use the price system to effectively allocate air, water, etc. That’s the part of the debate that we’re participating in.

Are the technology and development needed to reduce emissions prohibitively expensive for companies? How do you tempt corporations, which have just now returned to capital spending, to sign on? Are corporations signing on because they believe in the cause or because they want to be on the right side of the "green" debate?

Sandor--I think they’re signing on for both of those reasons. They’re signing on because, as one of the companies said it, "We really want to learn about energy efficiency and carbon pricing and how they’re related." When asked, what side of the debate he was going to be on, he justifiably answered, "It depends on what the price is." It depends upon the company’s abilities to learn and what incentives are provided. We’ve got to paint the picture. Another motivation is that corporations see a trend among their shareholders. Over $2 trillion is environmentally screened in the U.S. capital markets. There’s a school of thought that companies have a 1-2% "sustainability" premium in their stock price. There seems to be customer demand on that side.

Some people may be able to be low-cost providers of carbon credits. Another facet of the issue is a desire to participate in the policy debate, to learn what kinds of things should be included in the trading systems, and what form that debate takes. [Corporations] want to have an opinion that is based upon experience and data, and to advocate their positions with solid information. And a very important reason is that pro-active action on climate change is being perceived as the right thing to do. There is growing scientific evidence suggesting there is a significant problem, and they want to be seen to be on the right side of the issue. There are also threats to shareholder value in the form of growing demand for corporate disclosure on climate change action, shareholder resolutions and increased liability. You have risks and rewards driving the process, as well as people believing in the right thing. So, the primary incentives are:

A. Increased shareholder value and demand from stakeholders;
B. Threat to shareholder values; and
C. The desire to be on the right side of an issue with potential global implications.

What is a carbon credit? Please explain how these credits are traded, and what kind of real world offsetting behavior can be expected.

Sandor---A carbon credit is an allowance. This is a system of allowance and offsets. You are allowed to emit a certain amount, and then you would have a targeted reduction. Let’s say it was a million tons, and you promised to get it down to 990,000 tons. If you knock it down to 980,000, you have 10,000 allowances or credits. Those extra allowances can be sold to somebody who hasn’t met their commitment. The result of this will be that the people who can cut most efficiently will do so. They have an incentive to do so because they can sell their excess cuts. Those people who can’t are going to buy them. That will be the cheaper cost to society of reaching the lower level systematically.

Just how is the Chicago Claim Exchange poised to address the problems of environmental pollutants BETTER than the public sector?

Sandor--We believe in free markets, and we believe that the government shouldn’t be in the chip, semiconductors or financial exchange business. This is a voluntary approach. We’re multi-sector. We have the involvement of the agriculture and forestry sectors. We’re multi-national. This is just one more evolutionary step to a full-scale market.

Just how does the Chicago Climate Exchange bring sustainable farming and forestry practices into the equation? What are your plans for Brazil, and what other areas globally do you believe are ripe for reforestation?

In some other systems you are only allowed to buy or sell credits that come from emission reductions elsewhere in the system. We allow offsetting behavior. For example, if you are a utility, you can reduce net emission in your entity by doing offsetting behavior, such as planting trees or changing soil practices. In a hypothetical example, you can eliminate a million tons out of the smokestacks, or you can sequester 20 million by bringing in carbon sequestration from reforestation. Agriculture and forestry--we think that these are beneficial effects to society, in addition to the carbon in the trees, wetlands, etc., in the form of improved soil and water quality.

Describe the reforestation deal that you coordinated with the Montana Indian Bureau, how it works and what the results so far indicate.

This was a deal coordinated by our predecessor firm--Environmental Financial Products. We were engaged by the Salish and Kootenai tribes. They had lost some forest area to fires. We represented them and we sold the future carbon that would come from reforesting parts of their land. They took the proceeds and bought seedlings. The buyer was a European firm that wanted to own carbon credits. It was a novel, cross-border trade.

(NataliePace.com Note: The purchase of "greenhouse gas emissions offsets," aka reforestation, was a coordinated effort between Dr. Sandor, then Chairman of Sustainable Forestry Management, the Confederated Salish and Kootenai Tribes of Montana and the Montana Carbon Offset Coalition. Mr. Tom Corse, Supervisory Forester for the Montana Tribes was pleased to be part of the "win-win" deal, saying, "This first project will set the stage for a process that will help fund chronically under-funded tribal reforestation projects and start the ball rolling on market-based solutions to global warming.")

The fifteen companies that made up the Founding and Charter members of the Chicago Climate Exchange in 2002 had carbon dioxide emissions of 275 million tons annually, which was half of the annual CO2 emissions of the U.K. Was the commitment that they signed, binding them to reduce emissions by 4% by 2006, enough?

Again the purpose of this was initially as a pilot program. It was a demonstration project. The job was to build the institutions. It’s like saying to the Wright Brothers, "You only flew for 56 seconds. You couldn’t even carry mail on that plane, so what good is it?" We want to build the institutions. Markets are like personal computers. What Steven Jobs had in the garage in Berkeley was a very rough copy of what you have today. Financial innovation is like industrial innovation. It occurs with a big idea and then subsequent refinements. We hope to prove that it will fly. You can build the banking, verification, monitoring, protocol, and prove that the system works and will evolve over time.

If you have more questions about this program, how it works or how to sign up your corporation, go to http://www.chicagoclimateexchange.com.

Will Dr. Sandor save the world and win a Nobel Prize to boot? Will Americans catch on to the hybrid craze, started by Cameron Diaz, Harrison Ford, Susan Sarandon and Robin Williams, who began showing up at the Oscars in 2002 in their new Toyota Priuses? You know that your gas-guzzler is so last year, when General Motors has committed to selling e-flex electric cars, like the Chevy Volt, beginning in 2010.

The Subprime Housing Crisis.

by Dr. Gary Becker, Nobel Laureate, University Professor, Department of Economics and Sociology, Professor, Graduate School of Business, The University of Chicago.

The vast majority of economists, including me, were surprised by the extent of the subprime mortgage crisis. This needs to be recognized when evaluating the numerous proposals about how to prevent the next housing crisis, and also about how to help those who are in danger of having their homes foreclosed.

Many economists and members of Congress have claimed that the housing crisis was greatly magnified because unqualified home buyers with limited incomes and assets were not fully aware of the terms of their mortgage loans, such as that the low initial (teaser) interest rates were only temporary. This belief in the beneficial effects of greater knowledge about mortgage terms is inconsistent with the evidence that the most sophisticated banks and investment companies, including Merrill Lynch, Citibank, and Morgan Stanley, have written down their housing investments by billions of dollars. No one can reasonably claim that these banks lacked the skills and knowledge to evaluate all the terms of, or the likelihood of repayment, on the subprime and other mortgages that they originated or held as assets. The losses to investors have been so large, and have so eroded their capital base, that some of the major investment companies have needed large infusions of capital from Middle Eastern and Asian Sovereign Funds (see our discussion of these funds on December 10th).

Although there was some fraud by mortgage lenders and by borrowers, fraud was not the main reason why so many subprime mortgages were issued. Otherwise savvy investors greatly undervalued the risks associated with many of the mortgage-backed securities that they held. They and borrowers alike did not fully appreciate that interest rates were likely to increase from their unusually low levels, and that many borrowers lacked the financial means to meet their mortgage repayment obligations at higher rates, and sometimes even at the low initial rates they had received.

Given the low interest rate lending atmosphere of the past few years, it is highly unlikely that borrowers would have turned down the mortgages they received if they had much better information about terms, or that lenders would have been more reluctant to originate or hold these mortgage assets if they had better information about the credit and other circumstances of borrowers. This is why I doubt that the rules proposed this week by the Federal Reserve to require lenders to get more information about borrowers, and to provide more information to borrowers about the terms of mortgage loans, would have been effective in warding off this crisis, or will be effective in preventing future crises.

Some have proposed that families should not be allowed to get mortgages if they do not meet minimum standards of income and assets, even if lenders would be willing to provide mortgages, and would-be borrowers still want a mortgage after being informed of the risks. This proposal is a dangerous form of paternalism that denies the rights of both borrowers and lenders to make their own decisions. Moreover, it is ironic that only a few years ago, banks were being investigated for "redlining"; that is, for avoiding lending to blacks and other residents of poor neighborhoods. The Fair Housing Act of 1968 prohibits discrimination in lending, and The Community Reinvestment Act of 1977 requires banks to use the same lending criteria in all communities, regardless of the living standards of residents. As a result of the present crisis, however, banks and other lenders are being criticized for equal opportunity lenient lending to all, including black residents of depressed neighborhoods.

The United States housing market is riddled with subsidies and regulations, including among many others, insurance by the Federal Housing authority of mortgages to first time and low income homeowners, tax deductibility of interest payments on mortgages –to families that itemize their deductions- and the quasi-governmental Fannie Mae and Fannie Mac Corporations that channel billions of dollars to the mortgage market. Nevertheless, both the White House and leading Congressional Democrats have proposed additional rules to help borrowers who may have difficulty avoiding foreclosure under present conditions. Treasury Secretary Paulson has been negotiating "voluntary" agreements with mortgage lenders to freeze the low introductory rates for five years on some subprime home loans, and to offer borrowers the right to refinance their loans into more affordable mortgages. The Democrats want to go much further than the administration, and have proposed, for example, to help homeowners renegotiate terms of their mortgages if forced into bankruptcy.

