Investment Tip – How to Invest


Historical inflation, using data from http://o...

Image via Wikipedia


Investing Tip of the Month from Morningstar Investment Research Center

How to Invest in a Deflationary Environment

By Christine Benz, Director of Personal Finance

Question: I’ve been reading a lot about deflation recently and am worried. Will any investments hold up well in a deflationary environment?

Answer: Although inflation grabbed all the headlines less than a year ago, it’s downright tame right now. Instead, some market participants are concerned that we could confront a period of declining prices as the government’s stimulus package winds down, particularly if unemployment stays high and the housing market stays in the doldrums. Some investors, such as DoubleLine’s Jeffrey Gundlach, have argued in the past that deflation could be a near-term problem, followed by high inflation rates down the line.

Why It Hurts
At first blush, declining prices for stuff may not sound that bad, particularly for consumers who might be able to take advantage of lower prices for everything from groceries to LCD televisions. But a persistent need to slash prices can be bad for businesses and could ultimately lead to layoffs, reduced consumer spending, and declining prices for a broad swath of assets, from real estate to commodities. Those forces, in turn, could put pressure on corporate profits and stock prices.

Inflation is a force to be reckoned with, too. But it’s deflation that really makes economists shudder.

What You Can Do
As regular readers know, I’m not a big fan of going overboard in anticipation of one specific economic scenario or another. For such a bet to pan out, you’d need to get your arms around myriad difficult-to-predict factors, including growth rates not just in the United States but overseas, as well.

If you’re truly concerned about deflation, you can take comfort in knowing that the investments that will tend to perform best in a declining-price environment are probably already in your portfolio. The classic deflation hedge is a simple fixed-rate investment–cash or government-issued bonds. (Corporate bonds will tend to be more vulnerable in a deflationary period because charging lower prices will tend to cut into the profitability–and viability–of many companies.) Because their payouts are fixed, the dough you receive via income from such vehicles is effectively worth more and more each year as prices fall. For the same reason, fixed annuities are also attractive in such an environment.

And while bonds will typically hold up better than stocks in a period of declining prices, the same “bird in the hand” logic means that dividend-paying stocks should hold up better than non-dividend-payers in a period of declining prices.

Go Easy
Although these investments are mainstays for investor portfolios regardless of the economic environment, it’s a mistake to go full-throttle into deflation-protection mode. That’s because the to-avoid/downplay list for deflationary times is a pretty long one, encompassing equally important investments such as most stocks, corporate bonds, commodities, real estate, and inflation-protected bonds.

And over the long haul, it’s also worth noting that inflation has been a bigger issue in the U.S. than has deflation. So hedging your portfolio against the former threat, particularly if you’re retired and relying on fixed-rate investments for much of your day-to-day income, is a better bet than getting too fancy about defending your portfolio against deflation.

Finally, bear in mind that the usual prescription for a deflationary period–government bonds and cash–isn’t currently offering much in the way of yield today. Cash investors are lucky to earn 1% on their money, whereas investors in intermediate- or long-term government bonds would be grateful to pick up 3% or 4%. Those yields would shrivel to next to nothing if inflation were to pick up. For all those reasons, positioning your portfolio for deflation alone is much more risky than it might seem.

A version of this article appeared on on Sept. 14, 2010.

Have You Tried BrainFuse?

Mathematics homework

Image via Wikipedia

What is Brainfuse?  It is a FREE online homework help center where real teachers help you understand your homework and how to do problems.  All you need is a library card and your PIN.

Just look at what students had to say about Brainfuse who used it in September 2010.

This helps me figure out some of the steps in solving a problem and it sometimes confirms that I am doing the problem correctly. Once I get confirmation, then I am able to move on the other problems. Thanks!!!
Thank you for all your help please don’t take it alway 🙂 8) =)
We are so glad you offer this service! Thank you!
Thank you for your patience today
I really like this site they help me understand what my home work is really about i would sertanlly recomend this to all of my friends
Thanks so much for the help! I really understand it now.
i’m not sure if it’s a real person helping me or a robot computer. It scares me but it’s so awesome and really fun to talk to a person!!!
kentj was the nicest tutor he helped through the steps and made sure i took my time to not make mistakes
the tutors have really great attitudes and they know what they are doing
arthurh helped me so much. I understand the concepts better and feel confident about my work. He was a GREAT help!
This was very helpful even for my first time
Never take this out i love it

If you have not yet given Brainfuse a try you are missing out!  Check out our full report for BrainFuse September Report usage to see the subject areas and number of students using Brainfuse.


