Asset allocation is a strategy, advocated by modern portfolio theory, for maximizing gains while minimizing risks in your investment portfolio. Specifically, asset allocation means dividing your assets among different broad categories of investments, including stocks, bonds, and cash equivalents.

Determining the asset allocation model - specifically the percentages of your portfolio allocated to each investment category - that's appropriate for you depends on many factors, such as how much time you have to invest, your tolerance for risk, and your investment goals.

For example, one investor might choose to invest 70% of her money in stock and stock mutual funds, 20% in bonds, 5% in REITs, and 5% in cash equivalents, while another might decide to split his money evenly between stocks and bonds only. These two portfolios will produce different returns, due partly to the difference in their asset allocation models. Ibbotson's research shows that, on average, 40% of the return difference between one portfolio and another is explained by the different asset allocations. So, if the first portfolio returns 5% more than the second, then on average about 2% of the difference (40% of 5%) is explained by the different asset allocations, while the remaining 3% difference (60% of 5%) is explained by security selection, timing, and fee differences.

Setting your asset allocation is the single most important decision you can make as an investor. (That is, once you've decided to invest at all!) That's because, on

A comprehensive review of your retirement plan every few years is almost as important as having a retirement plan. What you save for retirement is one of the most important financial challenges you might face in your lifetime so make sure you review and monitor it often.

Retirement Goals
Do the goals you originally set still apply? Do you still plan to retire at the age you first decided upon? Has an illness or other life event changed your retirement goals? Are your investments growing in a manner to finance your retirement goals? You might need to reevaluate your goals or set some now ones periodically because changes are constantly being made in our lives.

Personal Finances
Is your income more or less than when you originally set up your retirement plan? Do you have additional income to invest from a second job or your spouse's job? Have you had a bankruptcy or had to make major purchases in the past few years that might affect your retirement plan? Do you have children in college that might dip into your retirement funds? Have you had to withdraw some of your retirement investments for personal use? Your circumstances at any given time will dictate what you can put back for your retirement.

General Electric Co. is getting out of the sub prime mortgage business, the latest company to distance itself from an industry that seems to grow messier by the week.

The industrial, finance and media conglomerate, announcing second-quarter profits on Friday of $5.42 billion, said it took a $160 million hit on the sale, but that it has dumped $3.7 billion of its sub prime mortgage portfolio, easing the company out of a worsening environment.

GE's WMC Mortgage has $1.1 billion in mortgage loans remaining.

"In the first quarter we said we were committed to the business and we were," Keith Sherin, chief financial officer, told analysts in a conference call. "Based on the changes we saw, we made the decision to exit the business. I think it was a smart move."

Sub prime mortgage companies, which finance high-interest loans to borrowers with poor credit, have suffered since the housing began to crumble last year.

Starbucks has closed a coffeehouse in China's former imperial palace, the company said Saturday, ending a presence that sparked protests by Chinese critics who said it damaged a key historical site.

The controversy over Starbucks at Beijing's 587-year-old Forbidden City has highlighted Chinese sensitivity about cultural symbols and unease over an influx of foreign pop culture.

Starbucks closed the 200-square-foot outlet Friday after Forbidden City managers decided they wanted all shops on its grounds to operate under the palace's brand name, said Eden Woon, Starbucks' vice president for Greater China.

"It was a very congenial decision. We respect what they are doing," Woon said.

The Starbucks opened in 2000 at the invitation of palace managers, who needed to raise money to maintain the 178-acre complex of villas and gardens. But critics said it was inappropriate. An anchor for Chinese state television led an online protest, saying the coffeehouse diminished Chinese culture.

After you determine your income tax liability you may be able to reduce that liability by claiming one or more tax credits. Most personal tax credits are allowed to the full extent of your regular tax liability and alternative minimum tax. But, it is important to note that they do not create a refund if they exceed your tax liability. Nonrefundable credits include the child tax credit, dependent care credit, adoption credit, education credits, retirement savings credit, credit for the elderly and disabled, mortgage interest credit, and D.C. first-time home buyer credit. Refundable credits include the additional child tax credit, the earned income credit, and the health coverage credit. If the credit exceeds your tax liability, you will receive a refund for the excess.

1 Child Tax Credit for Children Under Age 17

For 2006, you generally may claim a tax credit of $1,000 for each qualifying child who is under age 17 at the end of 2006. To figure the exact amount of your credit, however, you must complete the "Child Tax Credit Worksheet" in the IRS instructions to Form 1040 or 1040A to determine if the credit is limited by your tax liability. Even if the credit does exceed your tax liability, part or all of the credit may be refundable as an additional credit on Form 8812 if your earned income for 2006 exceeds $11,300 or you have three or more children.

