ETFs http://www.wisebread.com/taxonomy/term/12206/all en-US 8 Signs Your Retirement Is on Track http://www.wisebread.com/8-signs-your-retirement-is-on-track <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-signs-your-retirement-is-on-track" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_retirement_accounts_78210119.jpg" alt="Couple finding signs their retirement is on track" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You feel like you're a diligent saver, and are doing all you can to ensure you have a comfortable retirement. But how do you know if you're doing things right? It's hard to predict how much money you'll need, and it seems impossible to know if you're on the right track when retirement is years or even decades away.</p> <p>Thankfully, there are some easy ways to tell if your retirement planning is sound. If your portfolio has most or all of these characteristics, keep up the good work and don't fret!</p> <h2>1. Most of the Funds Are in Tax-Advantaged Accounts</h2> <p>When saving for retirement, it's important to place your money in accounts that shield you from paying unnecessary taxes. A 401K is a common plan offered by employers that allows you to contribute and invest in a variety of different mutual funds. Any money you contribute will be deducted from your taxable income. It's also possible to invest in a Roth IRA, which allows you to invest and avoid paying taxes on any gains. If all or most of your money is in these accounts, you'll be saving thousands of dollars and will have a much higher net return on your investments.</p> <h2>2. You've Been Contributing Heavily</h2> <p>It's hard to know exactly how much you should put into your retirement accounts, but &quot;as much as you can&quot; is usually good advice. If you're maxing out your allowable contributions to 401K or IRA plans (or both), you're probably doing quite well. For 401K plans, you can contribute up to $18,000 annually. IRA plans can accept $5,500 in contributions each year. Even if you're not maxing out these accounts, contributing enough to take advantage of your employer's match of 401K contributions is one good threshold to hit. As much as people like to talk about stock market gains helping them get rich, the truth is that your portfolio's value is helped a lot more by the amount you're contributing in the first place.</p> <h2>3. You've Seen Steady Growth Over Time</h2> <p>Take a look at your portfolio's performance on a line chart. Are you generally seeing an upward trend, without a lot of wild ups and downs? Does it seem like your savings is steadily growing over time, even during periods when the stock market is not doing well? A good retirement portfolio should generally be free of volatility, and see steady gains as time goes on.</p> <h2>4. Your Projections Look Good</h2> <p>No one knows how the stock market will perform in the future, but you can make some reasonable assumptions based on historical market returns. The S&amp;P 500 has seen average annual growth of about 7% since 2006, and annual average gains are even higher the farther you go back. If your portfolio's performance has been in line with these annual averages, you're probably in good shape, as long as you're contributing a significant amount.</p> <p>It may be possible to project how much money you'll have in retirement by taking the amount you have now, then adding your contributions and the annual average return through your retirement year.</p> <h2>5. Your Investments Are Focused on Growth</h2> <p>Unless you are close to retirement, your portfolio should be heavy on investments that promise growth over the long term. This means a big dose of stocks, rather than bonds or cash. Small cap and value stocks should be a driver of most retirement portfolios, as they often promise the most growth potential.</p> <p>It's tempting to want to be conservative with your investments, because stocks can be risky, and no one likes to feel vulnerable to a bad day in the stock market. But building a large retirement next egg requires you to overcome your fears and recognize the positive historical returns of stocks.</p> <h2>6. Your Portfolio Is Well-Balanced</h2> <p>It's always a good exercise to examine your investments to see if you are too heavily invested in any one sector or asset class. Sometimes, your portfolio can get out of whack, and will require rebalancing of your assets. If you are working hard to keep your investments nicely balanced, you'll likely be shielded from any major swings in the market and should see solid growth over time. There is one caveat here, which is that buying and selling during rebalancing could have tax implications, so you'll want to weigh the costs and benefits each time you're considering it.</p> <h2>7. You're Not Paying Too Much in Fees</h2> <p>A robust retirement portfolio should probably contain some mutual funds and/or exchange traded funds (ETFs). But these investments often come with management fees, commissions, transaction fees and other costs. A typical investor pays about 1.5% in fees, according to Rebalance IRA. That could add up to thousands of dollars over time. To avoid losing money to fees, look for investments with very low expense ratios, and those that trade without a commission. Low-cost investments often outperform those with higher expense ratios anyway. So if the costs in <a href="http://www.wisebread.com/stabilize-your-portfolio-with-these-5-bond-funds" target="_blank">your retirement portfolio</a>&nbsp;are low, that's one more thing you're doing well.</p> <h2>8. You Haven't Spent Any of It</h2> <p>There may be times in your life when you'll be tempted to withdraw money from your retirement accounts to pay for other expenses. There's a cost to doing this; any money taken early from these accounts is subject to being taxed, and you'll have to pay a 10% early withdrawal penalty if you take money early from a 401K. And of course, on top of these penalties and taxes, you'll lose out on any future growth this money might have accrued. If you've been diligent about not touching your retirement savings early, you'll be in much better financial shape than if you had raided these funds.</p> <p><em>How's your retirement looking?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/8-signs-your-retirement-is-on-track">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-tell-if-your-401k-is-a-good-or-a-bad-one">How to Tell if Your 401K Is a Good or a Bad One</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-best-online-brokerages-for-your-ira">5 Best Online Brokerages for Your IRA</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-best-money-management-tips-from-john-oliver">7 Best Money Management Tips From John Oliver</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-money-moves-to-make-the-moment-you-decide-to-retire">12 Money Moves to Make the Moment You Decide to Retire</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-much-should-you-have-saved-for-retirement-by-30-40-50">How Much Should You Have Saved for Retirement by 30? 40? 50?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement contributions ETFs growth index funds investing on track portfolio stocks tax advantaged Thu, 28 Jul 2016 09:00:11 +0000 Tim Lemke 1760749 at http://www.wisebread.com Are You Choosing the Right Fund for Your Portfolio? http://www.wisebread.com/are-you-choosing-the-right-fund-for-your-portfolio <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/are-you-choosing-the-right-fund-for-your-portfolio" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_reading_newspaper_75921495.jpg" alt="Learning if mutual funds are better than ETFs" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>With a market of over $30 trillion, mutual funds are some of the most popular investments. But the $3 trillion ETF (<a href="http://www.wisebread.com/the-10-weirdest-etfs-you-can-buy" target="_blank">Exchange Traded Fund</a>) market is catching up quickly. So, what <em>are </em>ETFs? How do they differ from mutual funds? And are they right for you? Here's what you need to know:</p> <h2>Mutual Funds 101</h2> <p>When you invest in an individual stock, the success of your investment is completely dependent upon the success of that one company. But when you invest in a mutual fund, your money is diversified. It's pooled with many other investors' money and then invested in many companies, based on the design of the fund or the decisions of the fund manager.</p> <p>It's the same with bonds and bond funds, or real estate and real estate funds.</p> <p>Think of an exchange-traded fund as a close cousin of a mutual fund. It, too, manages a pool of money from many investors, spreading it among many investments. But there are some very important differences between ETFs and mutual funds.</p> <h3>ETFs Are Priced Throughout the Day</h3> <p>When you enter an order to purchase a mutual fund, the order will fill at the end of the day, after the value of all of its underlying assets are tallied.</p> <p>ETFs, on the other hand, can be bought and sold throughout the day like stocks. When you enter an order to purchase an ETF, your order will typically be filled very soon after entering the order at a price very close to the price you saw when you placed the order.</p> <p>That's one of the main reasons why ETFs were created. On October 19, 1987, a day now known as &quot;Black Monday,&quot; the U.S. stock market fell by nearly 23%. Mutual fund investors who wanted to sell their shares couldn't until all the damage had been done. Three years later, the first ETF was launched, giving investors all of the diversifying benefits of a mutual fund but the flexibility to buy or sell throughout the trading day.</p> <h3>ETFs Have Lower Expenses</h3> <p>Exchange-traded funds tend to have lower operating expenses than mutual funds, and that lower cost structure is passed along to investors in the form of lower expense ratios. For example, Vanguard's S&amp;P 500 index <em>mutual fund</em> (ticker symbol VFINX) has an expense ratio of .16%. If you invest $1,000 in the fund, $1.60 will go toward fund expenses. That's already very low. However, if you invest in Vanguard's S&amp;P 500 <em>exchange-traded fund</em> (ticker symbol VOO), you'll pay an even lower expense ratio of .05% &mdash; or 50 cents per $1,000 invested.</p> <h3>ETFs Have Lower Minimums</h3> <p>Many mutual funds have minimum initial investment amount requirements. Common amounts range from $250 to $3,000, but some funds require as much as $10,000.</p> <p>With ETFs, the minimum investment amount required is the cost of one share. If you wanted to invest in Vanguard's VFINX mutual fund, you'd need to come up with at least $3,000 for your initial investment. However, getting started with what, in essence, is the ETF version of the same fund, VOO, would cost only about $190 &mdash; the price of one share when this article was written.</p> <h2>Which Is Better?</h2> <p>There are three main factors that can help you decide whether to go with a mutual fund or an exchange-traded fund.</p> <h3>Availability</h3> <p>You may not have a choice. Some 401K plans don't yet include ETFs in the investment options they make available to participants. If that's true with your workplace plan, you'll have to go with one or more of the available mutual funds.</p> <h3>Strategy</h3> <p>While the ETF universe is growing rapidly, there are still many more mutual funds. So, it could be that the investment strategy you're following calls for the use of a particular mutual fund and there are no suitable ETF substitutes.</p> <h3>Cost</h3> <p>If you're following an investment strategy that calls for the use of a particular fund that's available as a mutual fund or an ETF, check on each one's expense ratio. It's very likely that the ETF will cost less, making it the better choice.</p> <h2>One Last Consideration</h2> <p>Some critics say ETFs can get investors in trouble by encouraging more trading. They argue that because the funds can be bought and sold throughout the day, they'll tempt otherwise conservative investors to take undue risk and turn them into roll-the-dice day-traders.</p> <p>But that's like arguing that because <em>some </em>people get into car accidents, <em>no one </em>should be allowed to drive. If you follow the rules of the road for wise investing &mdash; if you're a long-term investor, not a short-term trader &mdash; ETFs can be a very efficient, cost-effective investment vehicle.</p> <p><em>So, which is it for you? Mutual fund or ETF?