Investment http://www.wisebread.com/taxonomy/term/4808/all en-US Start Investing Today: Acorns Lets You Invest Your Change While You Shop http://www.wisebread.com/start-investing-today-acorns-lets-you-invest-your-change-while-you-shop <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/start-investing-today-acorns-lets-you-invest-your-change-while-you-shop" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/investment_000039524102.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>What if you were able to automatically invest some money, every day, in small stress-free amounts? Could investing be that simple? Yep. Just <a target="_blank" href="http://track.linkoffers.net/a.aspx?foid=26166697&amp;fot=9999&amp;foc=1" rel="nofollow">sign up for Acorns</a>.</p> <p>Acorns' message is simple: plant your acorns of pocket change today for steady investment growth and wealth in the future. Their app allows users to invest small amounts of money frequently in one of its diversified portfolios.</p> <h2>Steps to Investing with Acorns</h2> <p>Intrigued? Here&rsquo;s how investing with Acorns works.</p> <h3>1. Invest your change and more</h3> <p>Acorns promotes the idea that you can build a portfolio by investing your virtual change from card transactions, similar to Bank of America&rsquo;s <a href="https://www.bankofamerica.com/deposits/manage/keep-the-change.go">Keep-the-Change Savings Program</a>.</p> <p>Charges to your linked credit cards and debit cards are rounded up to the next dollar amount and eventually invested. So, a $5.10 transaction generates a 90-cent investment. Further, whole-dollar transactions generate a $1 investment by default. When the accumulated change equals $5 or more, it is invested in your chosen portfolio.</p> <p>Investments can also be made on a one-time basis or set up to occur on a daily, weekly, or monthly basis. The minimum investment is just $5 and the maximum daily investment is $10,000.</p> <h3>2. Link your accounts</h3> <p>There are two phases to getting started with Acorns. First, sign up for a general account; next, create an investment account.</p> <p>To initiate the investing process, establish your checking account as a funding source from which transfers are made to and from the investment account.</p> <p>You also have the option of setting up linked accounts consisting of credit cards and debit cards. These linked accounts provide the sources of transactions that can be rounded up, accumulated, and then invested when you cross the firm&rsquo;s $5 investment minimum threshold.</p> <p>If you are a customer of a large financial institution, you may be able to establish a connection between Acorns and your bank or credit card company by entering the username and password associated with your account.</p> <h3>3. Choose a portfolio&nbsp;</h3> <p>The investment portfolios offered by Acorns are diversified among stocks, bonds, and real estate. Like many advisory firms, Acorns adheres to the Modern Portfolio Theory (MPT) in constructing its portfolios. Uniquely, the company has engaged the father of MPT on its investment committee, <a href="https://en.wikipedia.org/wiki/Harry_Markowitz">Nobel Prize winning economist Harry Markowitz</a>.</p> <p>Based on your responses to a series of questions, a portfolio is suggested. There are five portfolios for various levels of risk tolerance: conservative, moderately conservative, moderate, moderately aggressive, and aggressive.</p> <p>Each portfolio contains six ETFs representing large company stocks, small company stocks, emerging market stocks, corporate bonds, government bonds, and real estate. The allocation of asset classes among the ETFs varies with the risk profile.&nbsp;Acorns manages your account with the goal of matching your investment portfolio with the model portfolio.</p> <h3>4. Monitor activity through the mobile app</h3> <p>You can monitor and manage investing activity from the firm&rsquo;s mobile app or its computer dashboard.&nbsp;From either location, review activity, monitor account value, link or unlink round-up accounts and sub-accounts (e.g., your Chase account and various credit cards held with Chase), manage account settings, and evaluate portfolio performance.</p> <p>Review and update settings as soon as your account is opened. Specify whether you want your virtual change or round-ups to be invested automatically or manually. Also decide whether you want to invest a full dollar with whole-dollar transactions. Adjust your settings to invest any amount between $0.00 and $1.00.</p> <h3>5. Pay low fees</h3> <p>Acorns charges a flat fee of $1 per month for accounts valued at less than $5,000. For accounts worth $5,000 or more, you are charged .25% of assets under management annually, billed monthly.