“When your dream appears as an opportunity, you must have ready cash to take it home with you.”

- Anonymous

Welcome to Money-Smarts, MsMoney.com's weekly newsletter of financial facts, features, and tools. Money-Smarts is designed to provide quick and useful information to help secure your financial future. Enjoy, and tell a friend about MsMoney.com!

In This Week's Issue:

• Market Summary for Friday, January 12, 2001
• Tips for the Week: Daily Advice to Help Get You Through the Week
• Read the Latest: pH Balance and P/E Ratios
• Run the Numbers: How Much Does It Cost to Raise a Child?

Market Summary for Friday, January 12:

Close

Net Change

Percent Change

DJIA

10525.38

-84.17

-0.79%

NASDAQ

2626.50

-14.07

-0.53%

S&P 500

1318.55

-8.27

-0.62%

30-Year Bond

5.618%

----

N/A

Source: Reuters

Tips for the Week: Daily Advice to Help Get You Through the Week

Monday: Max out your 401(k) plan, if possible. 401(k)s are a great way to grow your retirement savings tax-deferred, and the benefits are even greater if your employer matches all or part of your contribution. Learn more about 401(k) plans.

Tuesday: Allocate the money you invest among various asset classes and holdings. A well-diversified portfolio helps offset temporary losses because the currently in favor performers will likely balance (or hopefully exceed) the out of favor investments. Learn more about asset allocation.

Wednesday: Don't be held back by past financial mistakes. Decide to live differently starting today--figure out what's most important to you, take charge of your financial life, and begin your new path to financial health and security. Learn more about how to get financially fit.

Thursday: A professional financial advisor can help you determine what portion of your portfolio should be in equities vs. other asset classes, how well you'll weather stock market downturns, and recommend specific investment strategies.

Friday: Considering buying a house or condo? First, you need to figure out how much house you can afford. Click here to run the numbers.

Read the Latest: pH Balance and P/E Ratios

By Kara Stefan

Remember those shampoo commercials that tried to convince you to buy the product because it was pH balanced? It sounded like a bunch of hoo-hah, but we bought it anyway because this technical explanation seemed to prove the shampoo was a better value.

Nowadays you hear a lot about P/E ratios when analysts recommend which stock to buy. Technically speaking, P/E stands for price/earnings, and it measures a company's future earnings prospects. The ratio is determined by dividing the stock price by its earnings per share; the higher the ratio, the higher the earnings expectations. Of course, that might sound like even more hoo-hah.

In plain English, a P/E ratio is like pH balance. Yes, there's some measure of technical validity behind it, but it's basically just a way to evaluate a stock in the same way you look for value in any product you buy. More-->

Run the Numbers: How Much Does It Cost to Raise a Child?

Click here to calculate the total expenses included in raising a child from groceries and daycare to family vacations.

Questions

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