I am skeptical of additional government interventions into a housing market that already has too much. To be sure, homeowners who only temporarily have trouble meeting repayment schedules on their mortgages should not have to go into foreclosure. But lenders already have strong incentives to help these borrowers since lenders are also hurt by foreclosures, especially in the current weak housing market where it is not possible to sell repossessed homes at reasonable prices in poorer neighborhoods. Lenders also have much better evidence and experience than governments can ever have regarding which borrowers have a reasonable chance of handling their mortgages if given some temporary help, such as allowing selected borrowers to be in arrears on payments for a while, permitting some borrowers to renegotiate terms, and making other adjustments that raise the likelihood of eventual repayment. Lenders also are better informed about which borrowers are hopelessly in debt, and are better off going into bankruptcy rather than trying to sacrifice savings or consumption to meet their mortgage payments.

A counterargument to this skepticism is that the government should intervene further in the housing market because the Fed is partly responsible for the crisis by keeping interest rates artificially low. Perhaps the Fed did keep the federal funds rate too low for a couple of years preceding the onset of the crisis, but low interest rates were found worldwide. The main reason for the low rates was not the Fed, but the high savings rates in China and other rapidly developing nations that put pressure on interest rates all over the world.

Instead, the Fed, Treasury, and Congress should concentrate on using monetary and possibly tax policies to help maintain the strength of the American economy that has so far done well despite the housing crisis. If these policies can help promote continued growth of GDP, probably for several months at a slower pace than during the past few years, with a robust labor market and low unemployment, borrowers in reasonably good economic shape will likely keep their homes as they navigate through the housing crisis.

To keep track of Dr. Becker’s continuing research and recommendations, visit his web site and blog. To hear more of Dr. Becker’s recommendations for strengthening the U.S. economy, attend the Milken Global Economic Conference in April 2008.

Oil and Gas Scams:

by the Securities and Exchange Commission

Common Red Flags and Steps You Can Take to Protect Yourself.

Henry . . . was a successful business man, married for 30 years, raised a family and had a good life . . . after his wife’s death, he received an [overnight] package of materials with all kinds of reports, and it was offering an oil and gas investment . . . And it was unsolicited. . . he ignored it . . . But the next day, a salesman called him and used high-pressure sales tactics . . . to persuade him to invest $40,000. And here are some examples of what was said to him on the phone: "These gas wells are guaranteed to produce $6,800 a month in income;" "Some of the most successful investors in the country are interested in these wells;" "There are only two units left in this project;" "We drilled a well in Texas that had these same early gas readings, and the investors all made millions." . . . Over a three year-period, Henry was recontacted 12 times and invested, essentially, his life savings in 4 different gas wells, each time thinking that he had to invest or lose his original investment . . . He ultimately lost over $500,000 to this oil and gas scam investing in wells that always seemed promising at first . . .

- Description of an oil and gas scam victim at the SEC’s first-ever Seniors Summit (July 2006)

If you think you’ve found the right oil or gas investment to "strike it rich," consider this: it may be a scam. While some oil and gas investment opportunities are legitimate, many oil and gas ventures are frauds. Many of these schemes start in so-called "boiler rooms," where skilled telemarketers use high pressure sales tactics to convince you to hand over your hard-earned money.

Once they have your money, scam artists pay themselves first, often using funds to pay personal expenses. In the end, only some of your money may be invested in an actual oil or natural gas well, or none at all.

Red Flag Warnings
If you are considering an oil and gas investment, look for these "red flag" warnings of fraud:
1. Sales Pitches Focused on Highly Publicized News. Scam artists read the headlines, too. Often, they’ll use a highly publicized news item, like volatile gas prices, to lure potential investors and make their "opportunity" sound more legitimate.

2. "Can’t Miss" Wells. Every investment carries some degree of risk so you should be skeptical of any oil and gas investment opportunity pitched as completely safe. Fraudsters often spend a lot of time trying to convince you that extremely high returns are "guaranteed" or "can't miss." Don't believe it.

3. Unsolicited Materials. Be especially careful if you receive unsolicited materials about an investment. Simply ignoring investment-related "junk" faxes, emails, voice mail messages, and regular mail may be your best strategy. And don’t let a package full of colorful marketing materials impress you, even if it’s sent by certified or overnight mail. If you’re not going to research an opportunity fully, do yourself a favor and put any unsolicited materials in the recycle bin immediately. If someone calls to follow up regarding the materials, tell him or her "thanks, but no thanks" and hang up. [Hanging up is critical because scam artists often use scripted sale pitches to keep you on the phone.]

4. Limited Opportunities. Scam artists often try to give you the impression that the " opportunity" they are promoting is scarce, hoping you will hand over your money hastily before doing any due diligence. Resist the pressure to invest quickly, and take the time you need to investigate before sending money.

5. High Rates of Return. Compare promised yields with current returns on well-known stock indexes. Any investment opportunity that claims you'll get substantially more could be highly risky. And that means you might lose money.

6. Tips or Secrets. A promoter may discourage you from talking about the opportunity with someone you trust, like a loved one, attorney or financial professional. If that happens, stop listening, and leave or hang up. Then, be sure to contact us.

Steps You Can Take to Protect Yourself
Here are some steps you can take to avoid being scammed:

• Ask questions and check out the answers. Fraudsters rely on the sad truth that many people simply don't bother to investigate before they invest. It's not enough to ask a promoter for more information or for references - fraudsters have no incentive to set you straight. Savvy investors take the time to do their own independent research.
  
  
• Contact state oil and gas regulatory agencies. You may be able to verify information provided in offering materials by contacting the oil and gas regulatory agency in which the wells are allegedly being drilled. For example, these agencies generally have information about a company’s drilling history that could confirm claims of prior success.

Investor Tidbit:
You might be surprised to learn that the Railroad Commission of Texas oversees the Texas oil and gas industry. Unfortunately, state oil and gas regulatory agencies don’t have uniform names. If you’re having trouble finding the agency that regulates oil and gas in a particular state, enter the State’s name - followed by "oil and gas" - into your favorite Internet search engine. The appropriate agency should be listed near the top of your search results. If you are still having trouble, call us at (800) 732-0330.

• Research the company before you invest. You can contact the secretary of state where the company is incorporated to find out whether the company is a corporation in good standing. You also will want to understand the company's business and its products or services before investing. Before buying any stock, check out the company's financial statements on the SEC's website, or contact your state securities regulator. All but the smallest public companies have to file financial statements with us. If the company doesn't file with us, you'll have to do a great deal of work on your own to make sure the company is legitimate and the investment appropriate for you. That's because the lack of reliable, readily available information about company finances can open the door to fraud. Remember that unsolicited materials should never be used as the sole basis for an investment decision.
  
  
• Know the salesperson. Spend some time checking out the person touting the investment before you invest - even if you already know the person socially. Always find out whether the securities salespeople who contact you are licensed to sell securities in your state and whether they or their firms have had run-ins with regulators or other investors. You can check out the disciplinary history of brokers and advisers quickly - and for free - using the SEC's and FINRA's online databases. Your state securities regulator may have additional information.

If you encounter a problem with an oil and gas investment, you can send the SEC your complaint using their online complaint form at www.sec.gov/complaint.shtml. You can also reach the SEC by regular mail at:

Securities and Exchange Commission
Office of Investor Education and Advocacy
100 F Street, N.E.
Washington, D.C. 20549-0213

Remember - an educated investor is the best defense against fraud! For more information on how to invest wisely and avoid fraud, please visit the Investor Information section of the SEC website.

This article is reprinted with permission from the SEC.

2008 Company of the Year.

Natalie Pace chats with Premium Subscribers on 2008, green, how to get started on the path to wise investing and more!

Earlier this month, premium subscribers were treated to a Q&A with Natalie Pace on how to start on the path of wise investing, how to use the Hot News on Cool Stocks article and what to do about companies, like Apple, that are so exciting that everyone wants to buy in at the 52-week high! Natalie also dropped the news that she will be reporting on her Company of the Year in October, instead of January, and discussed the reasons why. Very important news indeed!

Natalie: Good morning! Before we begin the Q&A, let’s start with a general market overview. It’s been quite a rollercoaster this year, hasn’t it? One thing I don’t want to overlook, however, is that the markets are still up on the year and have produced strong results over the last two years.

General Stock Market Performance

FYI: we predicted Nasdaq to be the 2007 superstar performer earlier back in November of 2006. Click on Wow! Dow! Or Nasdaq Now! Article, from vol. 3, issue 11, to review that article.

As you can see in the chart above, Nasdaq is still outperforming the S&P500 and the Dow Jones Industrial Average indices by quite a lot. Legacy corporations have been more burdened with debt and pension plan obligations than younger corporations, like Google and Microsoft, and as a result are underperforming the marketplace. On the other hand, technology, Internet, new media and clean energy were posting very strong growth in real sales worldwide, and employed staff who were accustomed to managing their own pension and health care. Without the extra pressure on the bottom line or the administrative nightmare of managing the plans, many younger companies on the West Coast are sitting on war chests of cash, including Google, Microsoft, Apple and more.

Going forward, the most important thing for everyone to do is to look at their current nest egg and make sure that it is properly allocated, so that they are not over-exposed to pension, debt and health liabilities in the event of a slow-down in the economy – which is being predicted. The pension plan revolution that is going on in America is not being well-publicized, but rest assured that those corporations that are still negotiating with their workforce to pay pennies on the dollar on their retirement obligations are increasingly vulnerable in a worldwide marketplace.

Clean energy is the bright spot on the horizon, and the returns in that industry are only beginning. Europe is leading the world on its commitment to clean energy, with Germany as the number one solar energy country. However, as a result of the popularity of all things green, you have to beware of extremely high prices in any company that is involved in solar, wind or clean electric energy.