This program is funded in part by the Nevada State Library and Archives and the Institute of Museum and Library Services, the primary source of federal support for the nation’s 122,000 libraries and 17,500 museums.  The Institute’s mission is to create strong libraries and museums that connect people to information and ideas.

Understanding Election Results


United States Presidential Election 2008.

Image via Wikipedia


Grade level K–5


Students will learn about the Electoral College while understanding the numerical basis for election results and practicing various computations.

National curriculum standard(s)

Principles and Standards for School Mathematics

• Data Analysis and Probability Standard: Instructional programs from prekindergarten through grade 12 should enable all students to formulate questions that can be addressed with data and collect, organize, and display relevant data to answer them.

o [Grade 3–5]: All students should design investigations to address a question and consider how data-collection methods affect the nature of the data set.

• Number and Operations Standard: Instructional programs from prekindergarten through grade 12 should enable all students to compute fluently and make reasonable estimates.

o [Grade 3–5]: All students should develop and use strategies to estimate the results of whole-number computations and to judge the reasonableness of such results

• Connections Standard [Grade 3–5]: instructional programs from prekindergarten through grade 12 should enable all students to recognize and apply mathematics in contexts outside of mathematics.

Developed by the National Council of Teachers of Mathematics

Time requirement

Preparation: 40 minutes

In-class: 2 hours, two different days; less, if some is done as homework.


CultureGrams States Edition


1.     Begin by handing out a printout of the PDF outline map of the U.S. to each student, along with coloring utensils. Give the students a list of which states voted for George W. Bush (color red) in the 2004 presidential election and which states voted for John Kerry (color blue) and have them color in the map accordingly.

2.     When the students are done, tell them that the country was split fairly evenly in this election, with 51% of the nation voting for Bush and 48% voting for Kerry. Yet, from looking at the amount of red on the election map, they might think that far more people voted for Bush. Talk about how the Electoral College works, explaining that each state gets a number of electoral votes based on its total number of senators and representatives, the latter of which is based on population.

3.     Using this formula (senators + representatives = electoral votes), have the students use the information in the Government section of the CultureGrams States Edition to fill in their map with the numbers of electoral votes each state has. Compare the sum of the blue states’ electoral votes and those of the red states. Are they closer than the map makes them appear?

4.     Explain to students that, typically, it is thought that states that are home to large urban populations (and are therefore more densely populated) tend to be democrat, while those home to rural populations (and therefore more sparsely populated) tend to be republican. Have students test this assumption using the Create-Your-Own-Table function in the States Edition. Have students create tables that display the population densities (population per sq. mi.) for both red and blue states. Using this data, have them create and compare averages for each group. What do their findings prove?

Questions for further discussion

1.     Why might more densely populated states vote democratic, while more sparsely populated ones vote republican?

2.     The Electoral College has come under fire as being out of date and unfair. Do the students agree? Why or why not?

39 40

Extension activity

Provide electoral maps for several past presidential elections. As they compare the maps, they should note which states should be classified as “swing states”; that is, which states alternate between voting for republican and democratic candidates. Then, have the students make a chart that visually displays red, blue, and swing states. The students bring their charts to class and compare them. If there are any differences, allow students to defend their classifications.

New Titles Added to Literature Criticism Online

Scan of drawing from Poetry and Songs of Irela...

Image via Wikipedia

The following titles have been added to Literature Criticism Online

Drama Criticism Vol 040

Nineteenth-Century Literature Criticism Vol 230

Poetry Criticism Vol 107

Short Story Criticism Vol 141

Twentieth-Century Literary Criticism V

Halloween Legends

A Halloween pumpkin.

Image via Wikipedia

Did you ever wonder why Americans carve pumpkins for Halloween? About 2,000 years ago, an Irish legend developed about a ghost who was forced to wander the earth while holding a lantern. To scare him away, the Irish carved turnips and potatoes and put candles inside them at night. When the Irish brought this tradition to America, they started carving pumpkins instead!

According to the Irish legend, what was the name of the ghost who roamed the earth?

Find the answer and learn more about this legend : Parks, Wynn. “The Head of the Dead: Celtic Origins of the Jack-o’-Lantern.” World & I. Nov. 1994: 270-279. SIRS Renaissance. Web. 27 Sep 2010.