The Four Pillars of Investing Part 8

This is a multi part series dedicated to the review of  William Bernstein's book The Four Pillars of Investing.
Numbered Page references are from the hardcover edition.


Chapter 14 Getting started, keeping going
Make the switch to your new portfolio the same day. Once you have arrived at the allocation the next step is portfolio rebalancing.

Starting out and avoiding fees use the dollar cost averaging approach. One better than that though is the value averaging approach described by Michael Edleson. Same target investment amount each month, but in the account. If the account is down, pour it on. If the account is up, pour on less. Technically, you could reach your yearly goal of contributions sooner than the year, or a bit longer. It is suggested that this not be done with ETF’s because of the additional transaction fees would be too great. Two to three years for funding is good because a market correction should occur giving you maximum benefit. The benefit is the experience of investing regularly even during times of pessimism and fear – a very useful skill indeed.

Play the long game. You get more return if you portfolio rebalance once every few years. Reduce risk by diversifying. The psychological conditioning of being a financial contrarian is just what you need to retire rich. You must sell when it is all the rave and buy when all are crying doom. That is how you win in poker, and how you win in the long game of investing. When the chips are down, it will not bother you too much to toss a few more coins into the pot when everyone around you is folding his hand.  Again be wary of tax consequences if doing this in a taxable account. Tax sheltered could rebalance more often, but it is not suggested more than 2-3 years because sometimes it takes that long for a trend to run its course. Remember the five years on the five asset classes.

Two advantages of the small investor. When confronted with a downturn, a smaller portion of the portfolio is exposed and therefore you will be less worried.  Rebalancing in retirement is just the opposite of when your portfolio is growing due to your savings. You just withdraw from the sectors that have grown too large, again selling when they are high.

Again, if in need of help. Hire only a fee based advisor.

The Four Pillars of Investing Part 7

This is a multi part series dedicated to the review of  William Bernstein's book The Four Pillars of Investing.
Numbered Page references are from the hardcover edition.

Chapter 13 – Defining your mix
Analogy to building a house to protect you – the same for your investments – protection, not wild speculation.
Bricks - Total US Stock Market – Wilshire 5000, S&P 500, Russell 3000. This can be further split into the four corners, large and small, growth and value. Small funds are less suitable for taxable accounts due to turnover and cap gains. In addition to the four corners, also add in REITs.
Timbers - Next consider total international funds.  Can be also split into Emerging Markets, Europe, Japan, Pacific Rim, and the UK.
Shingles – Bonds – keep them short term. Longer term carries too much risk for diminishing returns. Included are government securities, corporate bonds, municipal bonds. Keep these in taxable accounts for they are already tax advantaged, and can double as your emergency fund as they are easily accessible.
Keep track of tax efficiency. REITs and junk bonds should be tax sheltered because they pay returns in the form of dividends.

Taxable Ted – Lump Sum – No tax shelter –
Stocks 40% Total US Stock Management;20% Tax Managed Small Cap; 25% Tax Managed International;15% REITs inside a Variable Annuity.
Bonds – 25% to each; Treasury ladder; Short term Corporate; Limited Term tax exempt; California Intermediate term tax exempt.
Recall the pilot simulation that crashes versus real life actions. Have you ever lost 25% of your portfolio value?

Sheltered Sam – all Pension
20% S&P 500; 25% Value Index; 5% Small Cap; 15% Small Cap Value; 10% REIT; 3% Precious Metals; 5% European; 5%Pacific; 5%Emerging; 7% International Value;
Bonds – 60%Short Term Corporate; 40%TIPS;

Young Yvonne – 12% S&P 500; 15% Value; 3% Small Cap; 9% Small Cap Value; 6% REIT;1.8% Precious Metals; 3% Europe; 3% Pacific; 3% Emerging; 4.2% International Value; 40% Bonds/Cash
To start, she should put $0-$5000 towards S&P 500, then $5000-$10,000 add International Fund, 3. $10k-15k add REIT, then 4. $15k-20k add Small Cap and so on. This means in the second $5k added, only $1500 goes to total international fund. The other $3500 is split between the S&P 500 and money market. And by the time $15k is added only $1000 will be put into REIT, thus conserving her targeted ratio while growing the portfolio and avoiding low balance fees adding funds after each $5k contributed.

