As some of you may have noticed by now, we're getting old. The Motley Fool embarks on a new decade this month, and today our co-founders David and Tom Gardner offer up a hearty thanks to Fools the world over who have been with us through our first 10 years.
In today's Motley Fool Take:
- Mortgage Rates Rising
- Retailers Fight Back
- Quote of Note
- College Savings Smackdown
- Homestore Remodels
- Discussion Board of the Day
- Quick Takes
- And Finally
Mortgage Rates Rising
Retailers Fight Back
June was dismally slow for retailers, but today's same-store sales results indicate that shoppers returned during the month of July. On the whole, comps came in stronger than had been anticipated, leading some retailers to raise their quarterly earnings guidance.
July is traditionally a discounting month, with retailers clearing out summer merchandise to make way for fall goods. As such, it's not usually an important month for gauging retailers' health. Today's results are encouraging, though, in that they turned around June's poor showing and created hope that consumers' demand will carry over into the crucial August and September back-to-school months.
Discount powerhouse Wal-Mart
Even among the beleaguered department store group, same-store sales came in ahead of expectations. Sears'
Specialty retailers joined the July party, too. Teen surf shop Pacific Sunwear
Abercrombie & Fitch
All eyes will now be on the upcoming back-to-school season to see if retailers can sustain July's momentum.
Quote of Note
"An investor only has to do a small number of things right and avoid making major mistakes to be outstandingly successful." -- Warren Buffett
College Savings Smackdown
If college savings accounts were the The Brady Bunch girls, the Coverdell Education Savings Account would be Jan, and she'd be whining, "529, 529, 529!" instead of "Marcia, Marcia, Marcia!"
She'd have a point. State-sponsored 529 savings plans get all the attention. While much of it's warranted, the Coverdell ESA doesn't look too shabby either. It allows for the same tax-free growth on investments earmarked for higher-education expenses, and then some. So let's square the two off (the 529 and Coverdell, not Marcia and Jan) for a College Savings Smackdown.
In this corner, the 529 savings plan
- Contribution limits are huge -- well over $100,000 per beneficiary in most cases. This dwarfs the $2,000 annual contribution limit for Coverdell beneficiaries.
- Many states offer perks to residents who participate in the local plan. The most common benefit is the deductibility of contributions on state income tax returns.
- The assets in a 529 plan are considered the property of the donor, usually a parent or other relative. This has two benefits: 1) The student won't gain control of the money and spend it on a new car, and 2) the money will have a gentler effect on financial aid eligibility since colleges expect students to contribute a larger portion of their assets to the tuition bill than is expected of parents.
The challenger: Coverdell
- The Coverdell is a tax-free account until the government changes its mind. However, the tax-free status of 529 plans will automatically revert to tax-deferred (i.e., no taxes will be paid until money is withdrawn) in 2011 unless Congress acts.
- The money in a Coverdell can also be used for qualified elementary and secondary education expenses, including computers and uniforms.
- The Coverdell offers much more investment flexibility. Just open an account with a discount broker and choose just about any stock, bond, or mutual fund you want. Participants in a 529 savings plan are limited to the mutual fund-type investments offered by the sponsor. Since the latter are so new, many don't have long-term performance histories.
- Along with flexibility comes the ability to hold down costs. Generally, you'll pay more in fees and expenses to participate in a 529 plan than you would to invest in low-cost index funds through a discount broker.
So which is better? You guessed it: It depends on your circumstances. But here's the good news: You can have both (again, not Marcia and Jan). You can split your contributions between a 529 and a Coverdell, and enjoy the benefits of both. Also, you can transfer assets from a Coverdell to a 529 plan, but not the other way around.
These are just the highlights. For more on your options, visit our College Savings Center or check out our latest book, The Motley Fool's Guide to Paying for School: How to Cover Education Costs From K to Ph.D.
If you haven't checked out Homestore
Last year, pennies sounded about right. Homestore was haunted -- from allegations of round-tripping with partner AOL Time Warner
As a result, while the market was starting to cuddle up again to dot-coms -- those making a dent in the real world -- Expedia
Last night, Homestore took the final step in exorcising its demons when it settled with Cendant over the Move.com flap. We say final step, because the executive ranks had already been replenished.
With a market cap closing in on $400 million and rising (well, maybe not today), is Homestore finally ready to enjoy the fruits of its real-estate labors? If so, it's about time: Low interest rates have the housing market booming.
But, what's this? The refinancing market has cooled? Home sales are expected to feel the pinch? Hidden Gems have investors moving out of real estate and back into equities? Pity that Homestore. Before long, it may be down to trashing its own house party because everybody left.
Discussion Board of the Day
Have you put off your moving plans with the recent spike in mortgage rates? Are you rushing over to our Home Center to see if there's hope for a new abode? Have you turned your attention toward improving where you live now instead? All this and more -- in the Building/Maintaining a Home discussion board. Only on Fool.com.
Shares of XM Satellite Radio
Investors lost interest in lender AmeriCredit
The Labor Department said that worker productivity zoomed 5.7% in the second quarter. (All right, Labor wouldn't say "zoomed." But they should.) Initial weekly unemployment claims fell by 3,000, to 390,000, the lowest since February. If this isn't enough data for you, consider the Commerce Department's news that wholesale prices rose 1.5% in June, perhaps countering fears of deflation. For now.
For updated stories throughout the day, bookmark our ever-changing News section... Jeff Fischer takes a look at a new bank IPO that might offer investors some good old-fashioned value.... In part two of a Fool interview, Jeremy Siegel assesses stocks' near-term potential.
Bob Bobala, Robert Brokamp, Paul Elliott, Mathew Emmert, Jeff Fischer, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Reggie Santiago, Kate Southerland, Dayana Yochim
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