</p> <p>Dividend reinvestment and rebalancing are included in its fee. There are no transaction fees associated with transferring money or buying and selling the ETFs contained in each portfolio.</p> <h2>Reasons to Embrace or Avoid Acorns</h2> <p>The ability to invest from your phone, easily, quickly, and often is Acorns&rsquo; key selling point. Those who like to invest spontaneously and tend to have extra funds in their checking accounts may especially enjoy interacting with the app on a regular basis.</p> <p>The investment portfolios are designed to be diversified, allowing investors to participate in the market. When (and if) markets trend upward, each portfolio should generate steady investment returns aligned with acceptable levels of risk.</p> <p>Oddly, even though Modern Portfolio Theory is centered on designing portfolios that align expected returns with certain risk levels through asset allocation, I was not asked specifically about my personal risk tolerance when I signed up with Acorns. Based on the firm&rsquo;s white paper, portfolio recommendations are based on age, net worth, income, time horizon, employment status, and need for liquidity, not necessarily how scared, steadfast, or stimulated you are in turbulent market conditions.</p> <p>Fees are low and competitive with advisors in the <a href="http://www.wisebread.com/should-you-trust-your-money-with-these-4-popular-financial-robo-advisers?ref=acorns">automated investing space</a>.</p> <p>Acorns offers regular investment accounts only, not IRAs, IRA rollovers, etc. Because you have a regular taxable account (and not a tax-advantaged one), you can easily withdraw money. However, there are multi-day delays in receiving funds due to standard settlement and bank processing times.</p> <p>I love the idea of investing the change but found the implementation of Acorns&rsquo; concept to be cumbersome. For starters, setting up the account is relatively easy but time consuming. Further, having to wait for virtual change to build to $5 makes sense in terms of controlling transaction-based costs for Acorns. But the accumulation process is counterproductive to fast and easy investing.</p> <p>Acorns offers an innovative way for users to start investing without needing to pull together a large lump sum. If this has been your mental hurtle, Acorns helps you leap over it. For others, it may seem like a lot of effort for small amounts at a time. Invest accordingly.</p> <p><strong><a target="_blank" href="http://track.linkoffers.net/a.aspx?foid=26166697&amp;fot=9999&amp;foc=1" rel="nofollow">Click here to start an Acorns account today!</a></strong></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/start-investing-today-acorns-lets-you-invest-your-change-while-you-shop">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/top-seven-reasons-why-i-use-my-credit-card-for-everything">Top Seven Reasons Why I Use My Credit Card for Everything</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-frugal-rules-you-must-follow-when-shopping-at-costco">5 Frugal Rules You Must Follow When Shopping at Costco</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-ways-your-credit-card-will-save-you-money-while-holiday-shopping">11 Ways Your Credit Card Will Save You Money While Holiday Shopping</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-loyalty-rewards-programs-you-didnt-know-existed">12 Loyalty Rewards Programs You Didn&#039;t Know Existed</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/never-use-cash-for-these-11-things">Never Use Cash for These 11 Things</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Shopping credit cards Wed, 01 Jul 2015 06:35:13 +0000 Julie Rains 1475942 at http://www.wisebread.com 3 Pearls of Financial Wisdom From Alan Greenspan http://www.wisebread.com/3-pearls-of-financial-wisdom-from-alan-greenspan <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/3-pearls-of-financial-wisdom-from-alan-greenspan" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/Alan_greenspan_000018959048.jpg" alt="Alan Greenspan sharing pearls of financial wisdom" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Known as the Oracle, Alan Greenspan is one of the most widely respected Federal Chairmen of all time due to both his economic knowledge and political savvy.</p> <p>A familiar face throughout two decades of U.S. history, Greenspan is the second-longest serving Federal Reserve Chairman (1987&ndash;2006), just four months behind the top spot. Throughout his long tenure in public service and his prolific career in economic consulting, he accumulated a thorough understanding of how markets work.