Author: glyphic

In the last few months I’ve had to deal with crazy spyware on my machine and my sister’s machine. It used to be the case that you’d get spyware on your machine by installing a program like Limewire or getting suckered into adding the Bonzi Buddy to your computer. Now visiting the wrong web page with Internet Explorer can get spyware installed without your knowing.

Removing spyware

If you’ve been infected, you’re in for some work. It’s like dealing with a flea infestation, without all the vacuuming.

1. Download and install these three free programs: AdAware, Spybot Search & Destroy, HijackThis! AdAware and Spybot S&D are similar, but they each seem to cover some things that the other doesn’t, so it’s good to get the overlap. HijackThis is a very powerful and dangerous tool. Don’t mess around with HJT unless directed to do so by a guru (more on that in a bit).

2. Use AdAware’s update function to install all available updates and run a full scan. Then allow it to fix everything it finds. There might be some things which you’ll want to keep, but if in doubt, fix it. AdAware might require you to restart your machine.

3. Use Spybot’s update function to install all available updates and run a full scan. Be sure to select a mirror located in your country, or you may get a checksum error when downloading the update. Then allow it to fix everything it finds. There might be some things which you’ll want to keep, but if in doubt, fix it. Spybot might require you to restart your machine. Spybot also has some Internet Explorer protection features. I’ve only run into a couple issues with this one, and usually it involves watching some cartoon on the web. Since doing this kind of activity isn’t critical to my happiness, I just move on.

4. Run a full anti-virus scan. If you have AV software, make sure the definitions are up to date. If you don’t, you can do an online scan at BitDefender or you can install AVG Anti-Virus.

5. Run HijackThis and save the log of what it finds. Do not mark/fix anything until you’ve gone to The PC Guide Discussion Forums and posted a description of your problem, your prior actions, and the full log file. One of the experts (Budfred’s a good one) will go through your log file and give you further instructions. If you’re not comfortable with rebooting into safe mode or using a command line to delete files in your windows\system32 directory, recruit someone who is.

That’s about it. It’s a lot of steps, and it’ll take you a few hours to do it, but for the really vicious stuff, it’s the only way.

Preventing spyware

There are a couple options:

1. Don’t use Internet Explorer. The combination of insecure software and market domination makes IE the target for all kinds of hijinks. Try Mozilla instead.

2. If you’re like me, you like using IE (for no good reason). In this case, use Windows Update to get the latest security patches for Windows and IE. Download Spybot S&D and/or SpyWare Blaster and run the protection scheme. Update your virus definitions or get AVG to protect your system.

Good luck.

So I was goofing around with my own investment records when I realized that I had a great way of showing the advantage of dollar-cost averaging. As you may recall from the mutual fund primer, dollar-cost averaging lets you reduce the variance (to use a poker term) by spreading out your investment over time.

Here’s an example using some real world numbers (Vanguard 500 Index Fund). The following are share prices at the end of every quarter for two years.

Date        Price/Share
6/21/2002        $91.22 
9/27/2002        $76.37 
12/27/2002       $80.73 
3/28/2003        $79.69 
6/20/2003        $91.94 
9/26/2003        $92.08 
12/26/2003      $101.15 
3/26/2004       $102.30 

From June 2002 – March 2003, the price/share of the fund dropped 12.64%. So if you had taken your maximum $2000 IRA contribution and stuffed into this fund in June and looked at your balance in March, you would have been pissed off.

From June 2003 to March 2004, the fund’s price/share increased 11.27%. If you had put in $2000 in June and looked at your balance in March, you would have been pretty psyched.

Overall, from June 2002 to March 2004, this fund saw its share value go up by +12.15%. Your $4000 investment over two years would be valued at $4468 for a gain of 11.71%.

But what if you had practiced dollar cost averaging? That is, dividing your $2000 in fourths and investing it over the year?

Date        Price/Share        Trans. Amt       Shares
6/21/2002        $91.22          $500.00        5.4813
9/27/2002        $76.37          $500.00        6.5471
12/27/2002       $80.73          $500.00        6.1935
3/28/2003        $79.69          $500.00        6.2743
6/20/2003        $91.94          $500.00        5.4383
9/26/2003        $92.08          $500.00        5.4301
12/26/2003      $101.15          $500.00        4.9432
3/26/2004       $102.30          $500.00        4.8876

From June 2002 to March 2003, you would have seen a drop in the value of your investments of only -2.40% because 1/4 of your shares were purchased at the high price of $91.22, but the other 3/4 were purchased at lower prices (lower prices also translate into more shares).

From June 2003 to March 2004, you would have seen a gain in the value of your investments of only 5.88% because at least half of your shares were purchased at higher prices.

Overall, however, you would have seen a gain of 15.59% on your $4000 investment for a final value of $4,623.47 (remember, the lower prices enabled you to buy more shares during 2002-2003, which translated into more wealth when the fund price topped $100 in 2004).

This demonstrates that dollar-cost averaging not only works to reduce your risk, but in this particular example, allows you to outperform the index itself!