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/are-you-choosing-the-right-fund-for-your-portfolio">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-weirdest-etfs-you-can-buy">The 10 Weirdest ETFs You Can Buy</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-etfs-can-put-more-money-in-your-pocket-than-mutual-funds">8 Ways ETFs Can Put More Money in Your Pocket Than Mutual Funds</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-things-everyone-should-know-about-the-commodities-markets">8 Things Everyone Should Know About the Commodities Markets</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-investment-mistakes-we-all-make">11 Investment Mistakes We All Make</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment bonds commodities comparisons ETFs exchange traded funds mutual funds portfolio stock market Wed, 27 Jul 2016 09:30:36 +0000 Matt Bell 1757851 at http://www.wisebread.com 7 Money Moves to Make as Soon as You Conquer Debt http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-money-moves-to-make-as-soon-as-you-conquer-debt" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_happy_sunset_79384959.jpg" alt="Woman making moves after conquering debt" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Congratulations &mdash; you're debt free! Now what?</p> <p>The road to debt elimination was long and treacherous, but just because the black cloud of lingering bills is no longer hanging over your head, that doesn't mean your financial house is in order. It's in better shape, sure, but you've still got a ways to go. To continue working toward that goal, here are a few smart moves you should make as soon as you get out of the red:</p> <h2>1. Rearrange and Trim Your Budget</h2> <p>Your top priority when getting out of debt is to not get back into debt. To accomplish that, you'll need to make changes to your spending and savings habits. You'll also need to revisit your budget and rearrange your priorities. Now that you don't have credit card or loan payments bleeding you dry every month, you'll have more disposable income &mdash; and you need to decide what you'll do with it to improve your quality of life and set yourself up for the future. Cut out anything that's unnecessary: Maybe it's the cable that you don't watch much of, the gym membership you don't use, or subscriptions to services you can live without. Whatever is it, cut the fat and don't look back.</p> <h2>2. Get Back to Building Your Emergency Fund</h2> <p>If you've been digging yourself out of a negative-money pit, chances are you don't have much of an emergency fund &mdash; and that needs to change ASAP. Building an emergency fund is the best way to avoid a potential debt scenario in the future. You'll be able to draw from that account to pay off life's little surprises in full, so you're not constantly treading water every time something unexpected happens.</p> <p>&quot;I recommend having an emergency fund saved up equal to six months' worth of expenses,&quot; says financial planner Russell Robertson of Alidade Wealth Partners in Atlanta, GA. &quot;This will give you time to get back on your feet if something unforeseen happens without completely disrupting everything in your life.&quot;</p> <h2>3. Check in on Your Credit Situation</h2> <p>Brace yourself. If you've been battling debt for an extended period of time &mdash; especially if you've only being sending in minimum payments &mdash; your credit situation is likely less than ideal. The good news, however, is that you're in the clear now (debt-wise, anyway), and this is the best time to <a href="http://www.wisebread.com/what-does-your-credit-score-mean-good-bad-or-excellent?ref=internal">start rebuilding your credit</a>.</p> <p>Having a solid credit score puts you in a strong position when you need to finance a purchase, like a house or car, or apply for a new line of credit. It's always a good idea to know where you stand with credit and take steps to improve it.</p> <h2>4. Max Out Your Matching-Dollar Opportunities for Retirement</h2> <p>Like your emergency fund, contributions to your 401K and IRA were probably low (or perhaps even nonexistent) while you concentrated on paying down your debt. With more funds freed up now, it's important to start concentrating on your future &mdash; especially your retirement goals &mdash; and that includes maxing out dollar-matching opportunities to take full advantage of free money.</p> <p>&quot;401K plans in 2016 have a contribution limit of $18,000 a year, plus an extra $6,000 for people over 50, so with no debt to pay, you might have the opportunity to reach that limit now,&quot; says financial planner and investment adviser Jaycob Arbogast of Arbogast Advisers. &quot;Similarly, an IRA has a $5,500 limit for people under 50 and a $6,500 limit for people 50-plus, so maxing out those plans might be a good idea too. For example, with a 6% return, adding an extra $5,000 each year to your retirement savings from age 50 to 60 could add an additional $65,000 to your retirement savings. That's a great boost that someone in debt might not be able to maintain.&quot;</p> <h2>5. Start Investing With Long-Term Returns in Mind</h2> <p>Personally, I recommend investing in real estate, but what you invest in is up to you, so long as you're investing. Outside of your emergency fund, your money should never sit in a savings account earning fractions of pennies. Instead, you'll be better off putting that money in places that promise bigger returns over the long term, so you can meet your savings goals sooner and continue making more investments for (hopefully) a more prosperous life.</p> <p>Alternatively, Robertson recommends the stock market.</p> <p>&quot;If your budget still has room for more saving, put that money to work by investing in the markets,&quot; he advises. &quot;Exchange-traded funds (ETFs) are a great way to get diversified, low-cost exposure, and many online brokerages will offer commission-free ETF options as well.&quot;</p> <h2>6. Put Money Back Into the Investments You Already Have &mdash; Like Your Home</h2> <p>For many people, their homes are their biggest investments. To ensure that investment pays off the way you want and need it to, you have to maintain it. Thus, when you've paid off your debt, start thinking about home improvement projects that will increase value. Just be careful that you're not taking on projects that cost more than the house is worth. The last thing you need is to dump your savings into your home if the project doesn't enhance the house enough to make it worthwhile in the long run.</p> <h2>7. Open a Money Market Account for Higher Interest on Savings</h2> <p>If you have a substantial amount of savings in your emergency fund &mdash; and you should &mdash; that money shouldn't be in a traditional savings account. Contact your bank, or research others, to find savings accounts that offer the best interest rates, like money market accounts or high yield savings. Bottom line, there's absolutely no reason you shouldn't be getting the most bank for your buck, especially where savings are concerned.</p> <p>Robertson agrees, and in this particular case, rescinds his recommendation to invest in stocks.</p> <p>&quot;If there is something specific you are saving up for &mdash; a celebratory trip to Europe? A wedding? &mdash; within the next two to three years, I would recommend keeping that money out of the stock market,&quot; he says. &quot;Instead, consider a money market account or CD from an online bank. In many cases you can get close to 1% interest right now on cash that is still guaranteed up to FDIC limits (currently $250,000). In fact, this is a good idea for that emergency fund as well &mdash; something that earns interest and is separate from your everyday checking account.&quot;</p> <p><em>What else should the newly debt-free do with their money?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-to-make-before-you-start-investing">8 Money Moves to Make Before You Start Investing</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-biggest-myths-about-investing">The 10 Biggest Myths About Investing</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-pay-down-debt-first-or-invest">Should You Pay Down Debt First or Invest?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-reasons-why-a-roth-ira-may-be-better-than-your-401k">4 Reasons Why a Roth IRA May be Better Than Your 401(k)</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-times-its-okay-to-delay-retirement-savings">5 Times It&#039;s Okay to Delay Retirement Savings</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Debt Management Investment 401k advice credit score emergency funds ETFs home improvements IRA money moves retirement stock market Fri, 15 Jul 2016 09:00:17 +0000 Mikey Rox 1752364 at http://www.wisebread.com You're Wasting Up to $42,532 by Not Investing Your Gasoline Savings http://www.wisebread.com/youre-wasting-up-to-42532-by-not-investing-your-gasoline-savings <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/youre-wasting-up-to-42532-by-not-investing-your-gasoline-savings" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000074872237_Large.jpg" alt="she can invest the money she saves at the pump" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Gas prices are as low as they have been in a long time. In April 2016, the U.S. Energy Information Administration (EIA) forecasted that the average full price of regular grade gasoline will be lower in July 2016 (<a href="http://www.eia.gov/forecasts/steo/">$2.07 per gallon</a>) than at the same time last year ($2.79 per gallon).</p> <p>That means the average American will <a href="http://money.cnn.com/2016/02/10/news/economy/gas-savings/">save about $1,000</a> on gas this year. But unless you're banking those gas savings, you're wasting an opportunity to improve your financial situation. That's because money saved and invested compounds over time, and a mere $1000 could turn into tens of thousands, instead.</p> <p>Here is why you're wasting up to $42,532 by not making smart use of your gas savings.</p> <h2>Make an Investment</h2> <p>Among the best pieces of <a href="http://www.wisebread.com/the-5-best-pieces-of-financial-wisdom-from-warren-buffett">financial wisdom from Warren Buffett</a> is, &quot;someone's sitting in the shade today because someone planted a tree a long time ago.&quot; Whether it's by dining out more often or buying more clothes, spending that extra $1,000 per year instead of saving or investing it is a decision that your future self will regret dearly.</p> <p>Today is the best day to start an investment, even if it's with a small amount. If you were to invest $83.33 every month (about $1,000 a year) for 20 years in an online high-yield savings account with a 1% annual interest rate, you would have a total of $22,137.21 at the end of the 20-year period.</p> <p>With such a long-term investing period, you would do even better with alternate forms of investment. For example, if you were to make the same string of deposits in an investment account paying a 4% annual rate of return, your investment would be worth $30,418.19 at the end of the 20-year period.</p> <p>Of course, you would do best by putting that series of monthly $83.33 deposits in an exchange-traded fund (ETF), which is a marketable security tracking a market index, such as the S&amp;P 500 or Russell 2000 indexes. The <a href="http://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp">historical average annual return</a> for the S&amp;P 500, adjusted for inflation is around 7%. So, if you were to put $83.33 every month in an ETF tracking the S&amp;P 500 for 20 years, you would end up with $42,532.14 after 20 years before applicable fees or taxes.</p> <p>Making a consistent monthly deposit over a long period of time allows you to leverage the power of interest compounding, making the most of your gas savings.</p> <h2>Pay Down High-Interest Debt</h2> <p>Of course, you may want more immediate gratification with your gas savings. By using your gas savings to pay more than your minimum monthly payment on high interest credit cards, you can potentially save up to a few thousands of dollars every year.</p> <p>Let's assume that you have a total balance of $4,534 on a credit card with a 25.24% annual percentage rate (APR) and that your monthly minimum payment is $140.56. By making only the minimum payment, you wouldn't pay off the total card balance for 18 years, and would end up paying an estimated total of $12,592!</p> <p>By just increasing your monthly payment an extra $40.44 (about half of the estimated gas savings), you would pay off the credit card in only three years and save an estimated $6,081.