Jerome Kerviel, The Most Indebted Person In The World, Owes $6.3 Billion To Former Employer, Societe Generale

The Huffington Post


In a hyper-competitive world where everyone strives to be the biggest, boldest and most famous, no one covets Jerome Kerviel record-breaking achievement.

He is the most indebted person in the world.

Thanks to a court ruling in late October, the former junior trader for France's second largest bank, Societe Generale, owes the company a cool $6.3 billion -- an amount so gargantuan it couldn't possibly be repaid.

But considering an appeals court upheld the sentence after Kerviel was accused of orchestrating $73 billion in what the Atlantic politely refers to as "unauthorized trades," it's difficult to maintain a grounded sense of proportion.

Jean Veil, one of the lawyers representing Societe Generale, told the Guardian the bank would take a "realistic" approach to recovering the $6.3 billion from Kerviel, whose sentence also includes three years in prison.

One of Kerviel's lawyers, Olivier Metzner, previously explained to CNN he believes his client has been scapegoated for the financial crimes. He also asserted that the bank knew of Kerviel's actions but turned a blind eye because, though risky, they'd been profitable.

"The banks are the ones to blame for the banking system and the systematic economic crisis, not Jerome Kerviel," he told the station.

According to the Associated Press, the 35-year-old Kerviel never personally profited from any of the trades.

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Wall Street jumps on strong consumer and jobs data

By Caroline Valetkevitch

NEW YORK (Reuters) - The S&P 500 scored its best day in seven weeks on Thursday as bullish consumer confidence and private-sector jobs data gave investors reason to cheer following superstorm Sandy's devastating sweep through the U.S. Northeast.

Technology and materials sector shares led the advance in a day of mostly average volume. About 6.7 billion shares changed hands on the New York Stock Exchange, Nasdaq and NYSE MKT, compared with the average daily closing volume of 6.5 billion for the year to date. The S&P 500 technology index (.GSPT) rose 1.8 percent, while the PHLX semiconductor index (.SOX) surged 3.3 percent. The S&P materials index (.GSPM) shot up 2 percent.

Volume had been expected to jump after Sandy forced a historic two-day weather-related market closure earlier in the week but traders said participation remained light to normal.

Data from payrolls processor ADP showed U.S. companies added 158,000 workers in October - the fastest pace in eight months. In another encouraging sign, U.S. consumer confidence jumped in October to its highest in more than four years, the Conference Board said.

The numbers showed a slightly more positive picture of the U.S. economy a day ahead of Friday's nonfarm payrolls report, the most widely watched U.S. economic indicator.

"In all, it bodes well for the bull side, and finally gave some investors a catalyst to buy," said Alan Lancz, president of Alan B. Lancz & Associates, an investment advisory firm in Toledo, Ohio.

"Tomorrow will be more of a trump card and can take it all away."

Employers are expected to have added 125,000 jobs to payrolls in October, up from 114,000 in September, according to a Reuters survey of economists. The unemployment rate is forecast to have inched up to 7.9 percent after a dramatic drop of 0.3 percentage point in September.

Pfizer Inc (PFE), which delayed the release of its quarterly results because of the storm, posted revenue that fell far short of expectations, pushing its stock down 1.3 percent to $24.55.

Shares of Exxon Mobil Corp (XOM), which like Pfizer is a Dow component, gained 0.5 percent to $91.60 after the world's largest publicly traded oil company reported a quarterly profit that slipped from a year ago, although it still topped expectations. Exxon's oil and gas output, however, declined more than expected.

Northeast residents and workers were still recovering from the aftermath of Sandy, which killed scores of people in North America and the Caribbean, and wreaked havoc up and down the U.S. eastern seaboard.

The Dow Jones industrial average (^DJI) gained 136.16 points, or 1.04 percent, to 13,232.62 at the close. The Standard & Poor's 500 Index (^GSPC) shot up 15.43 points, or 1.09 percent, to finish at 1,427.59. This was the S&P 500's biggest daily percentage gain since September 13, when the Federal Reserve unveiled its plan for a third round of stimulus or quantitative easing, also known as "QE3."

The Nasdaq Composite Index (^IXIC) jumped 42.83 points, or 1.44 percent, to close at 3,020.06.