Teach your children well, please. He suggests when they are ten that they get an account and each quarter a lesson. This way they can view the effects of the market going up AND going down. Then they will be competent investors.

Your portfolio will vary based on what makes you feel good and your tolerance for tracking error – the difference in your portfolio and that of a major index like the S&P 500. Do not own too much, or sometimes even too much of the same sector, as your job. Remember the poor Enron employees.

The Four Pillars of Investing Part 6

This is a multi part series dedicated to the review of  William Bernstein's book The Four Pillars of Investing.
Numbered Page references are from the hardcover edition.

Value = Bad Companies = higher risk = higher return
Small or Emerging Markets = higher risk = higher return

Chapter 11 – The press isn’t very helpful either
Financial journalists do not have financial degrees – they just write for their jobs. Those that know the truth are few and it is boring to advocate dull index funds. Do not listen to the media, instead focus on the history books. With that are some book recommendations.
•    A Random Walk Down Wall Street, by Burton Malkiel
•    Common Sense on Mutual Funds, by John Bogle

*************************
My own thoughts here. The book thrives on the idea that the more history that you learn, the better off that you will be. This book is filled with stories of the past to illustrate its points. Sometimes it can be a bit much if you are already sold on the idea. The last half of the book looks to be the part that many people actually pick it up: Putting it all together. Everyone just wants the end game result and forgets that much can be learned from the journey.


Chapter 12 – Will you have enough?
There is little difference in calculating the money you will need for retirement if you live for 35 years or forever. Best case scenario is Roth IRA, pulling 4% annually from your funds earning 4% real returns. No taxes, constant returns. For $40,000 you need $1 million. Reverse amortization to die with nothing left over after 35 years = $746,585.

Best case scenario yet presented is pages 231-234 and the plots showing sample asset allocations with varying degrees of stocks and bonds and different withdrawal rates.  Starting at the beginning of a bear market in 1966, only the funds pulling out 4% survived with cash to the end from an initial balance of $1 million. (Fidelity’s my plan works these numbers nicely, as does Ing’s What’s my number?)
Moral of the story. Save lots of money and start early. These are the mantras of investing for retirement.
A note on making sure before you start that you have an emergency fund (following Dave Ramsey’s steps) before you begin. Do not invest with money you need in five years into stocks. College savings in a 429 are suggested to be heavy on the bond side since the term is intermediate and stocks can have a bout of bad years. 

The Four Pillars of Investing Part 5

This is a multi part series dedicated to the review of  William Bernstein's book The Four Pillars of Investing.
Numbered Page references are from the hardcover edition.

Value = Bad Companies = higher risk = higher return
Small or Emerging Markets = higher risk = higher return

Pillar Four – The Business of Investing
Legs of the industry: Brokerages, Mutual Funds, Press. Each has the goal to transfer your wealth to their own pockets.

Chapter 9 – Your broker is not your buddy
Brokers need trades to make money. They do not require a higher education or regulations. They have no fiduciary responsibility to their clients. Fiduciary means to put the client’s best interests first. Doctors, lawyers, bankers and accountants have it – stockbrokers do not.

The betrayal of Charlie Merrill story. He tried to restore public confidence in Wall Street and took away commissions from his brokers. It didn’t last forever. Fees are easy to hide and are very high. They also collect on the spread between the bid and ask prices. Your broker is there to sell you a product and he is compensated on his sales and care not for your overall return. Do not engage a full-service brokerage. Instead, get a fee based advisor.