</p> <p>Here are the three best <a href="http://www.wisebread.com/the-5-best-pieces-of-financial-wisdom-from-warren-buffett">pearls of financial wisdom</a> from Alan Greenspan.</p> <h2>1. Beware &quot;Home Bias&quot; in Investments</h2> <p>In his memoir <a href="http://www.amazon.com/gp/product/0143114166/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0143114166&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=NT6Q75GRUYLG7HXO">The Age of Turbulence</a>, Greenspan warns investors about their tendency to invest their savings in their home country, even though this could mean passing up more profitable foreign opportunities.</p> <p>The problem with having a narrow geographical scope for your investment portfolio is that you may undervalue its actual risk. &quot;When people are familiar with an investment environment, they perceive less risk than they do for objectively comparable investments in distant, less familiar environs,&quot; he points out in his book.</p> <p>Diversification is key in order to spread out and minimize your investment risk. Just like you wouldn't put your entire nest egg in a single stock, you shouldn't limit your investments only to the U.S. economy. By including exposure to both domestic and foreign markets, you may be able to ride out bumps in the U.S. economy with price gains in foreign markets, and vice versa.</p> <p>To keep transaction costs predictable and reduce special risks in international investing, such as currency exchange rates, political events, and different market operations, the SEC suggests you consider the following <a href="http://www.sec.gov/investor/pubs/ininvest.htm">foreign investment options</a>:</p> <ul> <li>Mutual funds, such as global funds, international index funds, and regional/country funds;<br /> &nbsp;</li> <li>Exchange-traded funds, which unlike an international index mutual fund, trade on a stock exchange;<br /> &nbsp;</li> <li>American depositary receipts, which are certificates issued by U.S depositary banks providing ownership interest in foreign corporations;<br /> &nbsp;</li> <li>U.S. traded foreign stocks, such as Canadian (e.g. <a href="http://finance.yahoo.com/q?d=t&amp;s=BMO">NYSE:BMO</a>) or Chinese stocks (e.g. <a href="http://finance.yahoo.com/q?s=BIDU">NASDAQ:BIDU</a>).</li> </ul> <p>Consult with your financial planner or retirement plan administrator to find out more details about your options in foreign investments and to determine whether or not those options make sense for your portfolio.</p> <h2>2. Keep &quot;Irrational Exuberance&quot; in Check</h2> <p>You can't talk about Alan Greenspan without touching on the topic of &quot;irrational exuberance.&quot;</p> <p>He coined this term during his keynote address &quot;The Challenge of Central Banking in a Democratic Society&quot; at the American Enterprise Institute's annual dinner in December 1996. Greenspan prepared a pretty dense speech and he wasn't sure what part of it would make the news. The day after his speech the media focused on this bit, &quot;How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions?&quot;</p> <p>For the average investor, the main takeaway is that we have to leave emotions out of investing. When you can't support your investment decisions through cold hard numbers or market fundamentals, then you become a victim of an investment bubble of your own creation. Unsustainable investor enthusiasm often takes place during periods of economic boom. For example, Forbes has called 2015 the &quot;age of unicorns&quot; because there are more than 80 startups with $1 billion or higher market valuation.</p> <p>When it comes to investing you have to do your due diligence, you can't just wing it or play it by ear.</p> <p>Greenspan believes that the best way to keep irrational exuberance in check is to study the history of financial markets and learn from the experience of past generations. Improving your financial literacy is a common suggestion from past chairs of the Federal Reserve because &quot;Bearnanke&quot; also stands behind that recommendation. (See also: <a href="http://www.wisebread.com/the-5-best-pieces-of-financial-wisdom-from-ben-bernanke?ref=seealso">The 5 Best Pieces of Financial Wisdom From Ben Bernanke</a>)</p> <h2>3. Hold Stocks Beyond Your &quot;Sleeping Point&quot;</h2> <p>Given that Warren Buffett is not only one of history's most successful investors but also one of his dearest friends, Greenspan pays close attention to the investing lessons from the <em>Oracle of Omaha</em>.</p> <p>In <em>The Age of Turbulence</em>, Greenspan points out that Buffett's favorite holding period is <em>forever</em>. The main reason is that several studies have pointed out the historical average market return of 8.5%. Many investors miss out on that potential return because they sell their positions in times of recession for purely emotional reasons.