The News Issue Week Day

RICH AMERICA, POOR AMERICA The split nature of today's economy has been great for stock like Coach, tough for ones like Wal-Mart. Why that won't change much, even as the Democrats gain clout in Washington. he New IBM

Big Blue's shareholders have been blue for the past few years. But the tech giant has a new strategy, focused on software. Best of all, it's working.

Randall Forsyth The buck may be real loser in Iraq ...

Review&Preview A vote keeps ASMI intact. Going more nuclear ...

Storming Ahead, After run-up, a few insurers look good ...and Direct TV

Smooth Style Polo stock will stay in fashion ...

Follow the Leaders Copying smart stockpickers is one way to build a best-ideas portfolio, and it saves on management fees. A look at Oracle, Sears, AutoZone,Wendy's and other top holding of five closely watched hedge funds ...

Coming Spinoff Duke Energy's powerful idea ...

The New Big Blue Cover Story: IBM investors may soon be smiling like CEO Palmisano, as Wall Street comes to realize that Big Blue's reinvention as a software giant gives it a steadier, more profitable business with plenty of potential for further improvement ...

Spreading Joy The four rules of good giving ...

Technology Trader Microsoft stock could be ready for takeoff, now that new version of Vista and office have launched ...

13 Great Gadgets Our pick for sleek and sophisticated gadget gifts include Sony TAV-L1 all-in-one home theater, a digital SLR camera, Logitech's Harmony 1000 universal remote ...

Tuesday

Here's to Your Health


For those who get sick occasionally and don't have access to a full corporate health plan, these savings accounts offer a possible remedy. Increasingly, they require investment choices, too. Just be careful about the banks service fees.

A FEW YEARS AGO, A FRIEND CONFIDED THAT SHE and her husband, who were both self-employed, were shelling out about $1,000 amonth in health-insurance premium. I was suprised, because my husband and I were paying hundreds of dollars less even though we did't have regular corporate gigs, either: Today however-despite our attempts to police these costs we're paing a good deal more than $1,000 a month for our health benefits.

Of course, you can opt out of insmance and just hope you don't get sick, but new programs like health-savings accounts, or HSAs, are a more practical antidote for the high cost of health insmance, particularly for workers who are self-employed or toil for small companies.

HSAs are tax-exempt accounts held at a qualifyingfi­ nancial institution. You contribute to the account and, when you incur a qualified medical expense-most any­ thing you could claim on your 1040 as a medical or dental deduction (see Publication 502 on the IRS Website, www.irs.gov)-youwithdrawfundstopayforit. The pay­ ments are usually made by writing a check or using a debit card or withdrawal form your financial institu­ tion/administrator provides.

HSAs, which were created as part of a Medicare bill signed by President Bush in 2003 and enacted by Congress in 2004, are portable; that is they go with you if you change jobs. And yom money rolls over every year. Contributions are tax-exempt up to a pre­ set maximum, even if you don't itemize deductions. Increasingly, the accounts include investment options aimed at helping them grow.

To receive the tax-exemption, an HSA must be ac­ companied by a high-deductible health plan (HDHP) from an insurer; some financial institutions sell them as a package. The IRS sets the annual tax guidelines for these plans. In 2006, the minimum deductible for a single person is $1,050 and $2,100 for a family plan. In theory at least, the high deductible means the insurer can offer a better rate, and this savings, plus any additional contribution you can afford, should be enough to fund yom HSA.

Note: You can't contribute more than the amount of your HDHP deductible each year, or the IRS maximum ($2,700 for individuals and $5,450 for families),whichever is lower.

Here are some of the HSA programs and investment options we turneg up on the Internet.

In August 2006, Golden Rule (www.goldenrule.com). a UnitedHealthcare company, introduced mutual-fund investment options to help its HSA customers build their balances. Golden Rule, which helped pioneer HSAs when it introduced an antecedent, the medical-savings account, over a decade ago, is working with Exante Bank (w\vw.exantebankhsa.com) to provide HSA custom­ ers with an account, accompanying debit card, online account management and bill-paying services.