A rising tide lifts all ships in the stock market, but a sinking tide certainly grounds even the speediest boats as well. In fact, as a result of the uncertainty in the marketplace going into 2008, I am postponing the naming of the 2008 Company of the Year until September 2008. I’ve been tempted to do that every year since I began publishing because September is the lowest performing month of the year in the stock market (historically), and thus, a better buying month for the year. (Even companies like Suntech, our 2007 Company of the Year, have done better from their October buy-in than the January price.) Since I’m not thrilled with the forward-looking economic data I’m seeing, 2008 is the year to switch the Company of the Year announcement from January to October.

In short, I think the most important game in town in 2008 will be asset allocation and underweighting legacy companies, particularly in the Dow Jones Industrial Average. In the trading portfolio (that much smaller percent of your nest egg where you take on higher risk for higher gain), I’d be very interested in profit taking at every opportunity available. I’d avoid buying into high price to earnings ratios. Price to earnings ratios vary by industry and maturity of a company, so I cannot merely give you a number to avoid. If you don’t have a great understanding of P/E, your first step should be getting more educated, in the chats and retreats that we offer, before you begin trading stocks or options!

There is still room in the January 2-5, 2008 Get Rich and EnRich Retreat. If you are interested in re-examining your portfolio, retracing or learning the fundamentals and getting your foundation of wealth secure, then move heaven and earth to be at this life-changing retreat. Call 1.866.476.7442 NOW or go to the Get Rich and EnRich banner ad, which is located on the home page at NataliePace.com.

Questions and Answers:
Subscriber: I am starting out my subscription with NataliePace.com fully invested and holding perhaps 75 different stocks. Should I just sell them all and start with Natalie's suggestions? Or what?

Natalie: Your first step will be selecting a great certified financial planner, who can help you assess the best plan going forward based upon your desires, goals, income and retirement age. Be careful about just selling everything. You could have very expensive, and perhaps unnecessary, tax liabilities, unless you are selling within a tax-protected account and not withdrawing any funds. Again, getting educated and selecting the second most important person in your life – your certified financial planner – are the first steps before you just jump in and take bold actions. I’d suggest that you consider coming to the retreat January 2-5, 2008. The investment you make into four days of learning should be enough to get the foundation of your house of wealth laid and a game plan going forward. (Remember: I’m not a broker; I’m a journalist. A broker should know your individual needs and goals and help draw the game plan to get you there.)

How do you think Apple is performing?

We listed Apple at $85. I think it’s performing fantastically! Are you looking to buy or sell?

I think it looks exciting from the ground and grass roots, the iPhone and the computer, so I think I’m looking to buy.

Have you done the Stock Report Card yet, to make sure that you are following the investment recipe? Have you asked the four questions to determine that it is going to lead the industry going forward? Are there any competing companies that might challenge Apple in 2008?

Click to access your own Blank Stock Report Card. I recommend setting this up in your own Word or Excel document, so that you can sort the companies by Price to Earnings ratio. (You can also find a blank stock report card under the Investor Edu section, Stock Report Card option.)

Below are the investment recipe and the four easy questions for picking the leader in the sector.
Investment Recipe:

1. Invest in what you love
2. Pick the leader in the industry (in real estate, it’s location, location, location)
3. Buy low, sell high

4 questions to Determine the Leader in the Sector

1. What’s the product?
2. Who’s going to buy it and why would they like that product more than the competitor’s version?
3. Can the company make a superior product now and going forward, and get it to the masses while the appetite of their customers is piqued and the product is fresh?
4. Who’s running the company, and how motivated are the employees to deliver superior product faster, cheaper, better?

I’m a newbie. I was going to open an account on Scottrade and put in some money on the highlighted picks on the hot list, but don’t know if I should invest in the highlighted picks that came out on the 1^st of December and are no longer highlighted in the mid month report.

Good thinking! Your perspective is key for all newbies. The highlights are key! The companies that are highlighted are trading at or near the price that we first featured them at, and thus, might be in buying range. The companies on the list that are not highlighted are already moving up from where they came onto the list. It could be because the price has risen, or it could be because the outlook going forward has become less auspicious.

Thank you. When a pick gets taken off and you have it, do you sell it then right away?

It is important to realize the difference between "taken off" and "not highlighted." When a company is on the Hot list, but not highlighted, it means that it still has potential to earn gains, based upon the news that we’ve been able to review and report on. When a company is deleted from the list, then that means that there is a lot of news and red flags indicating that the prognosis going forward is not great. Since we are a news organization and not a brokerage, we’re reporting on news, not giving you a buy/sell recommendation, so you’ll always be able to review the facts and make your own determination. In fact, some companies might still be great for a long-term portfolio, but we’re taking it off the list because anyone looking to "buy low and sell high" would want to lock in gains for the short term. The real question to determine is simply "What is your personal game plan with regard to the stock in question?" And that question is for you and your CFP to determine.

I’m utilizing highlighting and deleting from the lists to help you understand how I would interpret the news, but, as I indicate at the beginning and the end of the article, your choice to buy and sell must take into consideration your personal needs and desires. For instance, a day-trader might buy and sell Google five times a year (and have great gains), whereas another person might buy Google at the 52-week low and hold it to for decades to will to the kids. Only you and your CFP know which plan is right for you.

Apple is a fantastic company with fantastic products that are going to continue to lead the world into 2008. There is a lot of room for sales growth, since they don’t own a very large percentage of the marketplace of computers. (They certainly own the marketplace of music.) However, their computers are so much more expensive that there will continue to be a built in marketplace for the PCs of the world. And Apple’s share price has already doubled this year. If the stock market softens in 2008, it will be harder for Apple to score fantastic returns. Not impossible. But harder. These are things that are to be considered when you buy and sell stocks, and statistics we report on twice a month, as conditions in the economy are always changing!

I’m new as well, and really did not use a technique to buy other than the fact I liked their products. I will do more research before I buy!

Apple’s price is high and the price to earnings ratio is also high for such a big company. Remember the third ingredient in cooking up profits – NEVER PAY RETAIL! A successful investment in anything, a great company, great home or a great classic car – is only possible when you buy low and sell high. If you buy high, you might wait years to earn gains!

I agree but I thought perhaps they would break out.

You are educating yourself! Bravo! Anyone who picks a great mentor and copies what s/he does is going to learn faster and better, so I applaud you for being willing to learn. Btw: Apple is a company that I follow on my Hot News list, so "researching it" can be as easy as reading a 5-minute update on the recent news (put in context with the news over the past few quarters). I featured Apple in February of 2007 at $85. They have already broken out, especially given that they had to jump above the market’s rollercoaster ride in 2007. Apple has more than doubled! Remember another cardinal rule: if you’re buying on news, you’re late. We listed Apple a few months BEFORE the iPhone release, and got to watch the elation of consumers who loved the product. If you’re buying now because the iPhone is making headlines, odds are that you’re buying high. If you want to verify, check the 52-week low and high.

You can always put Apple on your shopping list and wait for a better buy-in. The stock markets wax and wane month-to-month and year-to-year. Gains usually favor patient investors.

Do you suggest stop loss orders when initially buying the stocks on the Hot List? And how do I learn or know where to put them?

This is just my opinion, but I don’t like stop loss orders ever, and especially for the Hot News List. I think that you should do more research BEFORE you buy, which means there will be less odds that the investment is a bad one, if it heads south for a little while. In that scenario, when an investment heads south, it could actually be an opportunity to add more shares to your portfolio at a bargain price.

Thanks that makes things easier!

Well here’s why: most companies that I feature are featured early. Most companies that I’m featuring, we’re featuring them early. You never know when they are going to pop. I can give you tons of examples, including some of the best performing companies on the list, that have gone down before they went on for extraordinary gains. Since we’re highlighting the companies when they are in buying range, if they go down, you’ve got the opportunity – perhaps – for a two for one sale, as in the case of Wisdom Tree! The companies on the list have been carefully researched. They won’t all win, but I think stop loss orders are for people who are not going through the proper and thorough examination in the first place, to determine that they’ve made a sound investment and purchased at a reasonable price. Remember, sound evaluation of a stock means that you turn over enough pieces of the puzzle to get a good picture of the health of the company BEFORE you buy.

I recently came into an unexpected windfall and have a nice amount of money to invest. I know you suggest putting an amount equal to my age in safer vehicles such as bonds and certificates of deposits. What should I be looking for when considering those options?

Congrats on your windfall! The most important next step that you take is to find a great certified financial planner/money manager. Get referrals from rich people who love what their broker is doing for them. Do not rely upon referrals from banks or just walk in cold to brokerages, if you can avoid it. If you have more than $250,000, you should qualify for active money management from a veteran who has had over two decades in the business, like Kelley Wright at Investment Quality Trends and Paul Woods and Meri Anne Beck-Woods at Odyssey Advisors. (Contact them through their websites at IQTrends.com and OdysseyAdvisors.com, respectively.)

Bonds are very difficult to invest in on your own. Bond funds are NOT bonds, they are stocks. So, if you have to diversify on your own for now, it’s easier to keep that safe part of your portfolio in T-Bills and money markets than it is to get up to speed on bonds. Although you may not be getting superstar returns, cash was the top-performing asset class in 2000 and 2001, when the stock market slid, during that recession. That is what asset allocation is for – to protect you from the volatility and/or backtracking of the stock market.

Read How to Find a Broker for tips on what questions to ask, and how to investigate (easily) whether or not the broker you are interviewing is a rock star performer or has complaints from prior clients. This article is located under the Investor Edu link on the home page at NataliePace.com.