</p> <p>&quot;The market pays a premium to those willing to endure the angst of watching their net worth fluctuate beyond what Wall Streeters call the 'sleeping point,'&quot; writes Greenspan. There are many valid reasons to sell your stocks, such as rebalancing your portfolio back to its target asset allocations or materializing losses to offset big income gains for tax purposes.</p> <p>However, selling down to the sleeping point &mdash; taking only the risk that still allows you to sleep at night &mdash; shouldn't be relied on to emotionally nix your stocks. Take a cue from both Greenspan and Buffet and remember that the well-documented higher rate of return of equities, even adjusted for risk, exceeds that of alternative investments, provided you're willing to buy and hold stocks for the very long run.</p> <p>Investing can feel sometimes as the most unpredictable thing in the world. &quot;Markets do very weird things because it reacts to how people behave, and sometimes people are a little screwy,&quot; warns Greenspan.</p> <p>By having an understanding of the concepts of home bias, irrational exuberance, and sleeping point, you're better equipped to keep a methodical investment strategy.</p> <p><em>What are other great pearls of financial wisdom from Alan Greenspan?</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/3-pearls-of-financial-wisdom-from-alan-greenspan">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/5-best-websites-to-help-you-retire-early">5 Best Websites to Help You Retire Early</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/womanhood-microscopic-and-other-hot-stock-tips">Womanhood microscopic and other hot stock tips</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/i-am-doing-well-financially-now-what">I Am Doing Well Financially. Now What?</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/this-post-really-suk-kuks-examining-islamic-finance">This Post Really Suk-kuks: Examining Islamic Finance</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-money-mistakes-to-stop-making-by-50">5 Money Mistakes to Stop Making by 50</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment advice alan greenspan bias finance sleeping point Mon, 22 Jun 2015 13:01:11 +0000 Damian Davila 1460512 at http://www.wisebread.com If You'd Held These 10 Stocks Instead of Sold, You'd Be Rich Now http://www.wisebread.com/if-youd-held-these-10-stocks-instead-of-sold-youd-be-rich-now <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/if-youd-held-these-10-stocks-instead-of-sold-youd-be-rich-now" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/man_reading_newspaper_000033450380.jpg" alt="Man realizing why it&#039;s good to hold onto a stock" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You've heard this advice before: Buy and hold &mdash; <a href="http://www.wisebread.com/7-dumb-stock-picking-mistakes-even-smart-investors-make">invest for the long term</a>. But it's hard to do when you see some of your investments languish near all-time lows. Patience is challenging, but if you can find a way to stay strong, there's a good chance you'll be rewarded in the long run.</p> <p>Here are 10 recent examples that show how investors with long time horizons will eventually reap great financial benefits.</p> <h2>1. Apple [AAPL]</h2> <p>After the death of Steve Jobs, everyone wondered if the iconic company would return to being the most innovative brand around. It went through a lull, but thanks largely to <a href="http://www.wsj.com/articles/apple-earnings-iphone-powers-results-1430166629">sales of the iPhone</a>, Apple is now the most valuable company in the world and shares are trading near all-time highs. Shares are up more than 20% in 2015 and 50% since this time last year.</p> <h2>2. Amazon [AMZN]</h2> <p>For years now, many observers have complained about Amazon's thin or even non-existent profits. Shares tumbled badly last fall after the <a href="http://time.com/3536969/amazon-fire-phone-bust/">troubled launch of the Amazon Fire Phone</a>. But they rebounded to new heights at the end of April after reports of strong earnings from Amazon's web services business. Shares have risen more than 40% in the last 52 weeks, rewarding those investors who hung in there.</p> <h2>3. Netflix [NFLX]</h2> <p>The company made what was widely regarded as a massive blunder back in 2011 when it announced it would split into separate services for streaming movies and DVDs. It was an unpopular move that led the company's stock price to drop by more than 60%. But Netflix quickly fixed the mistake and is now a leader in the streaming media business, and its stock price has jumped nearly ten-fold.