Golden Rule is one of the companies that provide both HSAs and HDHPs, although it doesn't offer coverage in all states. Participants earn 4% to 5% in an FD I C-insmed savings account. But once their accumulated funds reach $2,000, they can invest any excess in a choice of eight no­ load mutual funds. All the funds, including the Vanguard 500 Index and John Hancock Classic Value, have at least fom-star Morningstar ratings. Clients are said to squir­ rel away an average of more than $2,400 a year.

Sterling HSA (www.sterlinghsa.com).anindepen­ dent HSA specialist, has one of the most liberal invest­ ment selections we found: You can invest your HSA money in any IRS-approved vehicle. You can even work through your own broker, or use a program Sterling has with discount brokerage Partnervest Securities. Sterling HSA's own savings account tops out at 4.855% for accounts with more than $10,000.

HSA Bank (\vww.hsabankcom) has been in the medi­ cal-account market since 1997, and today is a unit of Qon­ necticut-based Webster Bank It rewards big savers with rates as high as 4.75% for accounts of $15,000 and above. Clients ofHSA can buy and sell stocks through TD Ameri­ trade Corporate Services, with which it has set up a special program: Yom money must first be deposited with HSA, then it goes to a money market account at Ameri­ trade, which you can use to buy stocks. Links to compa­ nies offering HDHPs are provided.

First American Bank (www.Jirstambankcom) offers the Health Savings NOW account, whose interest rates range from 3% for under $1,000 to 4% for $5,000 and up. Account holders get free online banking and billpay, and a debit card.

The best place we found to search and compare HDHPs is eHealthInsurance (www.ehealthinsmance. com). There, we researched health plans for a middle­ aged couple in Minnesota (like my husband and I), and found 13 plans. Deductibles ranged from $2,400 (Health­ Partners: $536.55 monthly premium; the insurer pays 80% of costs after the deductible is met and you are on the hook for 20%) to $10,000 (Blue Cross Blue Shield of Minnesota: $267.50 monthly premium; you pay nothing after deductible is met). You can click on a link to find eligible HSAs from other institutions.

Many HSA administrators offer typical online bank­ ing services-and sometimes, lots offees. Be sure to read up on any extra expenses before you choose an HSA.

Remember Quote.com? The stock-quote pioneer dis­ appeared into Lycos (www.lycos.com) for a few years, but was acquired by real-time financial-information pro­ vider eSignal (www.esignal.com) last spring. It was re­ cently redesigned and relaunched under its old address (www.quote.com).It·s now a free financial portal, devoid of pop-up and full-page advertisements.

There's a lot to like about this reincarnation. News coverage is voluminous, originating at places like Real­ TimeTraders.com (www.realtimetraders.com). Business­ Wire (www.businesswire.com) and the Associated Press (www.ap.org). Both breaking headlines and full stories are posted. Commentary at this early stage is options­ heavy, courtesy of Schaeffer's Investment Research (www.schaeffersresearch.com). There's also a smattering of global-market news and index quotes.

U.S. indexes and markets, of course, are quoted, and in­ dividual stock coverage is solid. You can do pasic technical analysis and read related Raging Bull message boards, view a company profile and SEC filings, and review in­ sider and institutional trading. There's also good mutual­ fund and ETF coverage. Yahoo!Finance it ain't, but it's good to see Quote.com back and off to a great re-start.

The Web is full of stock picks from pros, but ama­ tern's often claim they can do better. The Motley Fool (www.Jool.com) is offering them a chance to prove it with a new service launched October 3:

CAPS (capsJool.com) assesses.investor predictions for more than 1,200 individual stocks over a variety of time periods relative to S&P 500 performance. It also monitors the forecasts of more than 125 Wall Street firms and analysts. The site has been in beta test for a year or so, and a number of participants, with track records of just a month or two, have been 100% accmate. A fun site, well-designed and packed with picks and the reasoning behind them. Better yet, it's free.

By Kathy Yakal

Complete Archive Desember 2006

The New Cisco As technologies like Internet video take off, Cisco Systems, the king of computer networking, will be among the biggest winners. Why its shares could rally another 15%.

Survivor! GOP Will Hang On Despite a profusion of predictions to the contrary, the Republicans will keep control of Congress through just barely. So says our highly reliable seat by seat analysis of local political funding.

The New IBM Big Blue's shareholders have been blue for the past few years. But the tech giant has a new strategy, focused on software. Best of all, it's working.