After the bell, shares of Starbucks (SBUX.O) rose 6.2 percent to $49.50 after it reported a higher quarterly profit and raised its full-year forecast. The stock closed the day at $46.62.

During the regular session, official and private-sector factory surveys in China that showed the world's second-biggest economy regaining some traction added to support for stocks.

Shares of JDA Software Group (JDAS), a maker of supply-chain management software, soared 17.3 percent to $44.76 after the company agreed to be bought by privately held rival RedPrairie Corp for about $1.9 billion in cash.

Advancers outnumbered decliners on the New York Stock Exchange by a ratio of slightly more than 3 to 1, while on the Nasdaq, about two stocks rose for every one that fell.

(Additional reporting by Rodrigo Campos; Editing by Jan Paschal)

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Sandy's death toll climbs; millions without power

NEW YORK (AP) — Millions of people from Maine to the Carolinas waited wearily for the power to come back on Tuesday, and New Yorkers found themselves all but cut off from the modern world as the U.S. death toll from Superstorm Sandy climbed to 40, many of the victims killed by falling trees.

The extent of the damage in New Jersey, where the storm roared ashore Monday night with hurricane-force winds of 80 mph, began coming into focus: homes knocked off their foundations, boardwalks wrecked and amusement pier rides cast into the sea.

"We are in the midst of urban search and rescue. Our teams are moving as fast as they can," Gov. Chris Christie said. "The devastation on the Jersey Shore is some of the worst we've ever seen. The cost of the storm is incalculable at this point."

As the storm steamed inland, still delivering punishing wind and rain, more than 8.2 million people across the East were without power. Airlines canceled more than 15,000 flights around the world, and it could be days before the mess is untangled and passengers can get where they're going.

The storm also disrupted the presidential campaign with just a week to go before Election Day.

President Barack Obama canceled a third straight day of campaigning, scratching events scheduled for Wednesday in swing state Ohio. Republican Mitt Romney resumed his campaign, but with plans to turn a political rally in Ohio into a "storm relief event."

Sandy will end up causing about $20 billion in property damage and $10 billion to $30 billion more in lost business, making it one of the costliest natural disasters on record in the U.S., according to IHS Global Insight, a forecasting firm.

Lower Manhattan, which includes Wall Street, was among the hardest-hit areas after the storm sent a nearly 14-foot surge of seawater, a record, coursing over its seawalls and highways.

Water cascaded into the gaping, unfinished construction pit at the World Trade Center, and the New York Stock Exchange was closed for a second day, the first time that has happened because of weather since the Blizzard of 1888. The NYSE said it will reopen on Wednesday.

A huge fire destroyed as many as 100 houses in a flooded beachfront neighborhood in Queens on Tuesday, forcing firefighters to undertake daring rescues. Three people were injured.

New York University's Tisch Hospital evacuated 200 patients after its backup generator failed. About 20 babies from the neonatal intensive care unit were carried down staircases and were given battery-powered respirators.

A construction crane that collapsed in the high winds on Monday still dangled precariously 74 floors above the streets of midtown Manhattan, and hundreds of people were evacuated as a precaution. And on Staten Island, a tanker ship wound up beached on the shore.

Some bridges into New York reopened, but some tunnels were closed, as were schools, Broadway theaters and the metropolitan area's three main airports, LaGuardia, Kennedy and Newark.

With water standing in two major commuter tunnels and seven subway tunnels under the East River, Mayor Michael Bloomberg said it was unclear when the nation's largest transit system would be rolling again. It shut down Sunday night ahead of the storm.

Joseph Lhota, chairman of the Metropolitan Transportation Authority, said the damage was the worst in the 108-year history of the New York subway.

Similarly, Consolidated Edison said it could take at least a week to restore electricity to the last of the nearly 800,000 customers in and around New York City who lost power.

Millions of more fortunate New Yorkers surveyed the damage as dawn broke, their city brought to an extraordinary standstill.

Info from Yahoo.com

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NYSE and Nasdaq closed as Hurricane Sandy hits

NEW YORK (CNNMoney) -- U.S. stock exchanges were closed Monday as Hurricane Sandy bore down on New York.

The New York Stock Exchange (NYX) said in a statement late Sunday that it would close its markets Monday. Markets are likely to remain closed on Tuesday as well.