</p> <h2>4. AOL, Inc. [AOL]</h2> <p>For many people, AOL may be a symbol of the old dot-com era, complete with dial-up Internet access and romantic comedies featuring Tom Hanks and Meg Ryan. But the reality is that the company has quietly transformed itself into a content provider and key player in the web ad space. Shares shot up recently when Verizon announced it would buy AOL for more than $4 billion. If the sale goes through, AOL shareholders will end up with $50 a share &mdash; a 37% increase over the last year and 80% jump in the last three years. (Disclosure: I own some shares of AOL.)</p> <h2>5. Boeing [BA]</h2> <p>Shares of this major aerospace company languished as the government announced cuts in defense spending &mdash; and the troubled rollout of the 787 &quot;Dreamliner&quot; plane in 2013 did not help. Then came the disappearance of Malaysian Airlines Flight 370 &mdash; a Boeing plane. But anyone who unloaded their Boeing shares would have missed out on a big rise in share value. Boeing shares are up 40% in the last two years, and up 12% since the start of 2015. The company delivered a record 723 airplanes in 2014 and expects to deliver another 755 this year.</p> <h2>6. Facebook [FB]</h2> <p>Despite considerable hype, Facebook's initial public offering did not go particularly well. And things got worse, as shares of the social networking company traded at about half their original value for much of 2012. Eventually, Facebook CEO Mark Zuckerberg went all in with a mobile advertising strategy that paid off for the company and investors. Shares now trade at about $80, near an all-time high. (Disclosure: I own some shares of Facebook.)</p> <h2>7. Rite Aid [RAD]</h2> <p>For a long time, investors in this pharmacy chain were the ones buying heavy doses of stomach and headache medicine, as the company was practically near bankruptcy during the economic downturn. But a restructuring plan has helped Rite Aid shed debt and increase sales, to the benefit of investors. Shares have nearly doubled since the fall of 2014 and are up 15% year to date.</p> <h2>8. Goldman Sachs [GS]</h2> <p>Of course, anyone invested in bank stocks in 2008 would have lost some serious dough. But despite some major problems with some of its peers and the industry as a whole, Goldman's viability as a company was never really questioned. Shares dropped to about $50 in the fall of 2008, but then rose back to $189 by the following year once investors realized that Goldman wasn't going anywhere. After another tough year in 2011, shares are now trading at more than $200.</p> <h2>9. Starbucks [SBUX]</h2> <p>The coffee chain is seemingly ubiquitous, but that doesn't mean it has always been a great performing stock. During the financial downturn, shares got battered as customers cut back on pricey vanilla lattes. Starbucks shares traded below $4 in the fall of 2008, but then began a steady climb as the company did the tough work of closing underperforming stores and laying off workers. Shares topped $93 in April of this year and then split. Kudos to those investors who hung in there.</p> <h2>10. The S&amp;P 500</h2> <p>No doubt, it was tough times in 2008, when the S&amp;P 500 fell more than 36%. But those investors with the intestinal fortitude to hang in there were rewarded with nice returns every year since. The average annual return from 2009&ndash;2014 was 17.4%, more than recouping any losses from the period of the Great Recession. To invest in the S&amp;P 500 or broader U.S. stock market, look at low-cost mutual funds or ETFs, such as Vanguard's S&amp;P 500 Index Fund (VFINX) or iShares Total Market ETF (ITOT).</p> <p><em>Do you have any tales of stocks you're grateful to have kept?</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/if-youd-held-these-10-stocks-instead-of-sold-youd-be-rich-now">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/the-debate-between-buy-and-hold-vs-timing-the-market">The Debate Between Buy and Hold vs Timing The Market</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/buy-and-hold-investing-four-ways-to-make-it-more-effective">Buy-and-Hold Investing: 4 Ways to Make It More Effective</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/survive-the-bear-market-10-steps-to-ride-the-downturn">Survive The Bear Market: 10 Steps To Ride The Downturn</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/9-safe-investments-that-arent-bonds">9 Safe Investments That Aren&#039;t Bonds</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/10-times-you-shouldnt-invest-in-stocks">10 Times You Shouldn&#039;t Invest in Stocks</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment buy and hold stock market stocks Fri, 12 Jun 2015 