</p> <p>Another reason to pay down those high-interest credit cards is that those interest payments aren't tax deductible. Unlike your interest payments on mortgages, home equity loans, and student loans, your interest payments on credit cards or auto loans offer no tax advantage.</p> <p>See also: <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?ref=seealso">How to Use a Balance Transfer to Save on Credit Card Interest</a></p> <h2>The Bottom Line</h2> <p>Gas prices will eventually go back up. For now, the EIA predicts that the average retail price for U.S. regular grade gas will be around the $2 mark until December 2017. Make the most out of your gas savings for the next year by investing the extra cash or paying down your high-interest debt.</p> <p><em>What are other ways to make the most of your gasoline savings?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/youre-wasting-up-to-42532-by-not-investing-your-gasoline-savings">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt">7 Money Moves to Make as Soon as You Conquer Debt</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-choosing-the-right-fund-for-your-portfolio">Are You Choosing the Right Fund for Your Portfolio?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-making-the-biggest-investment-risk-of-all">Are You Making the Biggest Investment Risk of All?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/a-beginner-s-guide-to-investing-in-frontier-markets">A Beginner’s Guide to Investing in Frontier Markets</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-weirdest-etfs-you-can-buy">The 10 Weirdest ETFs You Can Buy</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment compound interest debt ETFs gas prices price per gallon savings stock market Mon, 02 May 2016 09:30:25 +0000 Damian Davila 1700679 at http://www.wisebread.com A Beginner’s Guide to Investing in Frontier Markets http://www.wisebread.com/a-beginner-s-guide-to-investing-in-frontier-markets <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/a-beginner-s-guide-to-investing-in-frontier-markets" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_reading_newspaper_000090680889.jpg" alt="Man learning about frontier markets and how to invest" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>For many years, investors were able to capitalize in the accelerated growth of emerging markets, such as Brazil and China. However, the <a href="http://www.wisebread.com/5-ways-greece-and-chinas-economic-problems-might-impact-you">economic problems in Greece and China</a> have demonstrated that some emerging market economies are experiencing a slower rate of growth and, in some cases, facing substantial economic roadblocks.</p> <p>Seeking alternatives for emerging markets, some investors are turning to so-called &quot;frontier markets.&quot; While less developed than emerging nations, frontier market nations are experiencing such accelerated growth that they may provide aggressive returns to investors willing to take on the risk.</p> <h2>What Are Frontier Markets?</h2> <p>While there are many lists detailing what countries are considered frontier markets, the <a href="http://www.msci.com/market-classification">MSCI market classification</a> is the most widely accepted. The MSCI Frontier Markets Index is made of 120 stocks from 23 frontier economies, including Argentina, Lithuania, Nigeria, and Sri Lanka. With 500 stocks from 34 frontier markets, the <a href="http://us.spindices.com/indices/equity/sp-frontier-bmi-us-dollar">S&amp;P Frontier BMI</a> is another index that provides a comprehensive benchmark of the frontier market economy as a whole.</p> <p>Frontier markets are characterized by their high volatility. For example, the MSCI Frontier Markets Index had a 72.74% annual gain in 2005 &mdash; and a 54.10% annual loss in 2008. Investors seeking potentially high returns in frontier markets need to understand that they will be facing higher risks, such as large currency fluctuations, political instability, and unfamiliar &mdash; or relaxed &mdash; regulatory systems.</p> <h2>Why Frontier Markets Matter</h2> <p>Despite the higher risks, many companies are investing in these markets for the long run. One example is the Coca-Cola Company.</p> <p>Coca-Cola has substantial investments in heavy soda-drinking nations in developed markets, such as the United States and Belgium, and emerging ones, such as Mexico and Brazil. However, frontier nations are the ones promising the most growth for the beverage company.</p> <p>In 2014, Argentinians consumed the most soft drinks per capita in the world, a whopping <a href="http://www.npr.org/sections/goatsandsoda/2015/06/19/415223346/guess-which-country-has-the-biggest-increase-in-soda-drinking">154.6 liters</a>. That's one liter per person more and 18 liters per capita more than U.S. drinkers (#2 on the list) and Mexican drinkers (#4 on the list) purchased in the same year. This explains why Coca-Cola's CEO pledged to <a href="http://www.bloomberg.com/news/articles/2016-01-22/argentina-may-lure-20-billion-in-investment-in-2016-macri-says">invest $1 billion in Argentina</a> over a four-year period starting in 2016.</p> <p>Vietnam is another frontier market of interest to Coca-Cola. Over the 2013&ndash;2015 period, the southeast Asian nation was one of the <a href="http://www.coca-colacompany.com/stories/share-a-coke-in-vietnam-continues-the-momentum-with-emoticons/">world's fastest growing markets</a> for the brand. It has been estimated that the consumption of soft drink liters per capita in Vietnam increased by over 105% over the 2009&ndash;2014 period.</p> <p>Just like Coca-Cola, many other domestic and international companies are interested in frontier market nations. Even governments recognize the importance of increasing trade relations with up-and-raising developing nations. For example, the Trans-Pacific Partnership (TPP) trade agreement signed in February 2016 aims to lower trade barriers between 12 nations, including Vietnam.</p> <h2>How to Invest in Frontier Markets</h2> <p>For the average individual investor, buying stocks in individual companies trading in frontier market stock exchanges may prove impractical for several reasons.</p> <ul> <li>Trading volume for frontier market stocks is generally lower than that for U.S. stocks, which produces more volatility and prevents efficient market transactions.<br /> &nbsp;</li> <li>Finding &quot;winners&quot; is very challenging for individual investors without connections in those markets. Many investors can track the price of Bao Viet Holdings, the largest insurance company in Vietnam and the seventh largest listed company by market capitalization in that nation, but very few can name stocks in Estonia or Kenya.<br /> &nbsp;</li> <li>Less-developed nations are still working on implementing international financial accounting standards, putting investors in the dark about the latest developments.</li> </ul> <p>Therefore, the average investor has three main ways to invest in frontier markets.</p> <h3>1. U.S Companies Focusing on Frontier Markets</h3> <p>First, an investor could invest in U.S.-traded companies that have strong interests in frontier markets. Besides Coca-Cola [<a href="http://finance.yahoo.com/q?d=t&amp;s=KO">NYSE:KO</a>], Facebook, Inc. [<a href="http://finance.yahoo.com/q?s=FB">NASDAQ:FB</a>], and Apple, Inc. [<a href="http://finance.yahoo.com/q?d=t&amp;s=AAPL">NASDAQ:AAPL</a>] are other companies eyeing those fast-growing nations.</p> <ul> <li>Facebook is working hard on increasing its presence in frontier nations. Through its <a href="https://code.facebook.com/posts/1556407321275493/building-for-emerging-markets-the-story-behind-2g-tuesdays/">2G Tuesdays initiative</a>, Facebook engineers are learning how to adapt the features of the social network app to work seamlessly even on a 2G Internet network. Also, Facebook is offering <a href="https://info.internet.org/en/story/free-basics-from-internet-org/">free Internet access</a> to cellphone users in Kenya, Bangladesh, and Pakistan and working on reaching similar agreements with cellphone carriers in other frontier markets.<br /> &nbsp;</li> <li>Trying to diversify its Asian portfolio, Apple opened a subsidiary company in Vietnam back in 2015 with an investment of <a href="http://www.reuters.com/article/us-apple-vietnam-idUSKCN0SU1UZ20151105">15 billion Vietnamese dong</a> (over $670,000). In 2014, sales of Apple's products in Vietnam grew five times faster than in India. Beyond Vietnam, Apple is looking to expand in other frontier markets.</li> </ul> <h3>2. Frontier Market Exchange-Traded Funds (ETFs)</h3> <p>Frontier market ETFs allow investors to include frontier stocks in their investment portfolios. For example, the iShares MSCI Frontier 100 [<a href="http://quotes.wsj.com/etf/FM">NYSE Arca:FM</a>] tracks the MSCI Frontier Markets 100 Index and holds over $408.70 million in net assets as of March 2016. By meeting minimum liquidity standards, ETFs allow investors to liquidate their positions with more ease when necessary. (See also: <a href="http://www.wisebread.com/10-questions-to-ask-before-you-sell-a-stock-or-a-fund?ref=seealso">10 Questions to Ask Before You Sell a Stock or a Fund</a>)</p> <h3>3. Mutual Funds Focusing on Frontier Markets</h3> <p>Structured and maintained to meet the demand of investors interested in frontier markets, mutual funds focusing on frontier markets seek to produce capital gains from stocks traded in less developed exchanges. Some examples are the Templeton Frontier Markets [<a href="http://finance.yahoo.com/q?s=TFMAX">MUTF:TFMAX</a>] and the Wasatch Frontier Emerging Small Countries Fund [<a href="http://finance.yahoo.com/q?d=t&amp;s=WAFMX">MUTF:WAFMX</a>].</p> <p>Investors who are particularly bullish in individual nations should consider ETFs and mutual funds focusing on specific frontier nations.</p> <h2>The Bottom Line</h2> <p>To compensate for slower growth in developed and emerging markets, investors can look into frontier markets. By investing in U.S. publicly traded companies, ETFs, and mutual funds focusing on frontier markets, individual investors can access these markets with better liquidity and more diversification. However, an individual investor should assess applicable fees for such investment vehicles, understand the higher risk involved in such investments, and limit the exposure to a number that is consistent with the investor's overall objective.</p> <p><em>How are you investing in frontier markets?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/a-beginner-s-guide-to-investing-in-frontier-markets">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt">7 Money Moves to Make as Soon as You Conquer Debt</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-choosing-the-right-fund-for-your-portfolio">Are You Choosing the Right Fund for Your Portfolio?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/youre-wasting-up-to-42532-by-not-investing-your-gasoline-savings">You&#039;re Wasting Up to $42,532 by Not Investing Your Gasoline Savings</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-weirdest-etfs-you-can-buy">The 10 Weirdest ETFs You Can Buy</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-things-everyone-should-know-about-the-commodities-markets">8 Things Everyone Should Know About the Commodities Markets</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment emerging nations ETFs frontier markets global economies high risk stock market Thu, 21 Apr 2016 09:01:08 +0000 Damian Davila 1691584 at http://www.wisebread.com 8 Things Everyone Should Know About the Commodities Markets http://www.wisebread.com/8-things-everyone-should-know-about-the-commodities-markets <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-things-everyone-should-know-about-the-commodities-markets" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/cows_000066842465.jpg" alt="Everyone learning things about commodities markets" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It's common in the investment world to hear a lot about commodities. These are things like oil, soybeans, gold, and even cattle, which can be bought and sold on exchanges, similar to stocks.</p> <p>The price of commodities plays a big role in our economy, from how much it costs to fuel our cars, to the price of a gallon of milk. It's possible to earn money trying to predict how the price of these commodities will move, although it can be risky.</p> <p>Investing in commodities is not for beginners, but it's helpful to know some of the basics of how they work and how they may impact other parts of your portfolio &mdash; and even your day-to-day life.