Chapter 10 – Neither is your Mutual Fund
Load funds charge you a sales charge on the way in or on the way out. The sales fee is a loss to your overall return and does not guarantee a better fund performance. Story of Fidelity’s Select Technology fund positive performance, sudden bloat in assets after advertising , and subsequent years of loss. Investment firm or marketing firm? Advertising, creating products to sell, raising fees.

The 401(k) briar patch is suggested to be the next big government bailout because now there is a nation of ill-advised employees contributing to their retirement and may not realize even the average market return. Employers focus on the services provided by the fund company – the record keeping and forget the cost to the employees. Most plans do not have an index fund. Suggestion? Request a change or quit and roll it over to your own IRA.

Story of Jack Bogle fulfilling Merrill’s dream through the creation of the true mutual fund service company that is owned by the fund which is owned by the shareholders. The idea is to keep costs low. Examples include other mutual companies. (PMT is one) He also started index funds.  If your 401(k) does not offer index – go with T. Rowe Price, Dodge & Cox, and Bridgeway. ETF’s are new but also good.

Lending Club Helps to Pay Your Holiday Bills Offer

I just received this $100 offer in my inbox this morning from Lending Club. This promotion is good for existing members and new members and is targeted at signing up more borrowers. The promotion is marketed towardds helping you pay off all of your holiday bills that you so recently racked up. However, you can get a loan for whatever your needs may be - balance transfers, pay off high interest balances, home improvement, etc. All you need to do is apply for a loan through your borrower account. If you are already an investor you just create a new account as a borrower. Here is the fine print.

*To qualify for the one time $100 payment, your issued loan must be between $12,000 and $25,000. You will receive your $100 payment within 30 days after your loan is issued. Offer available only to borrower members who apply for a loan after Monday January 11,2010.

 I hope to have a link here in the future pointing towards a more detailed review of Lending Club and Peer to Peer investing overall.

The Four Pillars of Investing Part 4

This is a multi part series dedicated to the review of  William Bernstein's book The Four Pillars of Investing.
Numbered Page references are from the hardcover edition.

Value = Bad Companies = higher risk = higher return
Small or Emerging Markets = higher risk = higher return





Pillar Three - The Psychology of Investing

Chapter 7 and Chapter 8 – Our Behaviors and how to combat them.
Richard Thaler and friend were contemplating driving across Rochester, New York, in a blinding snowstorm to see a basketball game. They wisely elected not to. His companion remarked, “But if we had bought the tickets already, we’d go.” To which Thaler replied, “True – and interesting.” Interesting because according to economic theory, whether or not the tickets have already been  purchased should not influence the decision to brave a snowstorm to see a ball game.
It is like throwing good money after bad.  Richard Thaler helped found the field of Behavioral Finance. Is there any other kind?
The problem with investing is yourself and these bad traits.
•    Human beings are very social. So be ready to invest as the contrarian.
•    We are too overconfident that we could beat paid experts in the field, and money managers who routinely do not outperform the market. You are trading with/against the money managers. You cannot time the market. The news and hype has already been priced in.  So tell yourself regularly that the market is smarter than you and there are plenty others better equipped than you. Obtain market average - Just do it cheaper and more efficiently.
•    The next major error is using the immediate past as an indicator to future returns.  The best asset classes for five years tend to be the worst performers in the following five years and vice versa.  So recognize this and forget the last ten years of performance.
•    Why don’t we index – it is boring. Gambling is more fun. And we like to brag about who and what we invest in and with. The exciting funds are probably at the top ready to go down. So be dull and index.
•    Focusing on the wrong risk. Worrying too much about the short term than the long term. Myopic risk aversion.  So check on your portfolio less often – think of your house and how you hold onto it without knowing how the price might be swinging. And/Or hold lots of cash and take advantage of short term drops in prices.
•    Finding the next Wal-Mart. Great company/Great stock fallacy. Better to stick with slow and steady growing than trying to bet on an explosive, advertised stock which will fall out of favor soon enough anyways. So be dull and index.
•    There are no patterns. The markets are random. Look long enough and find a historical pattern, but it does not work applying it forward. So be dull and index.
•    Poor accounting. Calculate your return on investment and do not bury your failures or they tear down overall performance, and the overall return is all that matters. And don’t be a “whale” feeding your money to your managers through fees and expenses.