11:00:11 +0000 Tim Lemke 1451212 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="/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-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/8-cheap-easy-and-not-so-obvious-ways-to-invest-in-a-companys-stock">8 Cheap, Easy, and Not-So-Obvious Ways to Invest in a Company&#039;s Stock</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-easy-ways-to-start-green-investing">5 Easy Ways to Start Green 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/5-best-online-brokerages-for-your-ira">5 Best Online Brokerages for Your IRA</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-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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-young-investors-should-stay-the-course-and-continue-to-invest">Why young investors should &quot;Stay the Course&quot; and continue to invest</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 Best Money Tips: Amateur Investing Mistakes You Can Avoid http://www.wisebread.com/best-money-tips-amateur-investing-mistakes-you-can-avoid <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-amateur-investing-mistakes-you-can-avoid" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/couple-iStock_000054013060_Small.jpg" alt="couple thinking about the future" title="couple thinking about the future" class="imagecache imagecache-250w" width="250" height="146" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="http://www.wisebread.com/topic/best-money-tips">Best Money Tips</a> Roundup! Today we found some great articles on beginner investing mistakes you can avoid, reasons why being cheap is bad, and frugal ways to relax on a stressful day.</p> <h2>Top 5 Articles</h2> <p><a href="http://www.currentoncurrency.com/10-amateur-investing-mistakes-to-avoid/">10 Amateur Investing Mistakes You Can Avoid</a> &mdash; Don't expect the stock market to make you a millionaire overnight. [Current on Currency]</p> <p><a href="http://www.creditdonkey.com/cheap-bad.html">23 Reasons Why Being Cheap is Bad</a> &mdash; Having a cheap-is-better mindset can cause you to buy things even when you don't need them. [Credit Donkey]</p> <p><a href="http://www.popsugar.com/smart-living/Ways-Relieve-Stress-31075809">Gimme a Break: 101 Frugal Ways to Relax</a> &mdash; Have a piece of dark chocolate, which relieves stress and lowers blood pressure. [PopSugar Smart Living]</p> <p><a href="http://couplemoney.com/frugal-fun/52-frugal-and-fun-date-ideas/">52 Frugal and Fun Date Ideas</a> &mdash; Take a bike tour around your city! [Couple Money]</p> <p><a href="http://www.lazymanandmoney.com/how-much-emergency-fund-should-you-have/">How Much Emergency Fund Should You Have?</a> &mdash; You'll need to consider several factors, including your job security and your assets. [Lazy Man and Money]</p> <h2>Other Essential Reading</h2> <p><a href="http://www.artofmanliness.com/2015/05/29/how-to-get-your-car-unstuck-from-anything-an-illustrated-guide/">How to Get Your Car Unstuck From&hellip;Anything: An Illustrated Guide</a> &mdash; Stuck in a ditch? Try taking these steps first before you call a tow truck. [The Art of Manliness]</p> <p><a href="http://wealthyturtle.com/fun-staycation-activities/">Fun Family Staycation Activities That Won&rsquo;t Break Your Budget</a> &mdash; Allow yourself to splurge a little and try out a must-go restaurant in your city. [Wealthy Turtle]</p> <p><a href="http://www.dontpayfull.com/blog/11-genius-ways-to-organize-your-closet-on-a-budget">11 Genius Ways To Organize Your Closet On a Budget</a> &mdash; User your closet doors to hang accessories that are not too heavy, like purses, ties, hats, and scarves. [Don't Pay Full]</p> <p><a href="http://www.dumblittleman.com/2015/06/5-tricks-overcome-anxiety-fears.html">5 Tricks How to Overcome Anxiety and Fears</a> &mdash; Try one of these techniques to work through your feelings of anxiety and fear.&nbsp;[Dumb Little Man]</p> <p><a href="http://parentingsquad.com/working-dads-7-steps-to-make-your-health-a-priority">Working Dads: 7 Steps to Make Your Health a Priority</a> &mdash; Listen to your brain and body when something feels off, so you can catch a problem before it becomes a bigger issue. [Parenting Squad]</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/amy-lu">Amy Lu</a> of <a href="http://www.wisebread.com/best-money-tips-amateur-investing-mistakes-you-can-avoid">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/5-dumb-investments-smart-people-make">5 Dumb Investments Smart People 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/5-beginning-investor-mistakes-ive-made-and-you-dont-have-to">5 Beginning Investor Mistakes I&#039;ve Made (And You Don&#039;t Have