I’m very new at this. My first question is, "Where do I go to get a good stock broker that will listen to me and what I want to choose, not try to force me into diversifying?" If you recommend that I do it myself, where do I start? I’ve heard of e-Trade, but like I said, I’m very new at this and would like to do what’s best for me. I am in the process of selling my company and will have some assets to leverage in the market soon. I need sage advice!

Brokers are salesmen, and you could get sucked into something that’s not right for you simply because s/he would like the commission. So, interview at least 3 qualified candidates for the job, and take the questions in the "How to Find a Broker" article with you. Make sure that you tell any qualified candidate your investment criteria BEFORE you open the account, and listen carefully to their response. If s/he responds, "You should be more concerned with returns," that is a red flag that should alert you that s/he wants to be in control and may be resistant to following your desires. If s/he says, "I know some great ETFs you can choose from," that’s a green light that s/he is not only listening, but also well versed in the space! Check into the person’s background on FINRA.ORG for any complaints before putting your life savings into his/her hands.

There are two great money managers, who take clients with over $250,000 in assets, who write frequently for my website. Both have decades of experience. So, you might call OdysseyAdvisors.com and IQTrends.com as well.

ELON has taken a down side hit lately. They still look like they are on the right track to me, however. Any thoughts?

I just bought shares in ELON yesterday. Full disclosure. Their last quarter wasn’t up to the earnings potential they wanted, and Wall Street punished them, but I still like the company. I’m going to keep a close eye on upcoming news, but I like the product and love the red-hot industry of clean energy, which is only just beginning to catch fire!

I’ve also bought some more. Also, wondering about eBay with the Skype acquisition. No movement yet. Your thoughts?

EBay took a tax-related write down for their purchase of Skype. The markets interpreted that as the company "overpaying" for Skype, which in the one-year perspective might be true, but, in my view, will not be true for the long term. As I’ve said many, many times, most people are unaware that Skype is the fastest growing site on the Internet, ahead of social networking giants like MySpace! eBay’s write-down of the investment was beneficial on a tax basis. I think Wall Street didn’t report on this well, and that once investors start seeing the Skype revenue in a different light, eBay will benefit.

What’s hot this month to buy?

In general, I’m not in a buying mood in December. I like the September Back to School Stock Sales the most for buying. I like January for looking to see which companies have made me a lot of money and whether I need to sell to lock in those profits. As I mentioned earlier, I’m so keen on this going into 2008 that I’ve delayed announcing my Company of the Year until October 2008.

Do you think the Feds will continue to drop rates?

The Feds will have a lot of pressure going forward to keep the economy chugging in the face of less M&A activity and a softening real estate market, but that is offset against rising inflation due to the commodities costs, like oil and metals and a need for a stronger U.S. dollar to compete on the world stage. So, as I say quite a lot, "There are about 99 laws that can predict about 3% of the things that happen in the financial world," and nothing is ever certain in this field! I’ll have a very strong idea of what’s going on in a few months when I check in with my mentor, Dr. Gary Becker. Dr. Becker is the best predictor of forward movement of the economy of anyone I know! In the meantime, the best medicine is to check in twice a month to get my news updates, and make sure that your assets are allocated and protected!

Having said all of those disclaimers, I’m just journalist, but I’d say interest rate cuts may be in our future. It won’t help subprime mortgage foreclosures very much, however, because it is the people who having their payments double at the new reset rate who are getting into trouble, not the average homeowner.

What are your thoughts on Libor rates this year?

Libor is not my area of expertise. However, my general comment would be that unless you’re an economist or an analyst, there is no reason for you to be trying to figure out every economic update that comes across the wire. Newbies try to figure out what they should do by looking at the data that professionals look at, and that is not going to be a winning strategy until you become a professional and really know how to utilize all that data (a multi-year investment in financial services education). And even professionals are earning on average just 10-12% a year. I don’t profess to know the first thing about all of this, and have a system based upon common sense and consumer experience that works much better.

Dr. Becker looks at a lot of data, but the single-most important factor that correlates with GDP growth, according to Dr. Becker, is productivity. Makes sense, doesn’t it? When people are working hard making products that the world loves, that country grows. Google’s employees were doing a bang-up job of getting a product to the world that we loved. General Motors and Ford were surpassed by Toyota in their products. Those simple facts are not economic data that you see reported on very often, outside of these pages. So, if I were you, I wouldn’t hang on LIBOR reports, or Fed action or trying to read any tea leaves. The state of the corporations and its contributions to the larger economy are easier to sense, smell and understand when you see the conditions of the workplace, the popularity and durability of the product and all of that occurring at a price you can afford!

The pundits you are watching on television are briefed more on their sound bytes than they are on their statistics, so if you’re going to have a news source outside of NataliePace.com, I only suggest that you be very discriminating and select journalists who are interviewing the same admired economists and analysts that I am relying upon and telling a more complete story than just the most recent news line item. Many of the television financial news shows are for entertainment, more than the usable value of their information.

So, are all the news programs about the economy and the market just a waste of time and energy?

Most news reports are negative – statistically – by far. And a large portion of the daily news shows are simply reporting the data off of press releases – i.e. recent news, without very little regard for important historical information or how that piece fits into the puzzle going forward. I think power searches to find information on the company you are interested in, along with that company’s competitors, are a far better idea. You can organize that data in a Stock Report Card, and get a far more complete picture than you’ll read in the majority of the articles and television reports available. If you come to my retreat, I’ll teach you both power searches and how to complete the Stock Report Card. If you can’t come, keep educating yourself by reading the news in this ezine and coming into the chats we host online.

When can we turn on and what stations? Are there any media sources that you recommend?

Dr. Gary Becker, FINRA.org, FederalReserve.gov, SEC.gov and NataliePace.com! Click on the names to access their websites, or Google them. Dr. Becker has a great blog on the subprime housing crisis this month! It is a must read. You’ll learn more at the seat of the masters than the pundits!

When can we see you on TV?

I’m flying under the radar while I finish my book. The book is slated for a fall 2008 release, at which time I’ll be booking as many national television shows as possible! Oprah here I come!

How do you currently feel about WWAT, UXG and HOKU?

Check out this month’s Hot News on Cool Stocks List for an update!

Please note: NataliePace.com does not act or operate like a broker. We are a publishing, media and information center. This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. The publicly traded companies mentioned in this article are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.

IMPORTANT DISCLAIMER: Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

Citigroup, WaMu and HSBC:

by Kelley Wright, managing editor of Investment Quality Trends.

The Financials Swallow a Bitter Pill.

Kelley Wright, Managing Editor, Investment Quality Trends stock newsletter.

Well, this December/Santa Claus rally thing just isn't following the script now is it? With the inflation numbers of the mid-December, we now know why the Fed didn't lower by a half a point. Of course it didn't stop the Street from throwing a little tantrum when they didn't get their way but come on, with the dollar being systematically devalued what did everyone think was going to happen to the price of commodities? In hindsight the Fed didn't really have a choice. As I opined in this space in July/August, the banks needed to do three things: 'fess up and take the write-downs; roll the assets they couldn't sell or didn't want to mark-to-market onto their balance sheets; slash costs, which means pink slips.

One and three above have been pretty much done by most and now Citi, WaMu and HSBC have finally bit the bullet on number two. As an old mentor of mine was fond of saying, "There is no pain in change; only in the resistence to change." Indeed.

WaMu took some pretty severe medicine; my suspicion is that they know they have some more write-downs coming so they wanted to set aside the provisions for now and just get the pain and bad news out at once. They did give the Street a little surprise when they bumped their preferred offering to 3 billion from the originally stated 2.5 billion, which shaved another couple of points off the stock, but they may have finally found a bottom. We will know soon.

Gold is acting a little curious; with the inflation numbers, one would expect gold to be screaming higher. This may be a case of selling on the news, which means I believe it is just a normal retracement.

Well it is time to close the books on '07, which I think for many will be a pleasure. This is one pig that there just isn't enough lipstick for.

May you and yours have a Blessed New Year.

Peace,

Kelley

Kelley Wright is currently outperforming all of his peers, by bringing in the top risk-adjusted returns on Wall Street for the past 20 years, with his stock newsletter, IQTrends.com, at 12.8% annualized gains, according to Hulbert’s Financial Digest. To subscribe, go to IQTrends.com.

Attract the People You Want and Repel the People You Don’t Want.

by Chellie Campbell, author of Zero to Zillionaire.

You want to become expert at repelling people. Take a stand for yourself, choose your likes and dislikes, and stand proudly in them. Don’t worry about trying to fit in. When you are truly yourself, other people will see it and know you for who you are. This simplifies life immeasurably. Your People will be drawn to you more quickly, and Not Your People run away far and fast. This is a good thing. You don’t want your life cluttered up with a bunch of people who don’t really like you. It’s too much of a time and energy—and money—drain.

I was thinking about this as I drove to the Jonathan Club in downtown Los Angeles, to speak to the Los Angeles Chapter of NAWBO (National Association of Women Business Owners). I was dressed in my usual "Give-a-speech-costume"—blouse, blazer, pants and gold tennis shoes. Gold tennis shoes are part of my brand now—I’ve been recognized in bookstores because of my shoes. I had a slight hesitation about wearing them to this event since it was a rather corporate environment, but I decided to stick with my usual style.

Wouldn’t you know, my momentary hesitation manifested itself in a challenge issued to me by one of the Jonathan Club employees in the lobby. "Excuse me, miss," he said frowning disapprovingly at my feet, "but we don’t allow tennis shoes in our club."

Oops! Caught already. I grinned up at him and said, "I’m terribly sorry, but I am the speaker this evening and this is my costume."

He wasn’t buying it. "Don’t you have any other shoes?" he inquired.