The Nasdaq stock market, which trades many technology stocks, including Google and Microsoft, also closed down Monday. The exchange will later announce plans for Tuesday.

"Dangerous conditions developing as a result of Hurricane Sandy will make it extremely difficult to ensure the safety of our people and communities, and safety must be our first priority," the NYSE said in a statement.

New York has declared a state of emergency and the city suspended subway service, bus and commuter rail service, which started at 7 p.m. ET Sunday. (Look ahead to stocks: Key jobs report)

The NYSE originally planned on staying open for electronic trading, while closing its trading floor, but later said all operations would close after consultations with regulators and other exchanges.

Related: Black Monday: 25 years after the crash

NYSE rarely shuts down for weather-related emergencies: Hurricane Gloria in 1985, and a snowstorm in 1969 were the last major weather events to bring the exchange to a halt.

Monday marks the first unscheduled market-wide shutdown since September 2001, when markets were closed for four full trading days following the Sept. 11 attacks on the World Trade Center.

The last market-wide shutdown was on January 2, 2007, in accordance with the country's national day of morning in memory of President Gerald Ford, who had died a week earlier.

In other markets, CME Group halted floor trading since its Nymex trading floor is in New York City's mandatory evacuation zone. The CME closed and settled all stock-related futures and options at 9:15 a.m. ET, with U.S. stock futures declining between 0.4% and 0.6%.

All other electronic futures and option markets, including energy and metal, will remain open.

CBOE Holdings Inc, the world's largest options exchange, also closed trading Monday and said it would make a further announcement if closures are determined for additional days.

The weather forecast prompted the U.S. Treasury to revise its schedule of debt sales for the week, moving Tuesday's 4-week bill auction to Monday from Tuesday.

The bond market will remain open Monday. The Securities Industry and Financial Markets Association is recommending an early close of noon ET and a full day close on Tuesday, but the ultimate decision is left up to the firms that trade bonds, including Treasuries, mortgage-backed securities, corporate bonds, and municipal bonds.

Currency trading activity typically follows the fixed income markets.

Even though Federal government offices were closed, the Commerce Department released its monthly report on personal income and spending on schedule Monday morning. Spending rose 0.8% in September, above expectations, while income inched up 0.4%, right in line with forecasts.

Meanwhile, some companies with offices in the flood zone in lower Manhattan, like American Express, have closed their New York offices on Monday.

Goldman Sachs will be open for business Monday, though most of its New York employees will work from home due to its offices' proximity to the evacuation zone and transit suspensions, according to a memo to staff obtained by CNNMoney and confirmed by a spokesman.

The firm will rely on its teams in London and around the world for support. The memo said that employees "deemed critical to the operation of the firm," however, will be asked to go into its lower Manhattan offices Monday, but stressed that safety remains a top priority.

Pfizer, which had been scheduled to issue its quarterly financial report on Tuesday, said that it would reschedule for Thursday morning. Meanwhile, power companies Energy and NRG Energy said they were delaying their third-quarter conference calls because of the storm.

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Android Tablets Gain on iPad

Daily Finance.

Tablets using the Android operating system from Google Inc. (NASDAQ: GOOG) have grabbed 41% of the market on shipments of 25 million units during the third quarter of 2012. The iPad from Apple Inc. (NASDAQ: AAPL)continues to lead with a 57% share in the quarter, but that's down from a 64% share in the third quarter of 2011.

The data comes from Strategy Analytics' latest report on the global tablet operating system market share. The research firm's executive director noted:

No single Android vendor comes close to Apple in volume terms at the moment, but the collective weight of dozens of hardware partners, such as Asus, Samsung, and Nook, is helping Google's Android platform to register a growing presence in tablets.

Yesterday's earnings miss by Apple has been attributed to lower-than-expected sales of the iPad. The company shipped 14 million units in the quarter, but some projections had called for up to 17 million units. Now that the mini is here (and sold out already), then either manufacturing issues could reduce iPad and iPad mini sales or customers lining up to buy the cheaper minis may cause another slip in iPad sales.

And the iPad mini's entry-level price is $329, far above the $200 for a comparable tablet from Amazon.com Inc. (NASDAQ: AMZN), Google or Samsung. That has got to have an impact on shipments, but we will not know until next year how big an impact.