</p> <h2>1. There Are Four (or Three) Basic Groups of Commodities</h2> <p>Commodities can be lumped together in an infinite number of ways, but are generally placed in four groups:</p> <ul> <li>Energy (Things like oil and natural gas)</li> <li>Metals (Gold, silver, platinum, zinc, etc.)</li> <li>Livestock and meat (Cattle, pork bellies, hogs, etc.)</li> <li>Agricultural (Corn, soybeans, coffee, and so forth)</li> </ul> <p>Some people like to group agricultural and livestock together. But no matter how they are categorized, it's possible to invest in certain groups of commodities through funds and ETFs that track specific commodity exchanges.</p> <h2>2. The Chicago Mercantile Exchange Is the Place</h2> <p>We all know the New York Stock Exchange and NASDAQ as the places to buy and sell traditional stocks. But for commodities, the world's largest exchange is the Chicago Merc or CME, located on Wacker Drive. About 80% of the trades on the CME are done electronically, but a portion still come from &quot;open outcry&quot; in which traders stand in a &quot;pit&quot; and call out orders, prices, and quantities.</p> <h2>3. They Are Volatile</h2> <p>If you're looking for slow and steady growth, commodities aren't for you. In fact, volatility is pretty much the norm, and it's gotten worse in recent years. A report from consulting firm Deloitte said that several commodity groups including oil, natural gas, coffee, and copper, have seen price increases of 30% to 60% over a three to six month period. And between 1997 and 2012, there were far more extreme price changes than the previous 15 years.</p> <h2>4. Commodities Are Impacted by the Dollar</h2> <p>Just about every aspect of the world economy is impacted by currency values in some way, but commodity prices are especially sensitive. That's because commodities are often priced in dollars around the world due to faith in the American economy. In the U.S., a strong dollar usually means low prices for commodities. And the inverse is true; it will take more dollars to buy commodities when the value of the dollar goes down, so commodity prices go up as well.</p> <h2>5. Weather and World Events Can Affect Commodity Prices</h2> <p>Commodity investors often find themselves becoming experts in meteorology and world affairs, because of the various things that can impact commodity prices. Maybe it's a drought in the Southeast United States that has taken out soybean crops. Or perhaps the threat of a hurricane that could temporarily shut down oil refineries. Everything from floods to flies to civil war can impact the supply of certain goods, thus impacting prices.</p> <h2>6. It's Okay for Your Portfolio to Have Commodities, But Not Too Many</h2> <p>Many financial advisers suggest holding commodities along with stocks, bonds, and real estate as part of a diverse portfolio, particularly if your nest egg is large. But keep in mind that commodities don't pay dividends or interest, and very few have a terrific track record of gains over the long term. Charles Rotblut of the American Association of Individual Investors told the Wall Street Journal that most investors should only consider investing in commodities after having the basic allocations down. In the same publication, Rick Ferri, an advocate of low-cost index fund and ETF investing, called commodities &quot;dead money&quot; and said most people would be better off without them.</p> <h2>7. You Can Invest in the Future With Commodities (Sort Of)</h2> <p>Investors who want to avoid some of the risk of commodity price fluctuations can buy something called a &quot;futures contract,&quot; which is essentially an agreement to buy or sell a commodity at a certain price at a certain date. Investors who are sellers get to lock in prices this way. Investing with commodities futures is not for inexperienced investors, as it requires a certain amount of cash up front and often involves the borrowing of money, or leverage. It is easy to lose a lot of money in a short amount of time this way.</p> <h2>8. It's Possible to Have Commodities Exposure Without Owning Commodities</h2> <p>If you don't feel comfortable trading commodities futures or owning commodity ETFs, you can buy shares of stock in companies that work with those commodities. For instance, an investor can buy shares of a company involved in gold mining, or in producing equipment for oil fields. By going this route, it's possible to diversify your portfolio with exposure to commodities, but avoid some of the volatility.</p> <p><em>Are there any commodities in your portfolio?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/8-things-everyone-should-know-about-the-commodities-markets">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-choosing-the-right-fund-for-your-portfolio">Are You Choosing the Right Fund for Your Portfolio?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt">7 Money Moves to Make as Soon as You Conquer Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/save-your-retirement-by-avoiding-these-10-risky-investments">Save Your Retirement by Avoiding These 10 Risky Investments</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/a-beginner-s-guide-to-investing-in-frontier-markets">A Beginner’s Guide to Investing in Frontier Markets</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/youre-wasting-up-to-42532-by-not-investing-your-gasoline-savings">You&#039;re Wasting Up to $42,532 by Not Investing Your Gasoline Savings</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment agriculture commodities ETFs Food futures gold oil stock market volatility Thu, 14 Apr 2016 10:01:03 +0000 Tim Lemke 1687440 at http://www.wisebread.com 4 Ways "Boring" Investments Make Life Exciting http://www.wisebread.com/4-ways-boring-investments-make-life-exciting <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-ways-boring-investments-make-life-exciting" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_reading_newspaper_000051430362.jpg" alt="Man learning ways boring investments make life exciting" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>To jump-start 2016, I resolved to get physically fit by joining DailyBurn with celebrity trainer Bob Harper. Based on my target goals, the program began with BlackFire, a strategic fitness program of diverse routines designed to make your muscles burn and push your body beyond its limits. But exotic training programs like these can deplete you and only work when balanced by proper nutrition and diet.</p> <p>The same is true for investing &mdash; going too exotic is not good for your portfolio and can throw you off balance. Mixing things up by adding in some &quot;boring&quot; investments can offer steady growth and offset the possibility of market volatility. And if you're like most of us, keeping and growing your money can provide more real excitement than any fad or risky investment.</p> <p>Here are four ways &quot;boring&quot; investments make life more exciting.</p> <h2>1. Less Market Volatility</h2> <p>The markets are down these days and some investors are in a frenzy. But instead of abandoning ship, like many people do, try balancing your portfolio with asset classes that carry less risk. This is the number one way boring investments are more exciting &mdash; because during times of panic, you don't have to. Review your allocation strategy accordingly.</p> <p>Another plus: When you avoid assuming unnecessary investment risks, you'll have more money on hand to take calculated risks and profit when riskier investments fall.</p> <h2>2. Cost-Efficient</h2> <p>Boring investments cost less due to their lower total expense ratios. Traditional mutual funds are actively managed and indexed mutual funds have administrative fees costing slightly more than ETFs, but both are substantially more cost-efficient in comparison to individual stocks. Morningstar Investment Research estimates the average asset-weighted mid-growth index mutual fund costs 0.39%, while ETFs average 0.23%. (See also: <a href="http://www.wisebread.com/the-top-5-etfs-you-should-buy-now?ref=seealso">The Top 5 ETFs You Should Buy Now</a>)</p> <p>This cost efficiency adds up over time, saving you thousands of dollars over a lifetime of investing. And you know what's exciting? Having more money at the end of the day.</p> <h2>3. Tax-Efficient</h2> <p>Maximizing your portfolio's tax efficiency can save you big bucks. As an example, one common strategy to offset capital gains is tax-loss harvesting, which offsets profits with tax deductions on losses (up to $3,000 annually). Another &quot;boring&quot; investment that can help you save on taxes is municipal bonds. The income payouts from muni bonds are exempt from federal, state, and city tax. And &quot;boring&quot; investments like ETFs and mutual funds have less turnover since they are passively managed, making them tax-efficient.</p> <p>(For 2016, the maximum capital gains tax is 20%. How much you pay depends on your income. If you're in the 10% to 15% marginal tax bracket, or a person who has earned below $50,400 (head of household) or $75,300 (joint filers), you will owe zero tax on income derived from the sale of securities.)</p> <h2>4. Hands-Free Investments</h2> <p>Don't find investing all that exciting, in general? Then consider hands-off investments such as target-date ETFs or mutual funds which free you to do whatever really excites you with your time. Or, consider using a low-cost robo-advisor to manage your money for you. Then all you have to do is sit back and watch your money grow. (See also: <a href="http://www.wisebread.com/should-you-trust-your-money-with-these-4-popular-financial-robo-advisers?ref=seealso">Should You Trust Your Money With These 4 Popular Financial Robo-Advisers?</a>)</p> <p><em>What boring investments do you find thrilling?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/qiana-chavaia">Qiana Chavaia</a> of <a href="http://www.wisebread.com/4-ways-boring-investments-make-life-exciting">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-choosing-the-right-fund-for-your-portfolio">Are You Choosing the Right Fund for Your Portfolio?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-duel-etfs-vs-mutual-funds">The Duel: ETFs vs. Mutual Funds</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-etfs-can-put-more-money-in-your-pocket-than-mutual-funds">8 Ways ETFs Can Put More Money in Your Pocket Than Mutual Funds</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-investment-mistakes-we-all-make">11 Investment Mistakes We All Make</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment ETFs low risk market volatility municipal bonds mutual funds stability Mon, 01 Feb 2016 14:00:04 +0000 Qiana Chavaia 1647738 at http://www.wisebread.com 9 Tax-Friendly Ways to Save Beyond Your Retirement Fund http://www.wisebread.com/9-tax-friendly-ways-to-save-beyond-your-retirement-fund <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-tax-friendly-ways-to-save-beyond-your-retirement-fund" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/piggy_bank_cash_000005176239_2.jpg" alt="Learning tax-friendly ways to save beyond retirement fund" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>So you've been taking advantage of your company's 401K plan and have also been placing money in an individual retirement account (IRA). In fact, you've been such a great saver that you've now hit the limit on what you can contribute annually to these tax-advantaged accounts. What to do now?</p> <p>Well, first off, give yourself a huge pat on the back. You've been saving a ton, and have managed to avoid paying too much tax along the way.</p> <p>If you still have money you'd like to stash away, but don't want to give too much to the tax man, there are other investment opportunities for you. Take a look at these nine options for super savers like yourself.</p> <h2>1. 529 Plans</h2> <p>If you have children who may one day attend college, it's a great idea to save for their education using a 529 college savings plans. These plans, which are offered by individual states, have a variety of tax benefits. In most cases, you can place money in an investment account and allow it to grow tax free as long as you use the funds to pay for college. You can also often get a tax deduction on contributions.</p> <h2>2. ESA Coverdell Accounts</h2> <p>These work in similar fashion to 529 plans and Roth IRAs, in that money can be invested and then withdrawn tax free. Coverdell accounts have lower account maximums than 529 plans, but often have more investment options and the money can be used for any education expense, including grade school and high school. The maximum annual contribution per beneficiary is $2,000.