The Four Pillars of Investing Part 3

This is a multi part series dedicated to the review of  William Bernstein's book The Four Pillars of Investing.
Numbered Page references are from the hardcover edition.

Value = Bad Companies = higher risk = higher return
Small or Emerging Markets = higher risk = higher return

Pillar Two - The History of Investing
Chapter 5
George Santayana - "Progress, far from consisting in change, depends on retentiveness. Those who cannot remember the past are condemned to repeat it."
Larry Swedroe - "There is nothing new-only the history you have not read."

A chapter all about booms and busts.
Technological progress drives economic progress. Technological advancements come in spurts.
Stephen Ambrose, "Undaunted Courage", "A critical fact in the world of 1801 was that nothing moved faster than the speed of a horse. No human being, no manufactured item, no bushel of wheat, no side of beef, no letter, no information, no idea, order of instruction of an kind moved faster. Nothing had moved any faster, and, as far as Jefferson's contemporaries were able to tell, nothing ever would."

The revolution of communication was also dramatic. Important news could be instantaneous. Today just allows for more trivial information to be communicated instantly. :)
Four ingredients to produce a bubble.
•    A major techological revolution or shift in financial practice.
•    Liquidity - i.e. easy credit
•    Amnesia for the last bubble - or one per generation.
•    Abandonment of time-honored methods of security valuation, usually caused by the takeover of the makret by inexperienced investors.

1720-The South Sea Bubble and the Mississippi Company
Canal building - more often than not, the users of the technology prosper more than the inventors. Industry fared better from the advent of canals than the companies which built them.
England railroads bubble
Sonics and tronics and then the Nifty Fifty bubbles
The Dot Com tech sector bubble
and now the housing credit bubble

Chapter 6
The bottoms that follow the euphoria. The depressed, but great buying opportunity times.
1979 Business Week - Death of the Equities article
Best rewards come after a devastating bear market.
Busts follow the same four ingredients.
A generalized loss in the faith of the new technologies to cure the the system's ills is usually the triggering factor. Followed by a contraction of liquidity. Amnesia for the recoveries, and cheap stocks only excite the analytical minds.

What follows is a lot of political intervention and new regulations to string up a scapegoat. Luckily, most have been in favor of the shareholder.
How to handle the panic? Stand pat. Stay the course. Ideally, when prices fall - increase your position by maybe 5% after a drop of 25% so as to avoid running out of cash before the real bottom.

Alphonse Karr, Plus ca change, plus c'est la meme chose; The more things change the more they stay the same.

The Four Pillars of Investing Part 2

This is a multi part series dedicated to the review of  William Bernstein's book The Four Pillars of Investing.
Numbered Page references are from the hardcover edition.

Value = Bad Companies = higher risk = higher return
Small or Emerging Markets = higher risk = higher return

Chapter 4
(pg 107)
Let's summarize the practical lessons from the first three chapters:
•    Risk and reward are inextricably intertwined. If you desire high returns, you will have to purchase risky assets - namely, stocks.
•    You are not capable of beating the market. But do not feel bad, because no one else can, either.
•    Similarly, no one-not you, not anyone else-can time the market. As Keynes said, it is the duty of shareholders to periodically suffer loss without complaint.
•    Owning a small number of stocks is dangerous. This is a particularly foolish risk to take, since, on average you are not compensated for it.
pg(108)
In other words, since you cannot successfully time the market or select individual stocks, asset allocation should be the major focus of your investment strategy, because ti is the only factor affecting your investment risk and return that you can control.

