It's truly terrific news that the recent fires in California are mostly behind us. I worry for all the people who have lost their homes in those fires. This isn't at all unlike a hurricane hitting Florida or the Gulf Coast. Disasters like these uproot entire neighborhoods. Some will rebuild. Some will leave and never return. None will ever be the same.

I can't help but wonder how many people's lives will be made even more complicated than they already are because they've lost all contact with their records. Think about it for a minute. How many accounts do you have? You have financial accounts, probably checking, maybe savings, a brokerage account. There's your 401(k), your IRA (maybe a couple of them). You probably have one or more nsurance policies, and a mortgage. Don't forget credit cards.

The list goes on and on. My personal stress level goes through the roof thinking how awful it would be to try to reconstruct all that information literally from ashes. I have three recommended ways to safeguard your personal information in the event of disaster

I just wanted to put out a friendly reminder that if you've been considering moving out of mutual funds and into exchange traded funds, now is the time to get moving. Between now and the end of next month is prime time to implement this strategy. Here is why, and also why you should at least stop investing in mutual funds for a while.

I'm always preaching investment advice to people I know. Invariably I'll be having lunch with someone and even before the food shows up I'm going on about how to avoid making one or more investment mistakes.

One of my biggest pet peeves is holding on to a loser investment too long. Time and again I hear the sob stories about the stock that went up briefly and then tanked. The so-called investor, a.k.a. deer in the headlights, then freezes, hoping the stock will rebound. Too often it continues to fall, or does nothing at all, and our investor friend continues to lose money. These are the kinds of things that cause us to under perform the market.

But today my story is about another kind of under performance.

It's funny sometimes how you can watch these little wavelets go around the financial community. It's sort of like the waves that get started at sporting events except in this case it's writers picking up on each others' stories and taking a topic a little further, or off in another direction.

I recently saw a little wave of articles asking and answering the question about what to do with extra money:

Given some amount of extra money, should I invest that money, or would it be better to pay down debt?

I just couldn't jump on this one because to me it always seemed so obvious. The best strategy is the one that leaves you with more money in the end. The problem is only a little complicated because all debts are not treat equally, just like not all income is treated equally, in the eyes of the IRS. The answer relies on how the interest paid and the income earned are treated when it comes to taxes.

It's Friday. The end of the week. This seems like an appropriate day to put a wrap on this impromptu series of articles about timing the market based on the direction of interest rates. The two previous articles are linked below.

In this article series we've been looking at past performance of the Dow Jones 30 Industrials as they relate to the Federal Reserve Target Funds Rate. The theory, proposed a very long time ago by a friend, suggested that investors should buy when the Fed begins reducing rates and sell when the Fed begins raising them. The theory behind this rudimentary market timing system holds that easy money allows for market expansion and growth, which in turn means higher stock prices. Conversely, rising interest rates put the brakes to growth and hold stock price appreciation back.

Yesterday we took a brief look at whether a change in the direction of interest rates was an indicator of whether you should buy or sell stocks. The theory says that when interest rates - in this case we're watching the Fed Funds Target rate - are falling, money becomes cheaper. Less expensive debt allows corporations to borrow more aggressively and in turn expand more rapidly. Conversely, when interest rates are on the rise stocks will fall because credit is tight and expansion is more difficult.

What's your philosophy on the topic of portfolio rebalancing? Mine used to be one of mechanistic precision. Lately, rebalancing my portfolio is something I do less and less of. And I think as we become more successful, and by that I mean wealthier, we will all gravitate toward less frequent portfolio rebalancing.

The argument for rebalancing your portfolio on a periodic basis - quarterly is usually the recommended interval - remains sound. From time to time it makes sense to sell a few shares of your investments which have outperformed the others in your portfolio and use the proceeds to buy more shares of those investments which have lagged in your portfolio. That is, provided you're still convinced the laggards still warrant your investment.

Portfolio rebalancing is sort of a dollar cost averaging philosophy applied after the fact of investing. The effect is much the same as dollar cost averaging. You're buying less of - selling, actually - securities which are higher in proportion to your overall portfolio, and buying more of those which are lower in proportion to your overall portfolio.

I was talking to a buddy of mine this weekend at a party. He was pretty proud of his recent investment decisions. Several of the stocks he'd been watching lately have been down quite a bit. He'd been a buyer in one or more of these issues as last week's sell off continued through Thursday. On Friday he saw his strategy start to pay off. By party time on Friday evening he was feeling like Donald Trump and Warren Buffet's long lost love child.

His story got me to thinking about the merits of Buy and Hold versus some other strategy of buying. For instance, what about buying when stock prices dip - a form of Market Timing, as my buddy had done?

Do you rent DVDs? We used to. At one time in my life picking out a DVD to watch on Friday or Saturday night was part of the entertainment ritual around here. The DVD rental store replaced going to the movies in the competition for our entertainment dollars for years.

Not so much any more. Now I just buy DVDs outright. I figure $20 is a bargain compared to the available alternatives competing for my entertainment dollars.

I made a comment to an article this morning on another blog, All Financial Matters, where the idea that an ETF might not be around long if capitalization doesn't reach $200 million. Capitalization is only one of the factors I'd consider when evaluating an ETF. I thought this morning I'd lay out some of my own decision factors for deciding which ETF to purchase.

Trading Volume goes along with the capitalization metric mentioned in the original post. I'm not particularly concerned with capitalization as much as I am with trading volume because I want to see my ETF priced efficiently.

Granted there are trade-offs. Low volume may reflect a buy-and-hold mentality among investors; but if this is the case it should be coupled with decent return and volatility metrics. And yes, trading volume and capitalization tend to go hand-in-hand.