</p> <h2>3. Municipal Bonds</h2> <p>It's good to have some bonds in your investment portfolio, and here's a way to help out your state, city, or county raise money for its capital expenditures. &quot;Muni&quot; bonds are usually exempt from taxes, so you get to keep more of your investment. These days, you can buy bonds directly, or get a mix of bonds through a bond mutual fund or ETF.</p> <h2>4. Real Estate</h2> <p>When you buy a house or other piece of property, mortgage interest is often tax deductible. If you sell a home, there is often an exclusion on capital gains up to $500,000 if you're a married couple filing jointly.To take advantage of these breaks, the property must be used as a first or second home in most cases. Also, be sure to itemize your deductions when filing your taxes.</p> <h2>5. Annuities</h2> <p>The idea behind an annuity is that you make investments, and then the annuity makes payments to you at a later date, or a series of dates. The investments grow tax-deferred, and earnings are taxed at your regular income rate. So if you think you'll be in a lower tax bracket upon retirement, you'll save money. Unlike 401K and IRA plans, there are no contribution limits to annuities.</p> <h2>6. Master Limited Partnerships</h2> <p>More experienced investors may find some great tax savings and solid income from MLPs. An individual can buy shares of an MLP just like a stock. Most MLPs are related to energy production, and allow investors to essentially buy &quot;units&quot; of a gas pipeline, or something similar. Income from MLPs are taxed as &quot;return of capital,&quot; so taxes can be deferred. (In essence, you only pay tax when you sell your units.) The taxes on MLPs are complex, but if you are okay with the mountain of paperwork, you may save some money. It's wise to talk to an accountant to get a full understanding of the tax implications before investing in an MLP.</p> <h2>7. Whole Life Insurance</h2> <p>I am not a big fan of whole life insurance as an investment, but there can be some tax advantages to having a policy. It's also an okay option for high earners who have maxed out other accounts. Whole life policies pay a death benefit, which is not usually taxed. Many policies also offer tax-free dividends. If you're interested in whole life insurance, make sure you're capable of paying the annual premiums. And do your homework to make sure that the dividends and growth potential outweigh many common downsides, such as high fees and commissions.</p> <h2>8. Index Funds</h2> <p>If you maxed out the contributions to your retirement plans, any additional investments you want to make will probably have to go into a taxable brokerage account. But that doesn't mean you can't find ways to keep your tax burden relatively low. Index funds are mutual funds that track a specific index, such as the S&amp;P 500. Generally speaking, index fund managers don't have to do a lot of buying and selling, so they aren't passing on a lot of capital gains to you. You'll still have to pay tax when you cash out, so they aren't really &quot;tax advantaged&quot; in the classic sense. But you'll be saving money along the way.</p> <p>See also: <a href="http://www.wisebread.com/3-steps-to-getting-started-in-the-stock-market-with-index-funds?ref=seealso">How to Get Started with Index Funds</a></p> <h2>9. ETFs</h2> <p>Exchange-traded funds are like mutual funds, in that they usually track a specific index or market sector. But they are more tax efficient than mutual funds, because investors only pay capital gains when they sell the ETF. You won't avoid tax altogether unless the ETF is part of a retirement plan, but your liability will be as low as possible. (See also: <a href="http://www.wisebread.com/8-ways-etfs-can-put-more-money-in-your-pocket-than-mutual-funds?ref=seealso">8 Ways ETFs Are a Smart Investment</a>)</p> <p><em>Where are you stashing your savings?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/9-tax-friendly-ways-to-save-beyond-your-retirement-fund">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-financial-moves-you-will-always-regret">9 Financial Moves You Will Always Regret</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/optimize-your-ira-and-401k">Optimize Your IRA and 401(k)</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-finance-tips-you-wish-you-could-tell-your-younger-self">11 Finance Tips You Wish You Could Tell Your Younger Self</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-surprising-ways-the-rich-get-richer">5 Surprising Ways the Rich Get Richer</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-choose-a-roth-401k-or-a-regular-401k">Should You Choose a Roth 401k or a Regular 401k?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance 401k 529 plans ETFs investing MLPs real estate Roth IRA taxes Tue, 03 Nov 2015 13:15:45 +0000 Tim Lemke 1603574 at http://www.wisebread.com 11 Investment Mistakes We All Make http://www.wisebread.com/11-investment-mistakes-we-all-make <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/11-investment-mistakes-we-all-make" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/buy_sell_dice_000034067732.jpg" alt="People making investment mistakes we all make" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Anyone who has ever made money by investing has probably also made their share of blunders. In fact, it's the blunders along the way that have probably led to some great lessons learned.</p> <p>If you've made <a href="http://www.wisebread.com/9-crazy-investments-of-the-rich-and-famous">mistakes with your investments</a>, you are not alone. Here are some of the most common investing mistakes we all make from time to time.</p> <h2>1. We Have No Plan</h2> <p>We start buying stocks and mutual funds without any real idea of our goals, timeline, or risk tolerance. We trade on a whim, with no sense of how each investment fits with our overall portfolio. Eventually, we'll become more organized and we'll be able to invest with purpose, simplicity, and success.</p> <h2>2. We Buy and Sell at a Bad Time</h2> <p>We've all seen the market go down and have panicked. We unload quality stocks that later rise back up to new heights. We also buy popular stocks at inflated prices, only to see them come back to earth. Over time, we learn that selling high and buying low is a much more profitable approach.</p> <h2>3. We Don't Invest Enough</h2> <p>When we start investing, we are cautious and too conservative. Perhaps we're young and not too thrifty and fail to put enough aside. We don't understand the power of compounding returns over time. We'll kick ourselves when we're 55 because we wish we'd have saved more when we were 25.</p> <h2>4. We're Too Aggressive</h2> <p>We're overloaded on tech stocks and hot biopharmaceutical companies. We go after wacky investments like leveraged ETFs and embrace volatility. We might make money quick, but we're just as likely to lose it fast. We will learn the hard way that slow and steady growth is a more reasonable goal.</p> <h2>5. We're Too Conservative</h2> <p>We're terrified of losing money, so we invest in bonds and cash, even though we're 35 years from retirement. We get giddy over a 2% return from a CD. Over time we will learn that it's impossible to get rich without taking some calculated risks.</p> <h2>6. We Don't Pay Attention to Fees</h2> <p>We buy a mutual fund or ETF because we think it's in line with our investment goals, but fail to notice that we're losing a full percent or more from expenses. There are management fees, account fees, transaction fees and a variety of other costs that are passed onto us, eating into our investment returns. Eventually, we'll learn to find those solid, well-performing funds and ETFs with super-low expense ratios.</p> <h2>7. We Don't Pay Attention to Taxes</h2> <p>We're ignorant of the advantages of Roth IRAs, which allow us to see investments grow tax free, and 401(k) plans, which let us defer taxes on investments and reduce our taxable income now. We're oblivious to the impact of capital gains taxes, buying and selling frequently in taxable accounts. Eventually, we'll become more tax savvy and our investments will rise in value faster.</p> <h2>8. We Don't Pay Attention to Commissions</h2> <p>We buy and sell shares of stock frequently, unaware that we may be paying big bucks to a stock broker when we could trade online for less than $10 a trade. But even when we do discover a discount broker, we buy and sell so often and just a few shares at a time, so even small commissions make a dent in our portfolio. We will learn over time to buy and sell with more money so that commissions don't have the same impact &mdash; or to find investments that trade commission-free.</p> <h2>9. We Watch Too Much TV</h2> <p>We are initially mesmerized by the financial pundits on CNBC and other financial news networks. We act on every stock tip from Jim Cramer and every piece of speculation about what the Fed will do. Soon, we'll learn to separate the sound analysis from the noise, and have confidence in our own ability to execute a long-term investment strategy.</p> <h2>10. We Check Our Investments Too Often</h2> <p>We watch the day-to-day performance of the markets, and allow the ups and downs impact our emotions. We see a stock dip 2% in a day and feel like punching a wall. We see it rise 3% and want to throw a party. We will conclude that this is no way to live, and will instead feel content checking in once a week, or so.</p> <h2>11. We Forget to Rebalance</h2> <p>We think we have a great investment plan, with a solid mix of stocks in various sectors and asset classes. It's all set up for optimal returns, except that we fail to pay attention as the investment mix goes off kilter. Now we're too heavily invested in one sector and don't have enough exposure in another. This offers the lesson that just because our contributions are invested a certain way, doesn't mean they'll end up that way. Rebalancing our portfolio at least once a year will help us stay on track.</p> <p><em>What are you doing to correct your investing mistakes?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/11-investment-mistakes-we-all-make">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-ways-to-invest-50-500-or-5000">The Best Ways to Invest $50, $500, or $5000</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-choosing-the-right-fund-for-your-portfolio">Are You Choosing the Right Fund for Your Portfolio?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-ways-to-invest-in-biotech-without-getting-burned">7 Ways to Invest in Biotech Without Getting Burned</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-easy-ways-to-start-green-investing">5 Easy Ways to Start Green Investing</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment bonds ETFs investing mistakes mutual funds stocks Wed, 23 Sep 2015 13:00:22 +0000 Tim Lemke 1561525 at http://www.wisebread.com Save Your Retirement by Avoiding These 10 Risky Investments http://www.wisebread.com/save-your-retirement-by-avoiding-these-10-risky-investments <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/save-your-retirement-by-avoiding-these-10-risky-investments" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/bull_versus_bear_000060138212.jpg" alt="Finding out which volatile investments you should avoid" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Trying to predict the movements of <a href="http://www.wisebread.com/tesla-six-flags-and-9-other-adventure-stocks-worth-investing-in">individual stocks</a> and funds is often a futile endeavor, but it gets harder when you're tracking highly volatile investments.</p> <p>Many stocks, mutual funds, and ETFs are well known for share prices that jump around. That movement can be exploited in the short-term, but it's usually not helpful for long-term investors. What's more, many of the most volatile investments haven't performed well, overall.</p> <p>Here are 10 stocks that are among the most volatile in the market, based on a common measurement known as beta. Most of these firms have a beta higher than their industry's average. Generally speaking, any investment with a beta higher than 1.0 is considered more volatile than average.</p> <h2>1. SolarCity [NASDAQ: <a href="http://finance.yahoo.com/q?s=SCTY">SCTY</a>]</h2> <p>I'm personally a big fan of renewable energy, but it's hard to get a handle on this stock. That's because it seems very susceptible to any and all news related to green energy, and as a relatively new company, it gets big attention for nearly every deal it makes. SolarCity hit a 52-week high last September then dove to a year low within two months. Then came a gradual climb, followed by another big dip. Long-term investors are better off waiting for SolarCity to get established before jumping in.