"No," I shrugged, "not with me." Oh, dear, I thought, am I going to be thrown out? Barred from the club? My eyes widened and I shifted into sales mode, "You know, I’m sure your dress code means tennis shoes as in gym shoes. These are clearly not dirty old gym shoes—they are gold mesh, dressy shoes with diamonds on them."

He paused for a long moment as he thought this over, examining my feet. It must have made sense to him, because he said, "Okay…but hurry!" He wanted me out of his jurisdiction as soon as possible, and I was happy to oblige him as I scurried upstairs to the meeting room.

The meeting was fabulous with lots of great people—no one else in tennis shoes, I noted. (They must have been tipped off to the dress code.) They were all wearing those high-heeled pointy-toed instruments of torture the fashion industry insists on foisting on us—and we pay big bucks for them, too. And this is different from ancient Chinese foot-binding—how? Now I’m always comfortable. It made a big difference in my shoe budget, too.

The reactions to my gold shoes are always very interesting. Lots of people smile and comment how they just love my shoes, how comfortable they look, etc. I know these are My People. And of course, some people don’t like them—one woman told me after the talk that I should dress more professionally if I was going to talk about a serious subject like money. I just smiled, because that’s one of the problems I’m trying to solve—that people are too serious about money. Besides, I knew what she did for a living—she sold suits!

People—like shoes—come in different styles. Yvonne Williams, author of Don’t Wear Tight Shoes, told me that women are having their little toes removed so they can wear Jimmy Choo shoes. Eeww. Stop blending in. You are unique. Pick your own style. I remember once walking through the Book Expo in my gold tennies, getting snooty looks from some New York babes-in-black in their pinchy-feet-eight-inch-spike heels. I reveled in it. I’m not part of any matched set. My astrologer promises me that I’m going to become more eccentric. Fabulous! Best news she could give me. Maybe I’ll "wear purple and a red hat that doesn’t go," too.

But don’t judge me until you walk a mile in my gold tennis shoes.

Chellie Campbell is the author of Zero to Zillionaire and The Wealthy Spirit. She created and teaches the Financial Stress Reduction® Workshops, on which her book is based, in the Los Angeles area and gives programs throughout the country.

If you are stuck in a rut in your business or life and/or having too much "month at the end of your money," Chellie’s workshop might be just what you need to get things on the right track. You can sign up for Chellie's Ezine and workshop at www.chellie.com.

Twenty Tax Tips for Year-End 2007.

by Rande Spiegelman, vice president, financial planning, Schwab Center for Financial Research

If tax time is more terrifying to you than your holiday credit card bill, read on. First, take heart that you have more than two months to take action to minimize the pain of April 15. Then, consider the 20 bite-size tax tips below affecting key areas of your financial life -- specifically your portfolio.

Whether you do your own taxes or rely on a tax professional, these tried-and-true strategies may help you keep more of your hard-earned income and boost your after-tax returns. After all, it's what you keep that counts!

Get Started: Six Simple Steps
Dust off last year's return. Using it as a starting point, begin this year's process by updating some of the key inputs: your salary and other income, deductions, and the dependents you'll claim. If you use tax preparation software (such as that available at www.schwab.com/tax), it's easy to run a quick estimate of where you stand.

Alternatively, you can ask your accountant for an early read. If the initial estimate seems high, don't panic. Get going by taking these six simple steps.

• Double-check your withholding. You want to pay the IRS its due but not a penny more. So make sure you're not having too much (or too little) taken out of each paycheck. The same holds if you make quarterly estimated tax payments.
  
  
• Consolidate debt. Consider replacing credit card debt with a lower-rate, tax-deductible home equity loan or line of credit.
  
  
• Account for refinancings. If you lowered your mortgage interest rate in the past year, you may now have a lower-interest deduction. Also, if you used any of the proceeds for something other than physical improvements to your home, that amount may be subject to the alternative minimum tax (AMT). On the brighter side, remember that points paid in prior refinancings that you didn't already deduct can be deducted in the year you refinanced again.
  
  
• Prepay quarterly estimated state tax payments. If you're not vulnerable to the AMT, consider paying your fourth-quarter 2007 estimated state income taxes (plus any estimated balance due) by Dec. 31 so you can take the deduction on your 2007 taxes.
  
  
• Prepay property taxes. Many counties bill taxpayers twice, in November and February. If you pay your February installment by Dec. 31, you can take it as a deduction on your 2007 return. Again, watch out for the AMT, which disallows these deductions.
  
  
• Avoid the AMT. More taxpayers are facing the AMT, particularly those living in high-tax states. If you're one of these taxpayers, you might want to flip the typical strategy of deferring income and accelerating certain deductions. Instead, try to defer payment of state and local taxes and accelerate income to the point where you're no longer subject to the AMT. Multiyear planning is a must -- talk to a tax professional.

Portfolio Planning: Three Tax-Smart Rebalancing Strategies
Year-end is a great time to give your portfolio a checkup. Consider these tax-smart strategies to help boost your after-tax returns.

• Harvest losses. No one likes a losing investment. But at tax time, they can be blessings in disguise, as you can use capital losses to offset taxable capital gains, plus up to $3,000 in ordinary income ($1,500 for married couples filing separately). Look in your taxable accounts for investments with relatively large losses where you don't expect a comeback. Remember, any losses you can't use to offset gains this year can be carried over into future tax years. One word of caution: Watch out for the so-called wash sale rule, which prohibits taxpayers from recognizing losses on sales of securities that are repurchased within 30 days.
  
  
• Make the most of tax-advantaged accounts. You can also use retirement accounts to help rebalance your portfolio without incurring a tax hit. Let's say your long-term plan calls for 60 percent stocks and 40 percent fixed income, but the recent rally has pushed your stock holdings to 70 percent of the portfolio -- and you have no losses (congratulations!). You might still be able to bring your asset allocation back in line without incurring 2007 taxes by selling stocks in tax-deferred retirement accounts like IRAs or 401(k)s.
  
  
• Consider cash flow. If you're living off your portfolio in retirement, remember to set aside any cash you might need for the next 12 months as you rebalance. Assuming the portfolio described above, you'd sell the 10 percent overweight to stocks, take out what you need to live on and then reinvest the rest in bonds until you're back on target.

Retirement: Four Tax-Savvy Planning Ideas

• Take full advantage of your employee retirement plan, at least to the point of any employer match. And if you're 50 or older, make a catch-up contribution. If you expect to be in a higher tax bracket down the road (for example, younger workers who have yet to reach peak earning years) and your employer offers the new Roth 401(k), consider it. You won't get any up-front tax reduction. But after you retire, qualified distributions will be tax-free.
  
  
• If you're self-employed, consider a small business retirement account such as a SEP-IRA, SIMPLE IRA, Individual 401(k) or other qualified retirement plan. Contributions are tax-deductible and grow tax-deferred. If you open a qualified retirement account by Dec. 31, you have until the day you file next year, including extensions, to make this year's contribution.
  
  
• Be sure to make your annual IRA contribution. Even though you have until next April 15 to make your 2007 contribution, the sooner the better -- your money will have more time to benefit from potential long-term compound growth. Then, make your 2008 contribution early next year. Consider a Roth IRA if you're eligible, especially if you're not eligible for a deductible traditional IRA contribution. If you're not eligible for a Roth today, you might want to make a nondeductible contribution to a traditional IRA anyway, as recently passed tax legislation allows anyone to convert to a Roth IRA starting in 2010 without any income restrictions, though you'll still have to pay taxes on the earnings.
  
  
• If you're age 70 1/2 or older and required to take minimum distributions from your retirement accounts, don't forget to do so before year-end. If you just turned 70 1/2 this year, you have until April 1, 2008, to take your first required minimum distribution. However, waiting to do so means you'll need to take two distributions in 2008, which will boost next year's taxable income. A little multiyear planning using the tax estimator at www.schwab.com/tax can help.

Education: Two Tax-Preferred Savings Plans

• Coverdell Education Savings Accounts: If you're eligible, you can contribute up to $2,000 to a Coverdell account on behalf of a child. Contributions grow tax-free and qualified K-12 and higher-education-related withdrawals are tax-free. You have until next April 15, but if you make the contribution by Dec. 31, it will count as a gift for this year instead of next year.
  
  
• State-sponsored 529 plans: Anyone, regardless of income, can contribute up to $60,000 ($120,000 for a couple) this year, without incurring gift taxes, if you make an election to have the gift treated as though it were made over five years. You don't have to invest in your own state's plan. But if your state offers an income tax deduction on in-state 529 plan contributions, then that's another reason to make your contribution by Dec. 31. Still, it's a good idea to compare state plans -- especially if you live in a state with no deduction, such as California.

Giving: Five Tax-Smart Tips

• Act before year-end. You can give up to $12,000 each to as many individuals as you wish this year and pay no gift tax. Spouses can "split" gifts for a total of $24,000 per beneficiary, per year. Gifts beyond that are taxable, but only to the extent they exceed $1 million over a donor's life. The lucky recipient of the gift owes no gift or income tax, and doesn't even have to report the gift unless it comes from outside the United States.
  
  
• Pay someone's education or medical bills. You can also make unlimited payments directly to medical providers or educational institutions on behalf of others without incurring a taxable gift or dipping into your $1 million lifetime gift tax exemption.
  
  
• Shift income to tax-advantaged children. Consider gifting appreciated securities and stocks whose dividends are taxed at low long-term capital gains rates to children age 18 or older, because they pay tax at their own rate -- likely 5 percent (and headed to 0 percent in 2008-2010 before expiring in 2011). (1)
  
  
• Give appreciated securities to charities by year-end. Consider donating appreciated securities that you've held for more than a year for a full fair-market-value deduction and no capital gains tax. If you give to a donor-advised fund (such as the Schwab Charitable) by Dec. 31, you get the tax break this year and can take your time deciding how best to distribute your gift.
  