Paul Ausick

Filed under: 24/7 Wall St. Wire, Consumer Electronics, PC Companies, Technology Companies Tagged: AAPL, AMZN, featured, GOOG

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Planning for Trouble: Money and Estate Tips for Every Age

Planning for death, disability, or other personal tragedies is the last thing you may want to think about. Yet notplanning for those contingencies can leave families dealing with highly tense issues at times when they're least able to handle the additional stress.

Many people put off doing estate planning on the grounds that it's too complicated. But it's not that difficult, and the right moves can save both you and your family a lot of trouble down the road.

Here are things to keep in mind for various stages in life.





On Your Own

Even if you're single and don't have any dependents, some basic planning will still make your parents' lives easier if something happens to you. Giving them -- or some other trusted person -- power of attorney for your health care means someone will be able to make decisions about your medical care if you're ever unable to do so. Similarly, setting up bank accounts and other assets either as joint accounts or with chosen beneficiaries to receive your property after your death could help your loved ones avoid a costly probate proceeding.

Coupling Up

Once you're part of a couple, you'll want to consider changes to recognize your significant other. If you're married, then certain legal protections are automatic, although formalizing them with appropriate documents is still smart. If you're not married, though, drafting wills or trusts, as well as financial and health-care powers of attorney to help others take care of your affairs if you're incapacitated, are musts.

Parenthood

Regardless of whether you're part of a couple or a single parent, updating your planning documents to reflect your offspring is vital. Some states automatically give a child a piece of your estate after you die, so it's always worth checking to make sure nothing surprising will happen under your state's laws.

Two things are most important, though. First, you'll want to change your will to name a guardian for your child in case you die. Second, in order to avoid court supervision of your child's assets if something happens to you, putting in provisions for a trust to receive the child's inheritance from your estate ensures that someone of your choice will take responsibility for managing inherited assets on the child's behalf.

Parenthood, the Sequel

If you later have more children, all the same issues apply, but the big new question you have to answer is how you want to treat them. Many families prefer to treat all their children equally. But in some cases, such as when one child has special needs, such an arrangement doesn't really make sense.

State law typically puts all children on an equal footing in estate-planning documents, so you'll want to be explicit about any special provisions you may make for one child over another. Whether you use a simple strategy like setting up a separate account with additional funds for a particular child or set up a specialized trust to reflect your wishes, the right documents can minimize unnecessary squabbles later.

When Your Kids Are Grown

Once your children reach adulthood, they're legally able to hold assets in their own names. But some parents prefer not to leave lump-sum inheritances for their kids, instead setting up trusts to pay out certain amounts at various ages or for specific purposes. Such trusts serve two main purposes: They keep your kids from spending too much too quickly, and they can help protect assets from potential claims if your child goes through a divorce.

Having Grandchildren

If your kids have children of their own, it introduces a new set of opportunities and pitfalls from the standpoint of family dynamics. You may want to provide for your grandkids, but you also don't want to step on your children's toes in their parental role.

From tax-free educational gifts to outright bequests, there are plenty of ways you can provide for grandkids. However you choose to set things up, the key is communicating openly with your family to make sure they understand what you're doing and can give feedback. In the end, the decision is yours, but by taking their thoughts into account, you can do your best to come up with a solution that works for everyone.

AOL.com

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Bank of America sued for alleged mortgage fraud

NEW YORK (CNNMoney) -- The Justice Department is seeking $1 billion from Bank of America, alleging the bank committed fraud by selling defective mortgages from a program it says was known within the bank as "the Hustle."
Those mortgages were purchased by government-backed mortgage finance firms Fannie Mae and Freddie Mac, resulting in over $1 billion in losses for taxpayers and countless foreclosures, according to the complaint announced Wednesday by the U.S. Attorney for the Southern District of New York.