</p> <h2>2. Twitter [NYSE: <a href="http://finance.yahoo.com/q?s=TWTR">TWTR</a>]</h2> <p>Riding the ups and downs of this stock has been like being on a wooden coaster at Coney Island. Shares rose to new heights near $60 last fall, then fell 40%, then rebounded almost all the way back, only to fall to under $30 recently. On one hand, investors see the potential from Twitter's 300 million active users. But it's also clear the company hasn't entirely figured out its business plan. (Disclosure: I own some shares of Twitter.)</p> <h2>3. Keurig Green Mountain [NASDAQ: <a href="http://finance.yahoo.com/q?s=GMCR">GMCR</a>]</h2> <p>Those single serve coffee makers were a great invention, but Keurig has had a terrible year and has been one of the most volatile stocks for the last five, according to standard deviation measurements. Last November, shares were trading at $158, but now they are near $52. Investors have become skeptical of Keurig's new products, and the company's ability to hang with new competition.</p> <h2>4. Oil and Gas ETFs</h2> <p>With oil prices hammered down in the last year, energy-related stocks have also taken a beating. But they're not just down in value &mdash; they're also highly volatile. Check any list of the most volatile ETFs over the last three years, and you'll see numerous oil and gas ETFs, including Powershares S&amp;P SmallCap Energy Portfolio and SPDR S&amp;P Oil &amp; Gas Equipment &amp; Services ETF. Energy companies including Clayton Williams Energy and Carbo Ceramics are among the most volatile in the stock market.</p> <h2>5. S&amp;P High Beta Portfolio [NYSE: <a href="http://www.google.com/finance?cid=7980421">SPHB</a>]</h2> <p>This is an ETF that tracks the S&amp;P 500 High Beta Index, which keeps tabs on the most volatile stocks in the market. As you can imagine, its price fluctuates wildly, making it a horribly impractical product for most long-term investors. Consider that 14% of this ETF's holdings are in the highly volatile oil and gas industry.</p> <h2>6. Alexion Pharmaceuticals [NASDAQ: <a href="http://finance.yahoo.com/q?s=ALXN">ALXN</a>]</h2> <p>What to make of a stock that goes from a 52-week low to a 52-week high within two months? What to make of a stock that pulls off such a swing twice in one year? Alexion has a beta figure of 1.28, which is 50% higher than the average in the biotech industry. Unless you are Nostradamus and can predict these swings, stay away.</p> <h2>7. TripAdvisor [NASDAQ: <a href="http://www.google.com/finance?cid=307145951988945">TRIP</a>]</h2> <p>In the last year, few companies have been more volatile. The popular travel website has seen shares drop 21% in the last 52 weeks, but with wild swings during that time. Some investors may have done well with TripAdvisor stock, depending on when they sold. But trying to predict the ups and downs is a fool's game.</p> <h2>8. Zillow [NASDAQ: <a href="http://finance.yahoo.com/q?s=Z">Z</a>]</h2> <p>The provider of real estate information was trading at $148 about a year ago. Now shares are at $75 a piece. Investors have endured some big price swings in recent months, including a 14% single-day drop back in March. Zillow has a beta of 1.4, placing it in the top third of most volatile stocks in the tech industry.</p> <h2>9. Yelp [NYSE: <a href="http://finance.yahoo.com/q?s=YELP">YELP</a>]</h2> <p>Shares of this online platform for business reviews have been less volatile this year than in years past, but that's only because they've steadily gone down. Shares have dropped more than 60% since a 52-week high last September.</p> <h2>10. Casino Stocks</h2> <p>Look to Las Vegas for some volatility. Wynn Resorts has been one of the more volatile stocks in the last three years, and shares are down more than 40% this year. Caesar's Entertainment has also been all over the place, trading at $17 last November and then dropping to $3.30 this past June. You may have better luck at the blackjack table than you would trying to anticipate the movements of these stocks.</p> <p><em>Are you daring enough to invest in volatile shares like these? How have you done?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/save-your-retirement-by-avoiding-these-10-risky-investments">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-things-everyone-should-know-about-the-commodities-markets">8 Things Everyone Should Know About the Commodities Markets</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-stocks-every-recent-grad-should-own">10 Stocks Every Recent Grad Should Own</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-investment-mistakes-we-all-make">11 Investment Mistakes We All Make</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-easy-ways-to-invest-in-china">7 Easy Ways to Invest in China</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment beta ETFs market stocks volatility Tue, 25 Aug 2015 13:00:26 +0000 Tim Lemke 1531894 at http://www.wisebread.com The 10 Weirdest ETFs You Can Buy http://www.wisebread.com/the-10-weirdest-etfs-you-can-buy <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-10-weirdest-etfs-you-can-buy" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_reading_newspaper_000019458258.jpg" alt="Woman investing in weird ETFs but probably shouldn&#039;t" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you read Wise Bread often, you'll know we're big fans of exchange traded funds, known as ETFs. They are great vehicles for broadening and diversifying your portfolio, and offer some advantages over mutual funds. (See also: <a href="http://www.wisebread.com/8-ways-etfs-can-put-more-money-in-your-pocket-than-mutual-funds?ref=seealso">8 Ways ETFs Can Put More Money in Your Pocket Than Mutual Funds</a>)</p> <p>But as ETFs have grown in popularity, they've also grown in number. And that means there are some very strange ETFs out there. Being weird doesn't make an ETF bad, necessarily, but all too often these unique ETFs are too specialized or complicated to be useful to the average investor. And many of them just aren't good performers.</p> <p>Here's an examination of some of the weirder ETFs out there, with reasons why you shouldn't bother investing in them.</p> <h2>1. High Volatility or Beta ETFs</h2> <p>These ETFs give you exposure to companies that are uniquely sensitive to the ups and downs of the market. Examples include Powershares' S&amp;P 500 High Beta Portfolio ETF [<a href="http://finance.yahoo.com/q?s=SPHB">SPHB</a>] or its High Beta Emerging Markets Portfolio ETF [<a href="http://finance.yahoo.com/q;_ylt=AltJGS9tP77yDaNAPbL0lWpzAcAF?uhb=uhb2&amp;fr=uh3_finance_vert_gs&amp;type=2button&amp;s=EEHB">EEHB</a>]. In theory, these ETFs can help you make more money when markets rise, but it could also mean bigger losses during bear markets. If you're investing for the long term, your goal should be to smooth out the ups and downs, not embrace wild swings. Unless you enjoy getting ulcers, stay away from these ETFs.</p> <h2>2. Inverse ETFs</h2> <p>The idea here is that you are betting against an index, so you can make money during a bear market. Perhaps it makes sense for a short-term investor, but it does not make sense for the typical investor looking to grow wealth over the long term. It's true that stock market can take a nosedive from time to time, but it's very hard to predict exactly when. Over time, markets go up, so let that guide your investment strategy.</p> <h2>3. ETFs for Obscure Countries</h2> <p>For the average investor, there's really no good reason to own an ETF centered solely on, say, Qatar. Look instead to ETFs with a broad exposure to international and emerging markets. The iShares Total International ETF [<a href="https://www.ishares.com/us/products/244048/ishares-core-msci-total-international-stock-etf">IXUS</a>] is a good one, as is the iShares Emerging Markets ETF [<a href="http://www.ishares.com/us/products/244050/ishares-core-msci-emerging-markets-etf">IEMG</a>].</p> <h2>4. Leveraged ETFs</h2> <p>A leveraged ETF can help you get amplified returns, because they take advantage of borrowed money. Think of it as a simpler way to trade on margin. Popular leveraged ETFs include the Daily S&amp;P 500 Bull 3x ETF [<a href="http://finance.yahoo.com/q?s=SPXL">SPXL</a>] and the Ultra S&amp;P 500 ETF from ProShares [<a href="http://www.proshares.com/funds/sso.html">SSO</a>]. Leveraged ETFs aren't bad, but they're not great for a typical investor who's looking for steady and long-term growth. That's because any time you're trying to boost returns through borrowing, you may also see amplified losses.</p> <h2>5. Ultra-Specific Sector ETFs</h2> <p>It's sensible to try and diversify your portfolio by investing in a mix of sectors, such as energy, health care, and technology. But it's possible to get too crazy with it. An ETF for the broad materials sector is fine, but there's no need to delve deep into the agribusiness sector. A general energy ETF will help your portfolio, but do you need specific exposure to solar companies? The impact of these investments could be positive, but relatively miniscule, so don't complicate things for yourself.</p> <h2>6. Advisorshares GlobalEcho Fund [<a href="http://advisorshares.com/fund/give">GIVE</a>]</h2> <p>There's nothing wrong with socially responsible investing, but it's probably best to stay away from this particular ETF, which focuses on investments &quot;that may technologically, socially, and environmentally impact the earth positively.&quot; The ETF's performance is up barely more than 1% in 52 weeks, and its expense ratio of 1.61% is far higher than most ETFs. To find better performance and lower expenses, consider investing in iShares MSCI KLD 400 Social Index Fund [<a href="https://www.ishares.com/us/products/239667/ishares-msci-kld-400-social-etf">DSI</a>] instead.</p> <h2>7. S&amp;P 500 VIX Short-Term Futures ETF [<a href="http://finance.yahoo.com/q?s=VXX">VXX</a>]</h2> <p>I have to admit, I don't really understand this ETF. And I doubt most investors will. Dow Jones says the ETF &quot;utilizes prices of the next two near-term VIX futures contracts to replicate a position that rolls the nearest month VIX futures to the next month on a daily basis in equal fractional amounts.&quot; Got it? Me neither. But I do understand price performance, and this ETF has lost nearly all of its value over the years. Stay away.</p> <h2>8. Market Vectors Gaming ETF [<a href="http://finance.yahoo.com/q?s=BJK">BJK</a>]</h2> <p>This is an ETF that tracks the performance of some of the largest casino companies, including MGM Grand, Las Vegas Sands, and Galaxy International. Many of these aren't bad companies, per se, but this far too specialized an ETF for most investors. Not to mention, anyone who did invest in this ETF in recent years hasn't exactly hit the jackpot. Shares are down 27% over the last three years, and are up just 6% in three years.</p> <h2>9. Exchange Traded Managed Funds</h2> <p>Part of the attraction to ETFs is that they are passively managed and their investments are clearly advertised. But there is a new push for approval of managed ETFs, or ETMFs. In theory, these investments have a chance to outperform an underlying index because they are actively managed. But there's a growing body of evidence that asset managers can't beat the market on a consistent basis. You're better off with an ETF that's simpler and more transparent.</p> <h2>10. Yorkville High Income Infrastructure MLP Index ETF [<a href="http://www.yetfs.com/ymli.aspx">YMLI</a>]</h2> <p>This ETF tracks the movements of select energy infrastructure master limited partnerships. That's a mouthful, and it's pretty unlikely the average investor needs anything that specialized in their portfolio. What's more, this particular ETF has an astonishingly high expense ratio of 5.91%.</p> <p><em>Do you have any unique or interesting ETFs in your portfolio?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/the-10-weirdest-etfs-you-can-buy">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-choosing-the-right-fund-for-your-portfolio">Are You Choosing the Right Fund for Your Portfolio?