  
• Donate from your IRA. If you're at least 70 1/2 years of age, you can donate up to $100,000 from your IRA directly to charity income-tax-free for 2007. That's likely better than taking a taxable distribution and deduction.

All of the Above?
Whether some or all of these suggestions fit your situation, we're only scratching the surface here. Get advice from a qualified planner, if you need it.

After you decide what to do this year, resolve to make financial planning a year-round exercise going forward (you've probably got better things to do around the holidays). That way, it'll be easier to check your progress, update your plan and, if necessary, take action long before the ball falls in Times Square on New Year's Eve.

For the online version of this story, please click to go to Market Insight, the Research and Strategies publication of Schwab.com.

 

FAQs: Is Natalie just another Suze Orman?

Q&A with Natalie Pace, founder and CEO, Women’s Investment Network, LLC, dba NataliePace.com, on what differentiates NataliePace.com from the other financial news and information sources.

Question: What’s the difference between you and Suze Orman?

Natalie: Suze blazed the trail and got people thinking about their money. I am asking people to think about the power of their money to transform their own lives and the world at large. Our world and our lives look the way they look as a result of the things we invest our time and money in. Many people own tobacco companies (without even knowing it), when they’d rather be investing in solar energy. My ezine and strategies make it easy and effortless to put your money where your heart is – to take 136 billion dollars out of the tobacco industry and invest it in healthy lives and a healthy planet. If we’d all done this 10 years ago, everyone’s homes would be powered by clean energy because those companies would have had the investment dollars to develop their products and put them in Home Depot. Ever wonder how tobacco companies stayed alive while every state in the U.S. was suing them? With your money.

Is that what you mean by adding a splash of green to Wall Street and transforming lives on Main Street?

Yes, that is my mission and vision to create a group of enlightened investors out of the 100 million Americans who have stock holdings! And the great news is that my ezine is proving that going green creates green – for your own wallet. But the message is not limited to that to socially conscious investing – it is about empowering individuals to educate themselves and understand not only how to make money, but also how to protect their nest egg properly, so that they are never over-exposed in any one asset class. If you have all of your holdings in real estate or stock, you are too vulnerable in the event of a downturn. You can be into dirty coal, gas-guzzling cars and absinthe and still benefit from this ezine, with regard to the news and information you get from our ongoing market reporting. At least you’ll know how to cover your assets, which is where most people get into trouble with investing.

Speaking of covering your assets, why do you use so much sexual innuendo in your writing?

Many people have fear around money. I call it "investing with stomach acid." I touch pleasure points when I talk stocks to titillate the endorphins, to start touching pleasure points in your brain when you think about money. Once you come to love prosperity, then you can embody it in a healthy way. When people start investing with heart and soul and wisdom, instead of fear and greed, this world will become a very, very beautiful place. I also want to transform their personal ability to earn greater returns by making money a pleasurable experience for them. When you trade with fear, the odds are that you are buying high and selling low. That is what fear does, even though it is the exact opposite thing that everyone knows – with their brain – to do. When you invest in companies that have products and services that you know and love, then you know the value of your investment and stand a better chance of being on the winning buy low; sell high side of the Wall Street tennis match.

What does it mean when organizations, like TipsTraders.com, rank you as the #1 stock picker?

That means that the companies I report on are making readers who invest in those companies rich! I was the first on Fox News, back at the IPO in 2004, to say, "Invest in Google. It’s a stock you’re going to want to own." At the IPO, most Wall Street pundits were pooh-poohing the stock. I found MySpace when they had less than 35 million users. Taser International was my 2003 Company of the Year, before it went on to earn up to 9000% gains for investors. In fact, my 2003, 2004 and 2007 Companies of the Year have posted up to 9000% gains (Taser), up to 690% gains (Opsware) and up to 215% gains (Suntech Power Holdings), respectively. MySpace, my 2006 Company of the Year, has been a large part of News Corp’s success with shareholders. Only OSI Pharmaceuticals, my 2005 Company of the Year, has lost money. So three out of five are superperformers, one is performing well above the market and one is down. That’s the kind of record that puts you on top on Wall Street.

Why do you tell so much about your personal story in your articles?

When I first got married, my Chinese mother in law sent me into a fish market to buy "fresh fish" for dinner. She’s a fantastic cook, and a VERY discriminating person. I wanted to do a great job, even though I didn’t know the first thing about buying fish, let alone at a Chinese fish market where everyone spoke Cantonese – a language I did not understand at all. There were literally hundreds of options to choose from, and I was clueless. I asked the guy beind the counter. This young buck, who knew as much about cooking fish as I did, looked back at his boss, winked, and then held up a ridiculously large fish, saying that my mother-in-law would want to cook that one. I’m talking about a 50-pound fish that almost crushed him when he held it over his head! A brain-dead idiot could have seen that he was trying to take as much money as possible from me, just to impress his boss. I went back out to the car empty-handed, rather than spend our life savings on that fish. We all had a good laugh.

Unfortunately, that is the way that most brokerages -- real estate, mortgage and stock – are set up. There is a high turnover in the profession, and the person who greets you is incentivized to sell you the biggest, not the best, fish.

I tell my stories because parables are more fun than flow charts. The fact that these stories are true will, I hope, inspire others to believe that if I can do it, you can do it. I am really living the life of my dreams, and so can you. If a copper miner’s daughter can become the #1 stock picker in the U.S., you, too, can start investing in the life you adore, put your money where your heart is, trade with wisdom, and earn fantastic gains while you sleep.

Why do you place so much emphasis on the nest egg as opposed to the Stocks on Steroids?

No one should be daytrading their future. Juggling with your nest egg means that it could crack and splat. When you have your assets properly allocated within your nest egg, keeping a percent equal to your age in safer investments, like CDs, money markets and bonds, you can then take on higher risk with a smaller percentage, with the goal of achieving higher gains. So, have a nest egg, and then have a smaller, high performance account for your Stocks on Steroids. Also, do as much of your trading as possible in tax-protected individual retirement accounts. And remember, CASH was the top-performing asset class in 2000. Bonds were in 2002. Stocks were in 1999. Real estate had a fantastic run between 2002 and 2005, but has been softening in the last two years.

Why don’t you own all of the stocks that you feature in your ezine?

I am a journalist, not a money manager, which means that it is actually illegal for me to own all of the stocks that I feature. Journalism is built upon the foundation of fair and balanced reporting, and if I were just reporting on stocks that I owned, that is called front-loading. In other words, if I buy stocks, and then tell you about them, and then you buy them, pushing the share price up, I’d make a lot of money, but that isn’t a legal way to get rich. It is illegal to trade on information that is not publicly available, and if I know I’m doing a feature article that could push the price up then I’d be guilty of insider trading. I can own some of the companies I report on, but only if I purchase them after I report on the companies (or have owned them for awhile before I decide to do an article). Any trading I do always has to occur after my articles are made available to you, not before!

If I were a money manager -- and with the returns on the companies I’ve featured it would be relatively easy for me to get a job like that -- I would be helping rich people get richer and making a lot of income for myself. I have made a different choice, however. My choice was to add a splash of green to Wall Street and transform lives on Main Street by becoming the most trusted name in financial news. The income of a journalist is dismal compared to that of a hedge fund manager. But the lifestyle of doing exactly what you love is priceless, and in the long run of a lifetime, I’m confident that I’ll not only make more money with this approach -- by selling books and DVDs designed to help the average investor succeed -- but I’ll also be very happy with my contributions to your life and to society at large. Living the life you love is a fantastic reward, and I truly wake up every day happy to be alive and in charge of the career that I have made for myself.

Fast Facts:

• 50% of companies featured as Natalie’s Company of the Month between October 2006 and May 2007 have more than doubled. Avg. return = 85.2%, as of 10.31.07.
• 48% of the companies featured as Natalie’s Company of the Month between 2002 and 2005 -- 25 out of 52 companies – DOUBLED or more from the time they were first featured to the time they were taken off of Natalie’s Hot News on Cool Stocks list.
• The investment club that Natalie founded with a group of soccer moms doubled their investments between the time of the founding in January of 2002 and when Natalie cashed out in April of 2004.
• Natalie’s personal returns in 2001 were almost triple her investment – without shorting -- which is what lead many of her girlfriends to beg her to "teach us what you know."
• In 2000, Natalie avoided the advice of a stock broker to "diversify" her real estate gains into 4 mutual funds – an energy fund, anchored by Enron, a telecommunications fund, anchored by Global Crossing, an international fund, anchored by Japan, a technology fund anchored by AOL. Instead, she kept the money in CDs, in a year when cash was the top performing asset class, at 4%.

Testimonials
"I've had a staggering year (any given day to this point 80%-90% gains) based almost solely on her picks." Anonymous, Investment Consultant

"My husband and I spent our 30th anniversary at Natalie's Get Rich and EnRich Retreat, and it was the turning point in our lives. Ten years ago I was diagnosed with cancer, and we have been searching for a better life for ourselves ever since. But it was not until Natalie and the Living the Rich Life Retreat helped us focus on defining and attracting the life we really wanted - from all perspectives, including investing - that we really started moving forward. I've lost 30 pounds and am now doing work I love with incredible people, and my husband is becoming more successful with his investing." Nancy

"Natalie helped to reawaken my passions and dreams after the drab year I had following my accident. My goals are once again in sight." Erik

Are You Gambling With Your Nest Egg -- Without Even Knowing It?

by Natalie Pace.