Word to the wise. If you cannot handle the down years-then you should find a reputable financial advisor. Otherwise, the emotional response will ruin your investments.


The remainder of the chapter focuses on asset allocation. For most investors the target should be a 50/50 mix of stocks/bonds. The more risk you can handle, or the more bear markets you can weather, the higher the stock allocation. The suggested maximum is 75% stock.  As you near retirement age the % towards bonds increases because naturally your risk decreases accordingly. Additionally, the bonds should be short term instruments, and remember inflation.

Step two is to diversify abroad. Why? It spreads out the risk. This portion only affects the stock portion of the allocation. Again risk and return are the guidelines, but the suggested limits are a 15% min and 40% max of your stock holdings. Regardless, stick with it through thick and thin.

Step three is size and value. large cap and small cap, value. generally putting more to the larger side with balance in value and growth, the small cap should be more weighted to value.

Step four is sectors. REIT, precious metals are the two recommendations. Everything else is covered in the S&P 500.

Conservative example includes 35% US Total Market; 10% foreign; 5% REITs; 50% short term bonds
Middle ground example includes 25% US total market; 10% US large value;10% US small value; 5% REITs; 10% foreign; 40% short term bonds
Riskier example includes 10% S&P; 10% US large value; 5% US small; 7.5% US small value; 7.5% REITs; 2.5% precious metals; 10% European;7.5% Japan and Asia; 7.5% Emerging markets; 7.5% International value; 25% short term bonds;

The Four Pillars of Investing Part 1

This is a multi part series dedicated to the review of  William Bernstein's book The Four Pillars of Investing.
Numbered Page references are from the hardcover edition.

Value = Bad Companies = higher risk = higher return
Small or Emerging Markets = higher risk = higher return

Pillar One - The Theory of Investing
Chapter 1 (the history chapter)
(pg 12)
The point of this whole historical exercise is to establish the most important concept in finance, that risk and reward are inextricably intertwined.
The low prices that produce high future returns are not possible without catastrophe and risk.
Chapter 2
(pg 44)
But if you can understand the chapter's central point-that the value of a stock or a bond is simply the present value of its future income stream-then you will have a better grasp of the investment process than most professionals.

Then comes a lot of equations of market value and discounting future value to present value. 
An annuity: You can capitalize(that is, discount) its payments by a low rate – say 6%. If your payments are $30,000 a year, this is the same as owning a long bond with a value of $30,000/0.06 = $500,000. If you are older, or it is riskier, use a higher rate, making the value significantly less.

Chapter 3 is all about how actively managed funds cannot and do not beat the market, and therefore, neither can the average joe investor. Total Stock Market indexing is the the key. Sector or selective stock picking increases risk and reward. Better performance overall with an index on the market - slow and steady and earn the boring market return.

The Ultimate Hitchhiker's Guide To The Galaxy

I just finished reading "The Ultimate Hitchhikers Guide to the Galaxy." I was a bit stunned by the ending.  But I think that most of that stems from the fact that the last half of the book reading was a bit disjointed for me.  The first half was smooth and continuous and read in a short amount of time - similar to any book I am enjoying, I devote a lot of time towards it and it is easy to become immersed in the story. 

However, my regular reading times were being interrupted and I was being distracted into doing other things. Such that when I picked up the book again it took a few minutes to re-acquaint myself with the story line.  Sometimes I was even forced to backtrack a few pages to clue me back in on what in the world, or galaxy was going on at the moment. 

Ultimately, pondering this made me wonder if this is why some people struggle with reading altogether anyways.  Unless you have a regular reading schedule, or read through a story in short order - it can be very difficult to follow and even to enjoy.  I found that my infrequent reading spells near the end also included much, much less of outbursts of laughter. Whereas, in the beginning, I was constantly laughing out loud and drawing attention to myself. 

