Quicken, Money programs both helpful

In today’s increasingly complicated world, if you want to have a solid handle on your personal finances, you’ll likely need some help. Software packages such as Intuit’s Quicken and Microsoft’s Money are good helpers. Either will likely serve your needs quite well as you track your cash inflows and outflows, pay bills, monitor investments, and prepare for tax time.

If you’re wondering which one is best, here are some bottom lines from folks who have tested both products:

In PC Magazine, Kathy Yakal wrote: “This is usually a tight race, but this time around, Money is our Editors’ Choice. Its new depth options, better online connections, and closer attention to spending and categorization make an already capable, sophisticated and highly usable finance program even better. That said, Quicken remains a worthy adversary, and users committed to that platform will be served perfectly well by upgrading rather than switching. But if you’ve been mulling a switch, or are new to personal-finance software, Money is currently king of the hill.”

In The Washington Post, Michael Tedeschi opined: “Complete beginners to this category of software may find Money’s Web-style interface more comfortable; this program is less demanding than Quicken when it comes to tracking your basic financial health. But if you need in-depth financial management, Quicken is the leader by a narrowing margin — it keeps all of your account histories one or two clicks away and offers better planning tools.” He added: “Thinking of switching from Intuit to Microsoft or vice versa? No halfway contented user of either program need bother — the effort needed to learn a new program will outweigh any benefits you might see.”

These programs can improve your life. They can help you see where your money is going and can help you manage it. Millions have used them successfully — so consider trying one. If you don’t like it, there’s always good old pen and paper.

For more help managing your money, check out a free trial of our Rule Your Retirement newsletter at www.ruleyourretirement.fool.com. Or learn how to choose a financial adviser at www.fool.com/fa/finadvice.htm.

Ask the Fool

Q: I beg to differ with your belief that stock splits have little net effect on investments, as stock prices are adjusted to reflect splits. I bought 100 shares of a stock in 1990 and since then it has split 14 times. A hundred shares purchased in 1990 have grown to 2,376 shares. A thousand dollars invested in 1990 is now worth more than $35,640. — Baxter Reitzel, Siler City, N.C.

A: The stock’s value kept rising because the value of the underlying company kept increasing, not because of stock splits. If the company never split its shares, those original 100 shares would likely be worth around $35,640, trading for around $356.40 each instead of $15.

Q: Should I focus my investing on stocks with low P/Es and/or high dividend yields? — P.N., Roanoke, Va.

A: Those measures can help you find some possible gems, but they’re not fail-safe. For one thing, you’ll miss many outstanding investments that don’t pay much, if anything, in the way of dividends. For example, eBay pays no dividend, and Microsoft introduced only one in 2003. Companies also sometimes sport high dividend yields and low price-to-earnings ratios only because their stock price has tumbled due to some major trouble.

Consider Merck. A year ago, it was trading for $46 per share, with a P/E ratio in the mid-teens and a 3.4 percent dividend yield. After its troubles with Vioxx and other matters, the stock has recently been trading around $31 per share, with a P/E ratio around 11.5 and a yield near 5 percent. Is it a screaming bargain right now, or a company still floundering? You can’t tell from just the P/E or the dividend yield.

You’ll find stock-picking guidance at www.fool.com and morningstar.com.

My dumbest investment

In 1981, we purchased 20 one-ounce South African Krugerrands for $527 each. They have been generating no interest at all since then. Is it wise to keep them, or sell them, now that gold prices have been creeping up? My husband says we shouldn’t have kept them this long, but I’ve always thought it was good to have some gold you could put your hands on. Who is right? — Goldie, in Illinois

The Fool Responds: In general, gold has been a poor investment for most of the past two centuries. There have been some periods here and there where it rose sharply in value, but unless you made the right calls at the right times, you’ve been out of luck. It has indeed been rising lately, recently trading for around $440 per ounce. Gold is seen by some to have a more lasting value than, say, stock in companies that may go out of business. But properly monitored, many companies will keep growing for decades. Other alternatives, such as real estate, are also more likely to increase in value over the long haul.