Includes my Hot News on Cool Stocks list.

The Hot News lists below feature 44 companies earning great gains, versus just nine that are headed in the opposite direction. 48% of the companies featured in my stock newsletter between 2002 and 2005 -- 25 out of 52 companies -- DOUBLED from the time we listed them in our feature article to the time when I took the company off of the Hot News on Cool Stocks list, and the majority of the remaining 52% well outperformed the marketplace. (See the chart in the article, "25 of Our Companies Have Doubled," from volume 4, issue 4, the April 2007 ezine, for a listing of companies.)

Additionally, the market performance of the companies that are featured in my Hot News on Cool Stocks list has kept me at the top of over 830 A-list pundits on TipsTraders.com. I’ve repeatedly occupied the #1 position. TipsTraders.com listed me as a Highly Recommended Stock Picker, in 2006 and 2007.

Check out the performance of our featured companies over the last year! 5 out of 9 companies – over half – doubled or more.

Current Economic Conditions Commentary
(This report is a reprint of our December mid-month update, with updated statistics and data. Don’t overlook the new numbers or skim this update. The information is critical going forward!)

Ever wonder how O.J. Simpson can still play golf when he owes $33 million dollars to the Goldman Family? Because he knew how to cover his assets. This is an extreme example of how important it is to understand the most fundamental rules of investing. Even though you will never be involved in a scandal like O.J., covering your assets is just as effective in market downturns, lawsuits, job loss and the current pension restructuring that is going on in legacy corporations, such as we are seeing in the airlines and auto companies.

People lost their fortunes during the DOT COM bust. Speculators in real estate are losing their homes today. And I am telling you that the challenges in the United States economy today require your sober and serious attention NOW. If you are smart and prepared, you should be fine going into the next few years. If you lost money during the DOT COM bust and you did not take the time to understand how to avoid that in the future, you are just as vulnerable today as you were then. Needless to say, if you have no clue what you’re invested in and are just "trusting your broker" (who might have up to 500 other clients), you need to keep reading. Brokers can and should be well-versed in all of their company products, but few have a crystal ball or the time and experience to do high level investigative financial journalism on the companies their clients are interested in investing in. Steve Forbes has a different job from Charles Schwab.

Real estate, stocks, bonds, national debt, the value of the dollar, all of these wax and wane, but there are those who ride the tides for steady gains and those whose fortunes are sunk because their boat had leaks to begin with. So my question to you is, "Are you gambling on your investment future -- without even knowing it?"

I am writing in earnest about something so important that I need you to stop whatever you are doing and read this article now. I know you have heard phrases like this bantered about by other people, but when I utter them, I am dead serious. Look at my track record. Look at my performance. Look at my history. You know I know my business. You know my stock newsletter pays off in spades. You know I’m optimistic and bubbly and a fundamentally happy person.

When I turn serious on you, it is because there are conditions coming up that you need to be aware of. When I tell you that the odds are exceedingly high that you are gambling much if not most of your nest egg and investment activity, you should take it as a call to action. I do not put myself on the line and make claims idly. It may sound like a brash statement, but it is a true and provable one nonetheless. I began talking like this Christmas of 1999, just a few months before the DOT COM recession began. No one wanted to hear about it then either.

Here is a mental test. Do you have any idea how much of your nest egg is at risk and how much is safe from a downturn? Did your investments crash in 2001? Have you had difficulty getting rich on the software you purchased or the program you signed up for? Is your ARM about to break?

If you lost money in 2000 on Internet stocks or do not have a clue what holdings you have in your retirement plan now, or have a pattern of chasing money – coming to the real estate party or the Internet party late, buying high and then suffering losses -- whether you have $10,000 or $10 million invested in your account, you need to move heaven and earth to be at my retreat this January. Here is why. At the retreat, we will look at what is hot, what is not, and the danger zones that you need to avoid NOW before the real estate implosion starts to impact GDP growth (which will impact the stock market). We will carefully restructure your nest egg so that you are better protected against a downturn. You will learn sound, higher performing, less risky alternatives that could double or triple or redouble again the returns you could be enjoying. And you will learn which industry is poised to soar above the rest, no matter what the market conditions are.

Your current investment strategy is going to deliver a certain result for you over the next year, decade and your lifetime. If it is not properly allocated, you could actually lose money, instead of earning gains while you sleep. A better strategy could deliver as much as ten times the ultimate wealth creation, income and security. And it is not more money invested. It is simply getting more performance for the money that you work so hard to earn and invest.

I have put together a 4-day process that is extremely unique, powerful and result certain. On day one we are going to play the Billionaire Game. Once you start getting specific about how you will handle wealth on a daily basis, you can actually create the blueprint and step into that life. In the evening of the first day, I have two billionaire experts – one in real estate and one in financial services – who have handled deals valued at over a billion in aggregate. These experts will talk about how multi million dollar deals are handled.

On day two, we will take what we have discovered about what being rich means to you, and you will restructure your nest egg and investing habits to get you there. The evening will be crowned with a sermon that will strike lightning in your soul.

On day three, you will practice my easy 3-ingredient recipe for cooking up profits in your Stocks on Steroids portfolio and learn how to create stock report cards and great gains for yourself.

Now I have to stop for a minute and introduce the secret weapon that is going to make this work so well for you, not just in the moment, but now and forever in your everyday life. My keynote speaker is none other than Michael Bernard Beckwith. You probably know him from his appearances on Oprah and Larry King, from the blockbuster video The Secret and the fact that many of the celebrities, sports and business greats throughout the world turn to him for spiritual guidance and balance. Once you learn my strategies and hear the Rev strike lightning in your soul, you can address your investment future with maturity and confidence and without the fear and stomach acid that normally cost you so dearly.

By the time you leave that room on the fourth day, you will no longer be the same person. Even if you have been following my ezine to a T, I will teach you how to think how I think, so that you can have the same level of success in all of your investments, as well as in your daily life. I cannot promise you will make a billion dollars, but I can tell you that if you have enough capital in play and you invest with the foundation and strategies we will teach you, it is certainly possible. The one thing I will promise is that these four days will absolutely be the most enriching, the most important and the most valuable four days of your investment life, or I do not deserve to keep your modest registration fee.

Speaking of which, I am not charging the $5,000 or $10,000 that most investment training programs ask. I am not even charging half of that. I am creating a value-priced, valuable retreat where I can work deeply, intimately and personally with my most motivated, serious and ambitious subscribers. And the information you will receive and experiences and opportunities you will enjoy are quite simply not available anywhere else – not in universities, other seminars or even your brokerage.

If this resonates with you, sign up online now by clicking on the Get Rich and EnRich banner ad. I am holding a limited amount of rooms at a deliriously low rate for an oceanfront hotel. Mark your calendar right now and clear it for the dates January 2-5, 2007. The place is Los Angeles, California, Santa Monica to be exact, the Loews Hotel on the beach, to be even more specific.

You need this information as we go into 2008, especially given all of the economic pressures that we are facing. There is no downside to you attending my January retreat, outside of the travel and modest hotel. If I do not deliver more than I promised, you can ask for a refund. If I do deliver, your wealth will multiply dramatically and your life will change immediately and forever.

This is the first time EVER that I have had a world renowned keynote speaker at my 4-day intensive, highly limited, wealth building super summit. I do not have another retreat on the calendar because 2008 is devoted to the launch of my new book. You do not want to miss this unique opportunity. You may never get the chance again to experience Rev Michael, Dr. Rickie and I in such an intimate gathering.

REGISTER NOW using the following promo codes to receive almost $1000 off the regular price. Click on Register Now or go to NataliePace.com, click on the Get Rich and EnRich banner ad, and register online there.

PROMO CODES:
RetreatPeak ($1295 for one person)
RetreatPeak2 ($1880 for two people)

The promo codes are case sensitive.

This offer is valid now through December 31, 2007 only. Give yourself the gift of a new life this New Year. You deserve it!

Wisdom + the law of attraction = the rich life. It is that simple. It is that much fun. You’ll enjoy one of the most beautiful, warm beaches in the world! It was 80 degrees and sunny today in Santa Monica!

View of the famous Santa Monica Pier from the Loews Santa Monica Beach Hotel.

Poolside, overlooking the Pacific Ocean, at the Loews Santa Monica Beach Hotel.

Market Report:
The Federal Open Market Committee decided on September 18, 2007 to lower its target for the federal funds rate 50 basis points to 4-3/4 percent. The big, fat rate cut thrilled investors. The stock market immediately rallied on the news. For Halloween, the Feds decided to give investors some candy, with another 25 basis point reduction in the Fed Fund Rate. Investors fell in love with stocks and the markets soared on the news. Continued histrionic headlines and inflated statistics on the severity and pervasiveness of the subprime problems spooked investors in November, for the worst sell-off of the year. The Feds responded by cutting rates again in December. The rate currently stands at 4-1/4 percent.

General Stock Market Performance

FYI: we predicted Nasdaq to be the 2007 superstar performer earlier back in November of 2006. Click on Wow! Dow! Or Nasdaq Now! Article, from vol. 3, issue 11, to review that article.

The Bottom Line always is that getting rich is a matter of balance, strategy and patience. You should not be day-trading your nest egg. If you don’t know what the proper balance of real estate, stocks, bonds and Beanie Babies you should have in your investment portfolio, then your next investment should be in education.

The Writer’s Guild Strike Update
Formal negotiations from November 26 broke down. Strike continues.
You’ll see that I’ve made my choice to keep media on the Hot News List for now, though I continue to monitor the situation carefully (but not obsessively).