Some of that may have been that the first few novels were a bit more entertaining, but I think it was compounded by the fact of infrequency and not following or remembering why the characters were in places as they were.  Extending this idea to mainstream public and I can think of a few good examples.  Scriptures.  Not a lot of people have really read them cover to cover. But if you draw out the process for ever and are infrequent in your reading, I can easily see how the story loses interest and distractions come or are chosen more often. However, when you are immersed in the story, it is easy to forgo anything and just allow yourself to be carried along for a few hours as you turn page after page.

Before college I was an avid reader and enjoyed spending time on the couch in a different world and completely ignoring my own world and the chores I was supposed to be doing. College ended all of that and my reading time was entirely focused on my engineering textbooks.  I was afraid, I think, to crack open a book because I wasn't sure I had the discipline or the time.  I always dreamed of the days after college when I could begin consuming the literary world once more with a renewed passion finally free of the restraints, self-imposed I will admit to some degree.

However, life after college has proven to be more difficult in renewing that passion than I had anticipated. True, I work full-time and sometimes part-time and I also have a long honey-do list and a wife and baby and a new house. However, I am also starting to think that a part of my difficulty in my renewal comes because I simply have fell out of habit and practice. I still have a long list of books that I would like to read and others that I would like to re-read from my youth. 

Returning finally to the origins of this entry - I thoroughly enjoyed reading "The Ultimate Hitchhiker's Guide to the Galaxy." It was an incredible journey and so much fun and humor. I always laughed when Marvin the depressed robot was around. I actually saw this movie a few years ago. The movie did a good job.  The ending left me wanting though. I didn't feel quite right about it, a bit unresolved and not entirely all explained properly.  I fear some of that is due to my choppy reading at the end, too.

I finally understood so many of the jokes and different things that my good friends and other engineers would say in reference to the book. It made me smile and laugh some more. I could see why it is an engineer's favorite and loved to contemplate the mysteries of the universe and the travel and the technology.  If only I could have known of this book sooner.  This has definitely been a great birthday present.

Internet Scams

Buying and selling a home can be a stressful event. Whether you decide to do it yourself or if you team up with a real estate broker. One way to do it yourself is to use Zillow.com. It is similar to the MLS but open and almost free. You can browse listed homes for free, you can even post your home and a "Make me move" price for free. Just this last week though, they started charging to actually list your home as "For Sale."

I used to have a listing on Zillow and was surprised by the number of Realtors that called me up wanting to list on the MLS with them. I had more activity from Realtors trying to get my business than I did of potential home buyers. However, I did have one interested buyer that I thought was just too good to pass up. I will post our email conversation below. The first message was sent through Zillow to me.

From Zillow:

RAPHAEL TUFOUR (raphael_tufour@yahoo..com) is contacting you about your home. Here is the message:
------
HELLO I AM INTERESTED IN BUYING THIS PROPERTY OUTRIGHTLY. COULD YOU PLEASE EMAIL ME TO CONFIRM IF IT IS STILL AVAILABLE IN THE MARKET FOR SALE. REGARDS, RAPHAEL TUFOUR
------
Please be aware that once you respond to RAPHAEL TUFOUR (raphael_tufour@yahoo.com), your e-mail address will no longer be anonymous to them.

Thanks for using Zillow.

Usually, I would have just junked this email right off. The indicators - all caps, misspellings, 'outrightly'.
But just for fun, I decided to use a secondary email account and respond.

Raphael,
This home is still available. What is your offer?

The next day he responded.

Sir,

I don`t believe in offer and counter offer. Just let me know the net/bottom price and if it is ok by me we proceed. 

Thanks

Raphael Tufour

I replied with the following in kind and mimicking his salutation.

Sir,
Compiling data from many sources I was able to come up with an asking price of $250,000.
Let me know what you think.
Thanks.

Of course the funny part was this was way more than what I had listed as my asking price. He must have liked the price, or that I was communicating because he went back on his word and countered my offer for a price that was still higher than my listed asking price, and he also went back to all caps again.