The suit alleges that "the Hustle" was a nickname for the bank's "High-Speed Swim Lane," or HSSL program, designed to streamline the mortgage origination process. But the government alleges it was "intentionally designed to process loans at high speed and without quality checkpoints, and generated thousands of fraudulent and otherwise defective residential mortgage loans."
The government says the program was started by mortgage lender Countrywide Financial, but continued after it was purchased by Bank of America in 2008. It ran through 2009, according to the suit.
"For the sixth time in less than 18 months, this office has been compelled to sue a major U.S. bank for reckless mortgage practices in the lead-up to the financial crisis," said U.S. Attorney Preet Bharara in a statement. "The fraudulent conduct alleged in today's complaint was spectacularly brazen in scope."

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Samsung Galaxy S III Gets Carbon Footprint Certification In Europe

Samsung’s Galaxy S III is a popular device among consumers, but it’s now well respected among the conservationist types across Europe. Just like its predecessor and the Galaxy Note, the Galaxy S III has achieved a carbon footprint certification across Europe.

Samsung UK announced today that they are the only mobile phone manufacturer to be granted the carbon footprint certification by the UK-based Carbon Trust Certification. The Galaxy S III achieved its lower carbon footprint by implementing a more efficient charger, using fewer raw materials, and reducing emissions during its assembly.

“At Samsung, our philosophy is to ‘design for humans’ and be ‘inspired by nature’. So by design our products are not just smart and easy to use, they also strive to achieve the highest environmental standards,” said Bill Skeates, Head of Sustainability, Samsung Electronics Europe. “Yes, our customers want to own a great smartphone, but they also want to be responsible consumers, and the Galaxy S III helps them to do both. Measuring the carbon footprint helps us to understand the environmental impact of our mobile phones and identify where we can continue to improve. Samsung aims to calculate the carbon footprint for all of its mobile flagship devices.”

Samsung began their journey into eco-friendly manufacturing in 2009 with the Green Management Strategy. Since then, the company has developed “innovative solutions for environmentally friendly products.” As such, the company “reviews the production, usage, and end-of-life disposal of its handsets.”

“The number of mobile devices, like smartphones in use worldwide is growing exponentially, so it’s important that they meet key environmental standards. We are very pleased that Samsung is showing industry leadership here,” said Darran Messem, Managing Director, Certification at the Carbon Trust. “Samsung not only submits its smartphones for independent assessment, but is also taking action to improve the environmental performance of its products.”

Samsung is expected to announce a new 10-inch tablet alongside Google at an Android event next week. The same eco-friendly manufacturing practices will surely be used in the creation of said device. It could be used as a good company image boost for both Samsung and Google.

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How to invest in Gold - 1st. Part

Whenever you buy gold, the first rule of thumb is dollar cost averaging -- putting a fixed amount of money towards gold every month regardless of the price. For the average investor, this strategy spreads risk out over time and lessens the downside.

Most money managers advocate anywhere from 3%-10% in gold. More bullish managers recommend an allocation as high as 20%.

Gold is protection, insurance against inflation, currency debasement, and global uncertainty. Here are four ways you can invest.

Gold Bullion

Buy physical gold at various prices: coins, bars and jewelry. Some of the most popular gold coins are American Buffalo, American Eagle and St. Gauden's. You can store gold in bank safety deposit boxes or in your home. You can also buy and sell gold at your local jewelers. Other companies like Kitco.com allow you to store gold with them as well as trade the metal.

When you buy gold coins or bullion, avoid big premiums. You want to buy gold as close to the spot price as possible, or a 10% premium at most. The higher the premium, the higher the gold price will have to rise in order for you to profit.

Coins typically come from the national mint, where they are made and sold at a 4% mark up -- the retailer's margin is 1% to 3%.

To calculate the premium of a gold product, subtract the spot price from the price you are being quoted, divide that number by the spot price and multiply by 100.

Had you purchased a one ounce gold bar at Kitco.com for $1,225.90 -- using a spot price of $1,200 -- the bar has a 2.1% mark-up. This means that the gold price only has to rise 2.1% from spot price levels for you to break even on your investment.

Premiums, though, can mount as high as 75% or more based on the gold item.

To avoid getting ripped off you must establish why you want to buy gold bullion. If you want to own gold as a long term investment, then buy gold as close to the spot price as possible.

If you want to own gold to use as money, if you are a "survivalist" you want to buy a tank of gas with gold as Jon Nadler, senior analyst at Kitco.com says, then you need smaller gold coins like one tenth an ounce and will have to pay the premium.