Peace and Prosperity,

Natalie Pace

EDUCATIONAL OPPORTUNITES AND INFORMATION:

1. Interest Rates: The Big, Fat Rate Cut Continues! The Feds knocked the rates down on the past 3 consecutive meetings, in September, October and December. The federal funds rate is currently at 4-1/4%. According to the Federal Open Market Committee’s press release, "Incoming information suggests that economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending… Recent developments, including the deterioration in financial market conditions, have increased the uncertainty surrounding the outlook for economic growth and inflation." (If you haven’t read my message above and taken it seriously, you should reread it and consider coming to my retreat in January 2008 where you will learn to protect your assets in case of a recession. Remember the pain of 2000-2002, and consider that you need more than a Bandaid this time around.)
   
   
2. FOMC Information: Interested in reading the press release of the December 11, 2007 FOMC meeting for yourself? You can. The official Federal Reserve document is available online. Click on FOMC, or go to FederalReserve.gov, to read!

The tentative FOMC meeting schedule for the 2007-2008 calendar is: January 29-30, 2008 (Tuesday-Wednesday), March 18, 2008 (Tuesday), April 29-30, 2008 (Tuesday-Wednesday), June 24-25, 2008 (Tuesday-Wednesday), August 5, 2008 (Tuesday), September 16, 2008 (Tuesday), October 28-29, 2008 (Tuesday-Wednesday), December 16, 2008 (Tuesday). The fact that the Federal Open Market Committee decided to increase the number of 2-day sessions from two to four in 2007 is an indicator of the concern in the economy at this juncture.

3. Calendar Section: Conferences, Online Chats and more: Check out the Calendar section of NataliePace.com regularly. There are many wonderful opportunities to chat one-on-one with millionaire money managers, economists, respected money gurus, real estate veterans and CEOs! Be sure to calendar the dates of the mid-month Hot News on Cool Stocks Update and the publication date of our special Company of the Year January 2008 ezine. Get more information on how to best use our articles in the FAQs article, located under the Investor Edu link on the home page of NataliePace.com.

Survey Results:
Check out our article on the Best Gifts for Guys and Women in this month’s ezine. Great holiday tips are to be found there.

Bottom Line: NataliePace.com is providing you with news and important information, but you need to consult your financial planner to determine your best strategy for using the information. Your investments and portfolio should take into account your age, your retirement goals, your risk tolerance and portfolio diversification. The stock portion of your portfolio is a higher risk classification, where you ideally seek to gain higher returns. As the NASD said in a recent investor alert, don’t bet the farm on the stock market.

NataliePace.com is NOT a brokerage and doesn’t operate or act like one. We are an online media service with a mission of providing the news and information you need to make better choices in business, investing and personal prosperity. Always consult a trusted financial professional before buying or selling any security.

The Hot News on Cool Stocks List
Full disclosure: I have listed the companies that I currently own under the column "NP OWNS?"

Hot Stocks List
Investors who "never pay retail," note that highlighted stocks are trading at their 52-week lows or near the price featured in NataliePace.com’s article. This may be a good buying opportunity. The companies that are listed below which are not highlighted may not be in a good buying range, but they appear to be poised to continue performing well (if you have already purchased them). There are never any guarantees in life, and all stocks are risk-based investments. Consult your certified financial planner before making any changes to your investment strategy.

Highlighted Companies (Hot List):
Citigroup (C)
Conergy (CEYHF)
Echelon (ELON)
Genentech (DNA)
Smith & Nephew (SNN)
UQM Technologies (UQM)
U.S. Gold (UXG)
WisdomTree (WSDT)
Yahoo (YHOO)
Zoltec (ZOLT)

Recent Additions:
Only those stocks that are highlighted above and below are trading at a price that we consider to be attractive.

American Superconductor, Energy Conversion Devices and Zoltec were added on December 3, 2007.

Recent Deletions:
Jet Blue was deleted on December 3, 2007 with negative performance.

Disney (+31%), National Health Investors (flat), News Corp. (+33%), Opsware (+690%), Siri (mixed) and Time Warner (flat performance) were all deleted on December 26, 2007. See below for details. (The details on each deleted company are listed below the Hot News list.)

Hot News on Cool Stocks List

Sony (NYSE: SNE) and Sunoco (NYSE: SUN) both had great runs for the list! LifeCell (NASDAQ: LIFC) posted over 180% gains before being moved to the Cooling Off list. Bioteq Environmental (TSE: BQE) had 144% gains. Rio Tinto was removed on 11.15.2006 with 145% gains. Las Vegas Sands was removed on January 5, 2007 with 139% gains, Agilent on 2.1.07 with flat performance, and RELM Wireless was taken off with 3% gains on 2.1.07. Blockbuster ran up 82.5% in gains, which we cashed in on February 12, 2007. Intuit, deleted in June 2007, was a wash for us – up and down. Macerich posted 150% gains between May 2003 (when it was first featured) and September 2007 (when it was removed from the list). Jet Blue was removed on December 5, 2007 with losses of 24-45%. Still love the airline as a consumer, but oil prices are killing the industry. Disney (+31%), National Health Investors (flat), News Corp. (+33%), Opsware (+690%), Siri (mixed) and Time Warner (flat performance) were all deleted on December 26, 2007.

Recently Deleted from the Hot News List on (12.26.07):

Stocks to Watch
Some of these are great companies that we’re thinking of adding to the Hot List and some are stinkers we’re thinking of adding to the Cooling Off List.  Read carefully to identify which is which!  

Recent Additions (added on 12.05.07):
Emcore
International Rectifier

Recent Deletions:
Advanced Micro Devices on 12.05.07

Cooling Off Stocks List (may be Poised for a Decline in Share Price).
Note: The companies listed in bold have recently been added to this cooling off list and/or may be currently poised for a decline in value. Investors who have them in their portfolio should read the recent news and consider whether it is time to sell and take profits, dump losses, short the position and/or simply weather the storms, while keeping the company in their long-term portfolio. At any rate, always consult your certified financial partner before making adjustments to your portfolio. (Again, note, that the stocks on this chart are expected to go DOWN in price.)

Highlighted Companies (Cooling Off List):
Wells Fargo

The following companies were taken off of the Cooling Off list effective 10.16.06: Verisign (+15%). IMClone (-11%). Yahoo (-28%). LifeCell was removed on 7.2.07 with -4.5% overall performance. (The cooling off list anticipates that a company will lose share price value.) Google was added on 7.16.07 and then removed on 8.1.07 with losses of -6.7%. General Motors was removed on 10.01.07 with mixed performance.

Please note: NataliePace.com does not act or operate like a broker. We are a publishing, media and information center. This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. The publicly traded companies mentioned in this article are not intended to be buy or sell recommendations. ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies.

IMPORTANT DISCLAIMER: Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

NataliePace.com Calendar:

Don’t Miss the Get Rich and EnRich Retreat featuring Natalie Pace, Michael Bernard Beckwith and Dr. Rickie Byars Beckwith on January 2-5, 2008. You must be it, in order to do it. Experience the rich life with us and change your life now and forever.

The NataliePace.com Calendar section features conferences, retreats, educational opportunities, cultural events, galas, market events and online chats with executives and VIPs. Stay plugged in! Visit our calendar section often.

See below for just a few of the amazing educational and networking opportunities that world-class organizations are offering for you. To access links to the event website and registration, go to the Calendar section at NataliePace.com.

Living the Rich Life Retreat, Santa Monica, CA Wednesday, January 2-5, 2008 Attend this 4-day beachfront retreat and create a new Living the Rich Life plan, learn Natalie's trade-marked 3-ingredient recipe for cooking up profits and attend Reverend Michael Bernard Beckwith's Agape Sanctuary! Email Heather@NataliePace.

Transformative, Inspiring New Year’s Evening with Michael Bernard Beckwith, Dr. Rickie Byars Beckwith and Natalie Pace. Admission: FREE!
Thursday, January 3, 2008
Martin Luther King, Jr. Auditorium, located at the Santa Monica Public Library (Main branch). 601 Santa Monica Boulevard, Santa Monica, CA 90401.
(310) 458-8600
Seating is first come, first served and limited to just 140. Evening begins with a meditation at 6:30 p.m. and ends at 9:00 p.m.

Mid-Month Update: Hot News on Cool Stocks
Monday, January 14th, 2008
The mid-month update of the hot news on cool stocks report will be published on or before 5:00 p.m. PT. Check online before noon, just in case we get it out early!

Wagner's Tristan und Isolde at the Los Angeles Opera
Saturday, January 19th, 2008
David Hockney designs. Bold and fanciful, eye dazzling, creating a "tone of antic freshness, of fairy-tale legend filtered through adult (and adulterous) fantasy, according to the NY Times.

5th WSF World Spirit Forum: Zurich, Switzerland
Sunday, January 20th, 2008
WSF hosts spiritual and religious and political and social activists to gather and develop a plan for a unified humanity with equity and solutions for global concerns.

FOMC Meeting
Tuesday, January 29-30, 2008
The Federal Reserve Board governors meet to determine whether inflation is more of a factor than the housing pullback and subprime defaults. Will the Feds keep the rate where it is, raise it or lower it?

Invent Your Future Conference, Silicon Valley, CA
Tuesday, February 26th, 2008
Top speakers Sam Horn, Peggy Klaus, Maggie Neale and Liz Fetter address key topics like risk-taking, advanced negotiations and strategy...plus, hone your decision-making skills in the Business Challenge and enjoy non-stop networking.

NOTICE: NataliePace.com is NOT a stock brokerage service, and does not operate or act as one.