1.  Sign up for a MarketRiders 30 day Free Trial.  There is a “sign-up” link on the top right of www.marketriders.com.

2.  You will be asked to create your first portfolio and you’ll have 2 options:  “Build It For Me” and “Let Me Build It.”  Choose “Let Me Build It.”

3.  In Step 1 of 5, you’ll see a list of templates that you can use in a pull-down menu.  The CNBC model portfolios are listed in these templates.  Select the portfolio that you’d like to use.

4.  In Steps 2 and 3 of 5, you’ll be able to alter the asset allocations and ETFs in the CNBC portfolios.   If you don’t want to change anything in the CNBC portfolios, click “Next” at these steps and go to Step 4 of 5.

5.  In Step 4 of 5, name your portfolio and enter the amount you want to invest so MarketRiders can calculate the number of shares you need to purchase of each ETF and email you a list.

6.  Once you’ve purchased the ETFs, enter the costs into MarketRiders and you’ll receive an email notification when the actual allocations stray from the CNBC targets so you can then rebalance portfolio.  On the dashboard, you can “Change Alert Settings” to make these alerts more or less frequent.

Read more about the CNBC portfolios here:

www.cnbc.com/id/34726386

A few other noteworthy tips that surfaced recently are highlighted below.  I hope they are of interest to you.

* Economist and “Sunday Morning” Commentator Ben Stein stopped by “The Early Show” Thursday to discuss advice from his new book, “The Little Book of Bulletproof Investing.” Stein explained how to maximize your income while protecting your savings from financial calamities.  Interested to learn more, read the complete story:

* Mr. Madoff spends free time in the prison library on the weekends and often watches movies, including “Lethal Weapon,” according to the former inmate. He said he chatted with the admitted Ponzi schemer on Saturdays in the library and asked for financial advice: “He gave me ideas on my index funds.”  Mr. Madoff advised him to diversify, saying he should invest in funds that track the S&P 500 index of stocks “where my money would be on all the stocks instead of putting my eggs into one basket,” the former inmate said.  The source might be questionable but the advice is good.

* Lastly, TIPS-short for Treasury Inflation-Protected Securities-offer investors the closest thing Uncle Sam has to a sure bet these days. These bonds have the full backing of the U.S. government and provide investors with returns that will keep pace with future rates of inflation, as measured by the U.S. Consumer Price Index. You can buy them directly from the government, but it’s easier-and a better investment decision in many cases-to buy low-fee ETFs that hold TIPS. Read more.

So when it comes to investing in any type of fund, be it index mutual funds, exchange traded funds (ETFs) or mutual funds, investors need to be their own advocate.  Do your homework to understand your true costs as no two funds are exactly alike.  ’Americans save trillions of dollars for college education and retirement by investing it with funds managed by industry and giants like the Vanguard Group and Fidelity Investments.’

If you are new to the game, beginners should brush up on Investing 101 basics. There are a lot of choices. Make the smartest choice for YOU.  Just remember, time is your friend.  Money spent on fees today, compounded over time, is money that could be sitting in your retirement account. Do your homework, you will thank yourself later!

The study concludes that “The decline in retirement preparations could be directly related to companies no longer offering 401(k) matching, layoffs and the housing crisis. Lack of retirement planning forces many to work until they are much older.”

To that I say you need to start investing in the market by establishing your own individual retirement account (IRA).  Look to start investing in low cost investment vehicles such as exchange traded funds (ETFs). Not only will you be able to save on fees, that in turn stay in your own portfolio and compound over time, but also they allow you to be in the market with less risk than individual stocks. ETFs are a basket of stocks or bonds that track an index, not individual equities, and thus are inherently less risky. I also suggest utilizing tools offered by marketriders.com to get guidance on how to build a portfolio with an asset allocation that suits your financial needs and offers you diversification.

I realize 2009 was a tough year, but know that any amount you can add to your retirement portfolio today will have greater benefits to you in the future.

His article  ‘Big brokers cut commissions to draw ETF assets, trading — Fidelity, Schwab waive fees as competition heats up; investors reap lower costs’ documents the seimic changes that will encourage investors to wake up and yank Wall Street out of their pockets.