Nadler's take is that an individual investor shouldn't spend more than a 10% mark up when buying gold, but acknowledges that "everyone has their own threshold."

Where investors also tend to go astray is by buying semi-numismatic or numismatic coins, otherwise known as rare coins, which come with huge premiums that seldom recoup their value.

A good rule of thumb is to leave rare coin buying to rare coin dealers. Nadler advises that consumers interested in rare coins go professional auctioneers like Bowers & Merena or Christie's who have experts on staff and can objectively grade the coins the same way an antique dealer would appraise goods.

If a broker tries to sell you a story with the coin like it's from the "old world and there are only a few thousand in existence" experts advise to go elsewhere.

"Don't confuse investing in gold with the things being sold as gold investments," cautions Nadler. "You want something that tracks the price of gold as close to dollar to dollar as possible."

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Where to invest the best way your money?

The financial markets and the economy are entering new territory, creating new risks and opportunities for investors.

America's slow recovery is gaining momentum, unemployment is declining and there are even signs that inflation will start to pick up. And while it will be years before before consumers and the federal government fully repair their broken balance sheets, housing prices recover and the majority of the unemployed get back to work, for the first time since 2007, the financial landscape is no longer defined primarily in terms of the crisis. The economy is moving forward.

As all economic transitions do, this moment of change is creating new possibilities in the financial markets. As the landscape shifts again, it's important that investors understand where these opportunities are and where they can put their money. Here are 11 areas experts think you should consider right now:

1. Commodities

As the global economic recovery accelerates, fears of deflation have been replaced with concerns about inflation. The prices of commodities and raw materials such as gold, oil and agricultural products have been rising for some time, but businesses have largely been unable to pass those higher costs along to consumers. That may change. While few experts believe inflation is likely to be a major problem, it can't be ignored.

"We are not big inflation bears right now, but that is not the point," says Seth Masters, chief investment officer for blend and defined contribution strategies at asset manager AllianceBernstein. "Even if there's only a 10% or 20% chance that inflation becomes serious, that is a big problem for investors. It will be bad for stocks and very bad for bonds, so it makes sense to have some protection against inflation, even if that is not the central case," he warns.

Real assets such as commodities can provide protection in an inflationary environment, says Kristi Mitchem, a senior managing director at asset manager State Street Global Advisers.

Rather than looking for the next hot commodity, invest in a broad range of commodities by tapping a mutual fund or an exchange-traded fund. "Investors should be well-diversified in commodities," says Mitchem.

Allocation toward real assets will vary depending upon the age and risk tolerance of the investor, but Mitchem says something in the 10% to 15% range is probably suitable for a broad range of people. 

2. REITs
Certain kinds of real estate investment trusts can provide a hedge against inflation as well, according to Masters. REITs that comprise 15-year leases may provide no protection at all. "But a hotel REIT that is based on room rates that can be adjusted as the market demands may be very sensitive to inflation, although that is not always the case," Masters says.

3. Inflation-Protected Bonds
Inflation eats away at the value of traditional fixed-income securities, because the dollars you earn in interest aren't worth as much as they were when you made the investment. Over the years, financial institutions have created a number of products that shield credit from the ravages of inflation. TIPS, or Treasury Inflation-Protected Securities, are one way to go about this. TIPS offer a fixed interest rate, but the amount of principal fluctuates, as does the actual amount of interest the investor collects. At maturity, TIPS should be worth at least as much as they were when they were purchased.

Investors can also purchase I-bonds, a form of savings bond in which the interest rate, not the principal, fluctuates over time. Step-up bonds, in which the interest rate rises every year, can be found in the corporate and government agency credit markets.

4. Australian Dollars

The U.S. Treasury market was a huge beneficiary of the global flight to quality during the financial crisis. Soaring demand drove down interest rates and funded the stimulus that helped bring America out of recession. But now, the Treasury market is saturated with supply -- just look at the record $1.65 trillion 2011 deficit it's funding -- and demand as falling as the global economy recovers.

There are alternatives to U.S. Treasurys, though. "One way to hedge it is with the Australian dollar," says Steve Persky, managing partner of Dalton Investments, a $1.1 billion hedge fund based in Los Angeles. Australia came through the financial crisis without falling victim to the credit pressures faced by the U.S. and much of Europe. Its debt-to-GDP ratio was an estimated 22% last year, compared to 59% for the U.S. Furthermore, its proximity to China and the other Asian growth markets is expected to help the country boost its GDP by 4.25% this year.