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-to-make-before-you-start-investing">8 Money Moves to Make Before You Start Investing</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-too-much-investment-diversity-can-cost-you">How Too Much Investment Diversity Can Cost You</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt">7 Money Moves to Make as Soon as You Conquer Debt</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/a-beginner-s-guide-to-investing-in-frontier-markets">A Beginner’s Guide to Investing in Frontier Markets</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment ETFs exchange traded funds portfolio risks stock market Wed, 15 Jul 2015 13:00:12 +0000 Tim Lemke 1484611 at http://www.wisebread.com How to Build an Investment Portfolio for Under $5000 http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-build-an-investment-portfolio-for-under-5000" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/financial_growth_000016805229.jpg" alt="Man learning to build investment portfolio with under $5000" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you're relatively new to investing, you might find the number of investment options mind boggling. Moreover, it's not easy to know how much money to place in which types of investments.</p> <p>To help simplify things, let's pretend we have $5,000 to place in a retirement account. The investment mix presented here should be a good guideline for someone looking for growth over the long term. It's not too aggressive, but will allow for a steady increase in retirement savings over the course of many years.</p> <p>You'll note that there are no individual stocks in this portfolio. Instead, there's a heavy focus on mutual funds and ETFs that can give you exposure to a broad mix of stocks.</p> <p>Feel free to adjust your mix depending on your age and risk tolerance, and don't forget to re-balance <a href="http://www.wisebread.com/the-most-important-thing-youre-probably-not-doing-with-your-portfolio">your portfolio</a> once a year so you're staying on track.</p> <h2>$2,000: Total Market Fund or ETF</h2> <p>Every portfolio needs a solid foundation. To get exposure to a wide range of U.S.-based stocks, start by placing a good portion of your money in a mutual fund or exchange-traded fund that seeks to replicate the performance of the entire stock market. I am partial to iShares Total Market ETF [<a href="https://www.ishares.com/us/products/239724/ishares-core-sp-total-us-stock-market-etf">ITOT</a>], and also like Vanguard's Total Market Index ETF [<a href="http://finance.yahoo.com/q?s=VTI">VTI</a>]. Spartan's Total Market Index Fund [<a href="https://fundresearch.fidelity.com/mutual-funds/summary/315911404">FSTMX</a>] is also a good choice. These investments usually have very low expense ratios and can often be traded without a commission, depending on the broker. (Disclaimer: I own all three of the aforementioned in various accounts.)</p> <h2>$1,500: International Equity Index Fund or ETF</h2> <p>To reduce risk, it's important to have some of your money diversified across geographies. Consider putting at least 30% of your money into international equities, which give you exposure to some of the largest companies in Europe, Asia, South America, and even Africa.To get broad exposure to international markets, consider an ETF such as the iShares Total International Stock ETF [<a href="https://www.ishares.com/us/products/244048/ishares-core-msci-total-international-stock-etf">IXUS</a>], or Vanguard's Total International Stock Index Fund [<a href="http://www.morningstar.com/funds/XNAS/VGTSX/quote.html">VGTSX</a>]. If you want to become more diversified in international stocks and take advantage of growth in emerging markets, consider mixing in iShares Emerging Markets ETF [<a href="https://www.ishares.com/us/products/239637/ishares-msci-emerging-markets-etf">EEM</a>] or something similar.</p> <h2>$500: Small Cap Stock Fund or ETF</h2> <p>One of the downsides of investing in a total market fund is that you won't get a lot of exposure to smaller companies. Small companies may have more growth potential than other investments, so it's good to have some in your stock portfolio. The Small Cap Value Fund [<a href="http://www.morningstar.com/funds/XNAS/PRSVX/quote.html">PRSVX</a>] from T. Rowe Price is a good performer, as is Fidelity Advisor Small Cap Growth Fund [<a href="http://finance.yahoo.com/q?s=FCPVX">FCPVX</a>].</p> <h2>$250: Mid Cap Stock Fund or ETF</h2> <p>This is another way to ensure your portfolio isn't too geared to larger companies. Mid cap companies are not too big, not too small, but can offer some nice growth. There are many good ways to get involved with mid caps, but take a look at the SPDR S&amp;P 400 Midcap Growth ETF [<a href="https://www.spdrs.com/product/fund.seam?ticker=MDYV">MDYV</a>], or the Schwab U.S. Midcap ETF [<a href="http://www.morningstar.com/etfs/ARCX/SCHM/quote.html">SCHM</a>].</p> <h2>$250: Real Estate</h2> <p>A complete portfolio should have some real estate exposure, and fortunately there are some easy ways to get into that game without going out and buying an apartment building. Real Estate Investment Trusts allow individual investors to access everything from Class A commercial real estate to hospitals and condominiums developments. Look at the Vanguard REIT Fund [<a href="http://finance.yahoo.com/q?s=VGSIX">VGSIX</a>] to get started.</p> <h2>$500: Bonds</h2> <p>It's good to invest in some bonds as a hedge against risk, and you may even want to ramp this figure up as you get closer to retirement. Vanguard's Total Bond Market Index Fund [<a href="http://www.morningstar.com/funds/XNAS/VBMFX/quote.html">VBMFX</a>] and similar funds will give you exposure to a wide range of corporate and government bonds.</p> <p>This use of $5,000 should give you a well-diversified and balanced portfolio. As you gain confidence and knowledge, don't be afraid to mix in some other investments, including commodities like oil and gas, or precious metals like gold and platinum. Also consider adjusting your exposure to certain business sectors, such as technology, health care. and financials. But most of all, be patient and keep an eye on your long-term goals.</p> <p><em>How have you structured your portfolio?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-investment-mistakes-we-all-make">11 Investment Mistakes We All Make</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-ways-to-invest-50-500-or-5000">The Best Ways to Invest $50, $500, or $5000</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-choosing-the-right-fund-for-your-portfolio">Are You Choosing the Right Fund for Your Portfolio?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-ways-to-invest-in-biotech-without-getting-burned">7 Ways to Invest in Biotech Without Getting Burned</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-easy-ways-to-start-green-investing">5 Easy Ways to Start Green Investing</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment bonds ETFs mutual funds portfolios stocks Mon, 13 Jul 2015 13:00:10 +0000 Tim Lemke 1484692 at http://www.wisebread.com 7 Easy Ways to Invest in China http://www.wisebread.com/7-easy-ways-to-invest-in-china <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-easy-ways-to-invest-in-china" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/china_000031662610.jpg" alt="Cool new ways to invest in China" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>China, with its 1.4 billion people, is overwhelming in size. Investing in China can be daunting. But it also poses a huge opportunity.</p> <p>There are a number of good ways for the American investor to benefit from <a href="http://www.wisebread.com/need-a-job-try-searching-in-china">China's economic growth</a>. And you don't need to know Chinese, or even learn a lot about individual companies there to profit.</p> <p>Consider these Chinese investments to add some geographic diversity to your portfolio.</p> <h2>1. Fidelity China Region Fund (<a href="https://fundresearch.fidelity.com/mutual-funds/summary/315910778">FHKCX</a>)</h2> <p>If you're a Fidelity customer, you can buy and sell this fund with no transaction fee. The fund has risen in value more than 20% this year, and has an expense ratio of just 1%, which is relatively low for international funds. Major holdings include Taiwan Semiconductor, AIA Group, and the China Construction Bank. This fund has a coveted five-star rating from Morningstar.</p> <h2>2. iShares MSCI China ETF (<a href="https://www.ishares.com/us/products/239619/ishares-msci-china-etf">MCHI</a>)</h2> <p>This exchange-traded fund from Blackrock will give you exposure to large and midcap firms in China, and is designed to track the MSCI China index. Its expense ratio is just 0.62%, and top holdings including Tencent Holdings, China Construction Bank, and China Mobile. For a different mix of Chinese investments, also consider the <a href="https://www.ishares.com/us/products/239536/ishares-china-largecap-etf">iShares China Large Cap</a>, and the <a href="https://www.ishares.com/us/products/239620/ishares-msci-china-smallcap-etf">iShares MSCI China Small Cap</a> ETFs. This ETF is free to trade through Fidelity.</p> <h2>3. Kraneshares CSI China Internet ETF (<a href="http://kraneshares.com/kweb/">KWEB</a>)</h2> <p>You've heard the buzz about Alibaba, so here's a way to get in on the action. This ETF, which is less than two years old, has risen in value by more than 30% this year. It counts Tencents Holding Co. and Alibaba as its top holdings.</p> <h2>4. Market Vectors China AMC SME-ChiNext ETF (<a href="http://www.vaneck.com/market-vectors/equity-etfs/cnxt/snapshot/">CNXT</a>)</h2> <p>Shares of this ETF have nearly doubled this year, thanks to good performance from its mix of large and medium Chinese stocks. This ETF just began trading in July of last year, and already has assets of nearly $90 million. Top holdings include East Money Information Co., Sunung Commerce Group, and SIASUN Robot and Automation.</p> <h2>5. Guggenheim China Real Estate ETF (<a href="http://finance.yahoo.com/q?s=tao">TAO</a>)</h2> <p>There's been some talk of a real estate bubble in China, but it hasn't popped yet. This ETF is up more than 15% over the last 52 weeks, as the value of Chinese real estate continues upward. You may never get to own a skyscraper in Shanghai, but this is one way to get a piece of the action.</p> <h2>6. Yum! Brands</h2> <p>It's often a wise idea to invest in an American company that has a big presence in the market with which you are seeking exposure. In the case of Yum! Brands, you'd be investing in one of the top retail developers in China, with 6,800 restaurants (mostly Pizza Hut and KFC) and another 700 on the way this year.</p> <h2>7. Ford and General Motors</h2> <p>What? American automakers? Yes, the Chinese are adding new drivers every day, and seem to like U.S. made cars. The Wall Street Journal in May labeled Ford &quot;The big up-and-comer in China,&quot; and the company has doubled its Chinese market share since 2012. GM has also seen increases in sales. Invest in U.S. automakers, and get some indirect exposure to China in the process.</p> <p><em>Are you considering investing in China?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/7-easy-ways-to-invest-in-china">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/save-your-retirement-by-avoiding-these-10-risky-investments">Save Your Retirement by Avoiding These 10 Risky Investments</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-ways-to-invest-in-biotech-without-getting-burned">7 Ways to Invest in Biotech Without Getting Burned</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-investment-mistakes-we-all-make">11 Investment Mistakes We All Make</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt">7 Money Moves to Make as Soon as You Conquer Debt</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment China diversity ETFs overseas stocks Mon, 06 Jul 2015 11:00:12 +0000 Tim Lemke 1475624 at http://www.wisebread.com 7 Ways to Invest in Biotech Without Getting Burned http://www.wisebread.com/7-ways-to-invest-in-biotech-without-getting-burned <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-ways-to-invest-in-biotech-without-getting-burned" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/pills_and_money_000037331956.jpg" alt="How to invest in biotech and not get burned" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Investors looking for large returns may be tempted to check out the biotech sector, in hopes that the next big cancer drug will also mean big revenue potential. It's easy to be lured by the possibility of fast dollars, but there is also a high level of risk.</p> <p>But it's also quite possible a company will never develop products that will reach the market. It often takes years to learn if a biotech company's <a href="http://www.wisebread.com/9-safe-investments-that-arent-bonds">investments</a> pay off, and there are many obstacles to turning research and development into a marketable, revenue-producing product. On the flipside, an investor can see massive returns very quickly if a biotech firm is successful.