WHAT ABOUT $220,00 SIR?

Confused, I wrote back.

I thought that you said that you "do not believe in offer and counter offer."
What is wrong with $250,000? Are you trying to cheat me?

Now he was confused.

Cheat you in what way sir? How do we proceed?? What is the requirements???

Thanks,

Raphael

What 'are' the requirements. Well, I only require you to be honest in your dealings. Let's see if he can do that.

Well, if you would like to proceed with the purchase price of $250,000 then I will contact my realtor and we can begin work on getting all the paperwork in order that is necessary to complete the sale.

 He must have thought that that was okay.

I would like us to proceed.

Raphael

Turn about's fair play. Let's see what he thinks of me requesting information from him.

To begin, I will need some basic information to prepare the forms.

What is your contact information?
Where do you live?
What is your primary purpose for making this purchase?
What will be your form of payment?

We may also request a current pre-approval letter from a reputable lender.
We may also request a copy of your credit report.

Thanks.

He responded quickly - but not with information. Rather with excuses.

Thanks for your email.
I will provide the requested information necessary to prepare the forms, but please let it be noted that i am a civil servant/government official whose account is highly monitored and regulated in line with civil service bureau for code of conduct for public servants.

In line with the above and as soon as we get things fixed,my handler may be coming with the funds cash in consignment for the invesment matters as the funds may not need to go through the usual banking system until the funds arrives at your end.

Let me know what you think about this.

Thanks
Raphael Tufour

And the truth comes out. He cannot deal honestly with others. I shot back a short reply.

I will tell you what I think about this. You failed to respond to my questions.

I never received another email in reply. It was kind of funny for a while. But sobering to think about how many people still get ripped off from shady internet scammers offering a deal that is too good to be true.
Do you have a story about Internet Scams or phishing emails?  Comment below and let us know.

GPS Buying Guide

Magellan Maestro 4700

I finally purchased my Christmas present last night! I scored my gift via an Amazon Gold Box deal of the day! My parents gave us some money for Christmas and we had decided that with our upcoming move that a GPS for our car would provide useful help and lots of help navigating the East coast and all of its treasures. But which one should we get?  What GPS do you have?

We knew that, for us, we could probably find one that would do the job for near $100 or be extravagant for $200. We had a mental limit in mind of not crossing the $150 mark.

The blessing and curse of internet shopping is understanding your purchase better and the competing options. The curse is that you can very easily become mired down in the information and suffer from analyis paralysis. Making a decision is often better than not making any decision at all.

I compared the Garmin, TomTom, and Magellan brands. I used Amazon and BestBuy for most of my research. I found a very useful Magellan Comparison Chart via BestBuy. Via Amazon, you can browse nearly any Garmin Nuvi and find a section called, "Which nüvi is Best for You?" right below the Product Description and What's in the Box. I found this comparison chart very helpful in narrowing down the models I was interested in. Stylistically, the TomTom and Garmin are very different. Their approach to marketing and their user base is different although the GPS is still a GPS.

Last night's purchase was not a purely impulsive buy. We decided more than a month ago that we wanted one, and applying the 30-day rule, we found that we still wanted one. I knew last night that I wanted the Magellan brand, however, I was not as familiar model on sale as I would have liked.

When you have narrowed down your field of interest it is in your best interest to still be aware of the higher end, more expensive models so that you can spot a great deal when they go on sale. This is a fine line to walk because you have to be careful not to let yourself be overcome by feature creep.

Overall, we are excited with our purchase and we are glad that we used the 30-day rule to be sure that we really wanted a GPS. We are also happy that we could find a better model than we were expecting to purchase because of the daily deal sale price. I hope that when it arrives I can give a positive review and share some of our traveling experiences later this year.

Have you ever purchased something, or not purchased something, when it was on sale, but before your 30 days were up? Please share your dilema below.