5. Municipal BondsGiven the level of alarm about the municipal bond market, investors might wonder if putting money into this sector is akin to buying subprime mortgages in 2007. Yet most issuers in the municipal bond market will repay their obligations without any problem.

Muni bonds yields -- say, 4% for 10 year bonds -- are attractive, especially considering their tax-free status. The question is how to protect yourself from weaker issuers. John Taft, the CEO of RBC U.S. Wealth Management (RBC), says he prefers general obligation bonds and revenue-backed bonds that are linked to essential services such as water and sewer service, not special projects. Some experts suggest that larger issuers with higher ratings tend to be safer, but Taft believes that independent research by an investor or analyst before buying is key.

6. Large-Cap Stocks

In the midst of the financial crisis, investors fled the equity markets and credit prices soared. As the first signs of the recovery took hold, investors began moving back into stocks. The Standard & Poor's 500 is now at 1,330 -- up nearly 100% from early 2009.

Yet there's still opportunity in stocks, even if a market correction occurs. "Large-cap stocks are relatively undervalued," Taft says. The S&P 500 index of large companies is up 24% over the last 52 weeks, while the S&P SmallCap 600 index is up 35% over the same period of time.

7. Dividend Stocks
Research shows that dividend-paying stocks tend to beat the long market. According to that theory, it's always a good time to invest in them. Wharton finance professor Jeremy Siegel researched the S&P 500 from 1957 through 2009 and found that the top 100 dividend stocks had an annualized return of 12.5% over the entire period, while the 100 companies with the lowest dividend yields returned 8.8%.

"Dividends are issued by quality companies that have a history of cash on their balance sheets -- and they are often large-cap companies, which are currently undervalued," Taft says.

8. Health Care and Consumer Staples
Investors who cycle out of the broad market in springtime and shift into defensive stocks such as health care and consumer staples tend to beat the market, according to Sam Stovall, chief investment officer of S&P Equity Research Services.

The S&P 500 has returned about 6.1% a year since 1995. But if this simple rotation -- undertaken in April and lasting for six months -- is employed, investors' returns are boosted to 9.7%, according to Stovall. He says the results are even more pronounced among smaller companies. The spring defensive rotation boosts the return to 12.5%, compared to 9.7% for the broad market of smaller companies.

What accounts for this seeming mystery? Stovall says the broader market tends to perform better during the end of the year and late winter, thanks to the availability of bonus money, tax returns and other forms of liquidity. The rotation provides a defense against a traditional seasonal downturn for equities.

9. Stocks with Low Debt-to-Equity Ratios
If inflation picks up -- as many experts believe it will -- "investors may want to take a look at companies with low debt-to-equity ratios," Stovall says. As the cost of debt capital rises, companies with cleaner balance sheets will have less exposure. The debt-to-equity ratio for the broad market is 51%, but several industries have much lower ratios, including tech, with a ratio of 28%. "Tech companies tend to become self-funding because their median profit margins are high, at 15.4% compared to 9.2% for the broad market," Stovall says.

Other sectors with low debt to equity ratios include energy, with a ratio of 39%, and industrials, with a ratio of 46%.

10. Oversold Stocks

For the technically minded investor, some standards measures suggest when stocks are under- or oversold. The relative strength indicator (RSI), for example, tracks stocks' performance over the last 14 days and ranks them on a scale of 0 to 100. Scores below 30 suggest that a company may be oversold.

Stovall said that as of Feb. 15, investors might want to consider these stocks with RSI's under 30: Celgene (CELG), CVS Caremark (CVS), Dreamworks Animation (DWA), Family Dollar Stores (FDO) -- now the target of a $7.6 billion takeover bid by investor Nelson Peltz -- and Peoples United Financial (PBCT).

11. Cash

Finally, most experts say its wise to keep a certain amount of your assets in cash. "There is nothing wrong with keeping 10% or 15% in cash," Taft says. "Warren Buffett always said to wait for the home-run pitch. That is how you make money."

Information from www.dailyfinance.com

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