</p> <p>Here are some strategies for investing in the biotech sector without losing your shirt.</p> <h2>1. The Bigger, the Better</h2> <p>One of the risky things about investing in biotech companies is that many of them are quite small, and their fortunes can depend heavily on the success of one or two products. A bigger company will be able to withstand the blow of poor results from one clinical trial. Look to large biotech players such as <a href="http://finance.yahoo.com/q?s=GILD">Gilead [GILD]</a>, <a href="http://finance.yahoo.com/q?s=AMGN">Amgen [AMGN]</a>, or <a href="http://finance.yahoo.com/q?s=CELG">Celgene [CELG]</a>, which each have market capitalizations of $100 billion or more.</p> <h2>2. Go With a Fund or ETF</h2> <p>Rather than place a bet on a single company, consider putting your money in the broader biotech market. There are several well-performing mutual funds and exchange-traded funds that give you biotech exposure but across a diverse set of players in the healthcare industry. The Vanguard Health Care Index Fund [VHT] is a solid fund offering a consistent track record of growth with relatively low fees. Also consider the <a href="https://www.spdrs.com/product/fund.seam?ticker=xbi">SPDR S&amp;P BioTech ETF [XBI]</a> and the <a href="https://www.ishares.com/us/products/239511/ishares-us-healthcare-etf">iShares U.S. Healthcare ETF [IYH]</a></p> <h2>3. Invest in Pharma, Rather Than Pure Biotech</h2> <p>In many cases, there is not much difference between biotech companies and pharmaceutical firms. Both types of companies engage in research and development, but pharmaceutical firms also get involved in manufacturing and marketing drugs themselves. Thus, pharmaceutical firms tend to be larger and their stock performance will be less volatile. Johnson &amp; Johnson, GlaxoSmithKline, and Pfizer have been consistently solid performers for decades.</p> <h2>4. Look for FDA Approval</h2> <p>Every biotech company will claim that it's on the verge of a breakthrough, but only those with government approvals have something that's truly worth investing in. If a company recently got approval from the Food and Drug Administration for a drug, then it has something tangible that could bring in revenue. Without an approval, you're only investing in possibilities.</p> <h2>5. Seek the Rarest and Worst Diseases</h2> <p>This may seem macabre, but the biotech companies that will reap the largest returns are those developing drugs to tackle the most deadly medical conditions. And if the company is testing drugs for something rare, there's a chance the drug could be developed without a competitor. In these cases, seek companies that have at least put a drug through Clinical Phase II or III.</p> <h2>6. Find an Acquisition Target</h2> <p>Rather than try to guess which companies might get approval for a drug, consider looking for those that could be bought by bigger players. Bloomberg News reported in January that biotech firms could be <a href="http://www.bloomberg.com/news/articles/2015-01-14/biotech-s-hot-ipo-market-creates-next-takeover-targets-real-m-a">hot targets for larger pharma companies</a> this year. For big pharmaceutical companies, buying young biotech companies is a way for them to spark growth.</p> <h2>7. Be Diversified</h2> <p>It always makes sense for your investment portfolio to have a wide array of stocks and other investments from different industries and asset classes. This is especially important when investing in biotech stocks, because they are so volatile. If biotech stocks or funds are a relatively small part of a large and diverse set of investments, then you need not worry too much if some investments don't work out.</p> <p><em>Do you invest in biotech? Why or why not?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/7-ways-to-invest-in-biotech-without-getting-burned">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-investment-mistakes-we-all-make">11 Investment Mistakes We All Make</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-9-best-performing-mutual-funds-of-the-2000s">The 9 Best Performing Mutual Funds of the 2000s</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-buy-your-first-stocks-or-funds">How to Buy Your First Stock(s) or Fund(s)</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-ways-to-invest-50-500-or-5000">The Best Ways to Invest $50, $500, or $5000</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment biotech ETFs mutual funds pharmaceuticals stocks Wed, 10 Jun 2015 11:00:11 +0000 Tim Lemke 1451218 at http://www.wisebread.com 5 Best Online Brokerages for Your IRA http://www.wisebread.com/5-best-online-brokerages-for-your-ira <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-best-online-brokerages-for-your-ira" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_laptop_000029434486.jpg" alt="Woman managing her online IRA accounts" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Are you ready to save for retirement, but aren't sure where to start? I've created a short list of the five best brokerages for your <a href="http://www.irs.gov/Retirement-Plans/Individual-Retirement-Arrangements-(IRAs)-1">Individual Retirement Account (IRA)</a>. To develop my recommendations, I began by considering account minimums and investment fees.</p> <p>I also examined the ease of managing the IRA, identifying firms that have excellent offerings for a wide range of investors, whether you're hands-off or deeply engaged. Specifically, I evaluated the breadth of investment choices, value of commission-free and no-transaction fee selections, simplicity and costs associated with putting the account on auto-pilot, and any investment educational content provided.</p> <p>Here are my top picks.</p> <h2>1. TD Ameritrade</h2> <p><a href="https://www.tdameritrade.com/offer-home.page?s_tnt=54494:8:0">TD Ameritrade</a> is an online brokerage well-suited to the novice investor. There are no account minimums, so you can get started with a modest amount of cash. Plus, there are no maintenance or inactivity fees, so you don't have to worry about these nibbling away at your retirement account balance.</p> <p>This brokerage boasts more than 100 commission-free exchange-traded funds (ETFs), and nearly 2,000 no-load, no-transaction fee mutual funds (plus funds with loads that are waived for TD Ameritrade investors). If you choose to buy individual stocks and transaction fee funds, the commissions for stock and ETF trades are $9.99, while no-load mutual funds cost $49.99 per transaction.</p> <p>There are vast educational resources that include videos on basic investing principles for new investors and tools to screen and evaluate investments.</p> <h2>2. Charles Schwab</h2> <p><a href="https://www.schwab.com/">Charles Schwab</a>, the first brokerage firm to <a href="http://www.sfgate.com/business/article/The-genesis-of-discount-brokerage-1975-SEC-2637815.php">discount its commissions</a>, continues to be a good deal. The company has developed its own proprietary line of ETFs and mutual funds, and created the OneSource listing of funds that are available free of trading fees. You'll find nearly 200 commission-free ETFs and more than 3,000 no-load, no-transaction fee mutual funds, including a good selection of market index funds.</p> <p>You'll typically need $1,000 or more to establish an IRA with Schwab. However, this account minimum is waived if you deposit $100 or more on a monthly basis. And, you can find mutual funds with initial investments as low as $100 and ETFs priced between $40 and $100+ available free of transaction charges.</p> <p>Stock and ETF trades are $8.95 per transaction when you buy individual stocks or non-commission-free ETFs. Transaction fee, no-load mutual funds will cost $76 when you purchase shares; however, selling shares is free.</p> <p>There are no account management or inactivity fees, making Schwab a good choice for those who may have low balances or little activity associated with their accounts. Furthermore, Schwab has educational content and tools to help you plan and invest for retirement. These include articles, workshops, webcasts, and sessions both for do-it-yourself investors and those who wish to receive guidance on a periodic or ongoing basis.</p> <h2>3. E*Trade</h2> <p><a href="https://us.etrade.com/">E*Trade</a> is an online brokerage with investment choices that include stocks, mutual funds, ETFs, and bonds. Among its offerings are more than 100 commission-free ETFs and 1,300 no-load, no-transaction fee mutual funds.</p> <p>If you choose individual stocks and most ETFs, you will pay $9.99 per trade; and $19.99 on no-load mutual fund purchases and redemptions.</p> <p>At E*Trade, there are no account minimums or annual fees charged on IRAs. If you're eager to learn about investing and retirement planning, you'll find plenty of educational content. And E*Trade's free retirement planning calculator generates an action plan based on your retirement savings to date, current income level and anticipated needs in retirement, and more. You can also gain access to courses and webinars that provide instruction on topics such as researching a stock.</p> <h2>4. Vanguard</h2> <p><a href="http://www.vanguard.com/">Vanguard</a> is best known for its low cost, commission-free, market-index mutual funds; they were the first to develop and market these for individual investors, thanks to visionary founder John Bogle.</p> <p>Among the options available are Vanguard mutual funds and Vanguard ETFs linked to major stock and bond indexes, along with specialty funds representing various industry segments, investing styles (e.g., small cap growth or large cap value), and global regions. Most funds do not carry a transaction fee and their operating expenses are among the lowest in the industry.</p> <p>There is no minimum to open a mutual fund account with Vanguard. However, mutual funds carry initial investment minimums, beginning at $1,000 for target date retirement funds. You'll need $3,000 to establish a brokerage account, but you can then purchase Vanguard ETFs commission-free.</p> <p>If you decide to buy and sell non-Vanguard securities, you'll pay $7 for trades of individual stocks and ETFs, and $35 for transaction fee mutual funds. There are no account maintenance fees if you elect to receive electronic statements. You'll find solid educational content on the site geared toward long-term planning and construction of diversified portfolios.</p> <h2>5. TradeKing</h2> <p><a href="https://www.tradeking.com/">TradeKing</a> is an online brokerage firm that is inexpensive and accessible to the new investor. There is no account minimum and fees are low compared to other brokers. The firm does not offer commission-free ETFs or no-load, no-transaction fee mutual funds. However, you'll pay just $4.95 for stock and ETF trades, and $9.95 for no-load mutual funds, so your transaction costs can be readily contained.</p> <p>There are no account fees, but you'll need to make at least one trade per year or keep at least $2,500 in your combined TradeKing accounts to avoid an inactivity charge. New investors will find plenty of educational resources to learn about stocks, mutual funds, ETFs, and more.</p> <p>If you are looking for low minimums, low investment fees, a full range of investment choices, relative ease of managing the account, and education to guide your decisions, an IRA with one of these brokerages should fit your needs for retirement savings.</p> <p><em>Which online brokerage do you use for your IRA </em><em>&mdash;</em><em> and why?</em><em><br /> </em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/julie-rains">Julie Rains</a> of <a href="http://www.wisebread.com/5-best-online-brokerages-for-your-ira">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-signs-your-retirement-is-on-track">8 Signs Your Retirement Is on Track</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-tell-if-your-401k-is-a-good-or-a-bad-one">How to Tell if Your 401K Is a Good or a Bad One</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-only-8-rules-of-investing-you-need-to-know">The Only 8 Rules of Investing You Need to Know</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-ways-to-invest-in-biotech-without-getting-burned">7 Ways to Invest in Biotech Without Getting Burned</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Retirement ETFs investing ira accounts mutual funds online brokerages stocks Thu, 09 Apr 2015 11:00:06 +0000 Julie Rains 1376575 at http://www.wisebread.com