As he points out, “Paying broker commissions to trade ETFs has been a major drawback for buy-and-hold investors who contribute small amounts to their retirement portfolios on a periodic basis. Those fees can quickly negate the cost advantages of ETFs.”  Now, for those employing the buy-and-hold investing strategy with an asset allocation that provides for diversification and rebalancing to keep to that allocation, these lower fees are a true win.  ‘The 25 iShares ETFs that can be traded commission-free at Fidelity are so-called core funds that can be used as the major building blocks in a diversified portfolio.’

“one of the biggest advantages of ETFs is cost. Many ETFs charge 0.5% a year or less in expenses. That’s $50 a year on a $10,000 investment, less than it would cost to retread a tire.”

Luckily, with the range of ETFs available on the market today one can easily construct a diversified portfolio with a robust asset allocation.  ”You can use broad-based, low-cost ETFs to build a solid portfolio on the cheap.”

Bottom line, with the way the economy is going, one can not ignore the cost benefits of an ETF.  “Over the long term,  ETF investing in basic, low-cost portfolios can save you thousands — or tens of thousands — of dollars. Why give it to a fund manager if you can keep it yourself? Even if you’re not a cheapskate, you can appreciate that.”  Give them a try.

According to a recent New York Times article ETFs: The Next Step For Average Investors  “Average investors haven’t really latched onto perhaps the biggest investing innovation of the past two decades.  Despite being low-cost, tax-efficient and easy to buy or sell at a moment’s notice, exchange-traded funds remain largely the domain of institutional investors and stock-market aficionados.”

‘Main Street still barely knows what they are,’ acknowledges ETF expert Matt Hougan of IndexUniverse, an independent Web site on exchange-traded and other index funds. That may soon change.”  

 The wave is sweeping the investment landscape and investing in them might soon be considered “cool”.  Join the revolution and invest in ETFs.

ETFs are not a secret, but investment professionals often don’t make fees from them, so they often go ignored.

Each ETF is a “basket” of stocks that represent a particular index. For example if you wanted to own every stock in the S&P 500 Index, you would by one of several ETFs that follows that index – an example being “SPY” or Spiders. By owning one share of SPY, you gain diversification across 500 stocks.

With ETFs you can invest in practically any market you want. Some of the most popular indexes are the S&P 500 (tracks the largest U.S. public companies), the Russell 2000 (tracks some of the smallest U.S. public companies) and the Morgan Stanley Europe Asia Far East (EAFE) index composed of companies in developed foreign countries. ETF investing also allows you to invest in real estate, bonds, commodities, sectors and other markets. There are currently over 800 ETFs now available and growing.

Mutual funds are 6 -10 times more expensive than ETFs because they hire pros who try to select a few stocks within the index that will “beat” it. But when you invest in an index fund, you basically get the exact returns of the index. Since computers (not humans) manage the stocks in an ETF, the fees are very low.

Sit back and let it ride — To allow the Law of Compounding to work its magic, it’s important to hold your ETFs as long as possible so you pay minimal taxes on dividends. And really, unless you decide to get out of a market, there are few good reasons to sell. Better to hold on and ride the markets, continuing to enjoy the benefits of Law of Compounding at rates that have averaged around 9% a year through history for stocks and 5% for bonds.

Still yearning for the excitement of individual stocks or “high-flying” mutual funds? If you’re determined to beat the house, you might as well go to Las Vegas. It has nicer hotels than Wall Street for nursing your financial wounds.

Your first step is to create a portfolio with an asset allocation accounting for risk and time frame.  Once this bond-to-equity ratio is determined, you will build a portfolio with adequate diversification with anywhere from 5-10 ETFs, across several asset classes.   You are almost done.  Your last step to get started is actually buying the funds – your discount broker can help you with that.

With that all done, you are well on your way.  As the market shifts, so will your balance of stocks to bonds. Frequent rebalancing will keep your portfolio in line,  an important step not to be forgotten.  

In time, this passive investing strategy I hope  will serve your core assets well.