EURUSD Pattern Indicates Potential For Sharp Reversal

Euro Ending Diagonal?- Japanese Yen Bearish (USDJPY Bullish) Above 120.97- British Pound Upside Potential Limited- Swiss Franc Corrects Gains (USDCHF Losses)- Canadian Dollar 1.0442 Key for Bears (USDCAD Bulls)- Australian Dollar Nearing .8700- New Zealand Dollar Bullish Above .7714

Commentary: 1.3800 held yesterday but the EURUSD could test that level again today before bearish potential comes to the forefront. We say this because the rally from 1.3731 may be tracing out an ending diagonal. If this is the pattern playing out, then we should see a spike through 1.3798 before a reversal. However, upside potential is limited compared to downside risk. It seems likely that we?ll see a decline backl towards the former 4th wave at 1.3568 next week. Coming under 1.3731 instills confidence in the near term bearish case. Strategy: Sell break of 1.3731, against swing high (currently 1.3798), target 1 is 1.3568, additional bearish potential below there

Commentary: We wrote yesterday that "the USDJPY bounce from 120.97 is still in 3 waves, but a rally through 122.52 would make the rally a 5 wave affair and strongly indicate that the entire decline from 124.13 was an a-b-c correction. Keep in mind that the longer term structure suggests that an A-B-C correction could extend to 128.00 before the larger reversal." The USDJPY pushed through 122.52 to make the rally from 120.97 5 waves, which sets the tone for additional gains. The decline so far has been corrective but additional support is at 121.83. A break above 124.13 is now the favored view, but 120.97 must hold in order to keep the bullish structure intact. Strategy: Bullish now, against 120.97, target a break above 124.13, target TBD

North American hog prices have likely seen their highs for the year, and should see a steady decline into the winter, according to a market analyst. However, weather conditions and the outcome of the US corn crop could cause prices to see some movement apart from the general downward trend.

"The highs for the year are probably behind us," said Ron Plain, a livestock economist with the University of Missouri-Columbia. He said the seasonal trend was for prices to decline after June, with lower prices each month until December, when the market typically starts to pick back up.

Large US pork supplies, coupled with the slower pace of US pork exports this year should add to the seasonal pressure on the hog market, said Plain. He thought the US would need to see better exports if prices were to see an improvement.

Hot weather over the next couple of months could also help underpin the hog market, said Plain noting that hot weather causes hogs to grow slower and pulls down pork production.

Thieves are breaking into vacant houses in North Minneapolis and St. Paul to steal copper plumbing and wiring. Similarly, electric lines are disappearing in the Dominican Republic and other developing countries. High metals prices are affecting economies around the world, offering myriad applied economics lessons.

Prices certainly have increased, particularly for nonferrous base metals like copper, lead, tin and zinc. All have at least tripled since 2000, more than steel or even crude oil. The booming economies of China and other Asian nations drive much of the demand.

Commodity prices still play an important role for many developing countries. Metals exporters like Chile, Zambia, Peru, Malaysia and Russia all enjoy booming international sales that broadly bolster their domestic economies. The question is whether this favorable situation will translate into longer-run sustained growth or be dissipated in short-run spending binges.

High metal prices also demonstrate how recycling, broadly defined, relates to prices of virgin materials. Consumers envision recycling as putting empty cans and bottle out on the curb. But in tonnage and dollar terms, most recycling occurs at a commercial level.

South Korean oil workers
The world's thirst for oil is only likely to grow
Global demand for oil will increase significantly next year, according to the International Energy Agency (IEA), putting further pressure on prices.

In its monthly study of market trends, the IEA said demand would rise by an average of 2.2 million barrels a day next year, up from 1.5 million in 2007.

But it expects Opec members to lift output to cover the surge in demand.

Oil prices have surged in recent weeks, topping $76 a barrel, on supply worries and violence in oil-rich Nigeria.

Bearish undertones continued to plague the US dollar during the New York session following rather lackluster US economic reports. Continuing on yesterday's momentum, the Euro remained higher against the greenback and traded at an all time high of $1.3810 in the morning, while declining against the British pound to the tune of $2.0365. Subsequently falling against the Japanese yen to below the 122.01 mark, the greenback was able to regain some support against the Canadian dollar after testing C$1.0450, the fourth gain in five sessions.

Dour news early in the New York morning helped to suppress dollar strength in the week's closing session as both US advance retail sales and consumer confidence numbers were slated for Friday. Worse than expected, US retail sales figures actually dipped on the month, far worse than expected by

Another day, another deal.

Thanks to online coupons, price-comparison search engines and reward memberships, savvy shoppers can pay less than full price on any day that ends in "y." But depending on what you're planning to buy, some days of the week may yield better bargains than others.

We talked to the experts, and narrowed down the best days of the week to buy certain items.

Airplane Tickets
When to Buy: Wednesday morning.
Why: "Most airfare sales are thrown out there on the weekend," says travel expert Peter Greenberg, a.k.a. The Travel Detective. Other airlines then jump