To)</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/start-investing-today-acorns-lets-you-invest-your-change-while-you-shop">Start Investing Today: Acorns Lets You Invest Your Change While You Shop</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-ways-to-boost-your-odds-of-retiring-early">5 Ways to Boost Your Odds of Retiring Early</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/158-free-investment-classes-from-morningstar-earn-rewards-while-you-learn">158 Free Investment Classes From Morningstar: Earn Rewards While You Learn</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment best money tips investing mistakes Fri, 05 Jun 2015 19:00:08 +0000 Amy Lu 1447873 at http://www.wisebread.com 9 Safe Investments That Aren't Bonds http://www.wisebread.com/9-safe-investments-that-arent-bonds <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-safe-investments-that-arent-bonds" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/man_holding_piggy_bank_000021177412.jpg" alt="Man making safe investments that aren&#039;t bonds" title="" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>So you have a good nest egg built up and you want to protect it. Bonds are a popular choice for those looking for stability, but these days, they are being viewed with more skepticism as interest rates may soon be on the rise.</p> <p>What to do? There are plenty of other places to put your money with relatively low risk. Consider these investments that offer predictable returns and some peace of mind for investors.</p> <h2>1. Cash</h2> <p>I know, it's boring. But if you truly don't want to see your nest egg decline, there are worse things than placing your money in a bank. Interest rates are near historic lows, so you won't be getting much of a return, but inflation is also pretty low right now, so cash isn't really losing value, either. To get a <em>slightly </em>higher return than a run-of-the-mill savings account, consider looking into certificates of deposit, some of which allow you to withdraw money without penalty.</p> <h2>2. REIT Stocks</h2> <p>Shares of real estate investment trusts, or REITs, can be a stable part of an investment portfolio because they're known for high dividends (though not necessarily growth in share value). REITs are a way for <a href="http://www.wisebread.com/the-3-best-books-to-start-investing-today">an individual investor</a> to have real estate in their portfolio without needing to buy property. They are furthermore required to pay out all of their taxable income in the form of dividends. This makes them a great option for income investors, though it's still important to diversify your portfolio to protect against a crash in the real estate sector (like we saw in 2008). Remember that REIT dividends also count as ordinary income for tax purposes.</p> <h2>3. Lending Club</h2> <p><a target="_blank" href="http://track.linkoffers.net/a.aspx?foid=22948877&amp;fot=9999&amp;foc=1" rel="nofollow">Lending Club</a> is an increasingly popular investment vehicle that allows an individual to invest in other people's debt. You can build a portfolio of loans based on your own risk tolerance, and there's a good chance you'll make money because Lending Club only approves applications from borrowers with solid credit. Lending Club claims that 99% of account holders with more than 100 notes earn positive returns. (See also: <a href="http://www.wisebread.com/everything-you-need-to-know-about-peer-to-peer-investing-with-lending-club?ref=seealso">Everything You Need to Know about Investing with Lending Club</a>)</p> <h2>4. Your Electric Company</h2> <p>Investing in utilities such as your electric provider will historically bring you steady, if unspectacular, returns. Generally, utilities pay above-average dividends and are a reliable bet because they provide products and services that we all use. If you are unsure of what specific companies to invest in, consider buying into the Vanguard Utilities Index Fund (VPU) or the iShares US Utilities ETF (IDU).</p> <h2>5. Annuities</h2> <p>There are many different types of annuities, but most of them operate on the principle of paying out a steady stream of income for a set period of time &mdash; or even the rest of your life. Some annuities are designed to give you maximum payments each month, while others are designed to offer additional tax-deferred savings if you've already maxed out your other retirement contributions.</p> <h2>6. Preferred Stock</h2> <p>Shares of preferred stock can go up and down just like common shares, but offer some advantages for those looking for more stability. Generally, preferred stocks offer a fixed dividend, and owners of these have priority over the owners of common shares if a company goes bankrupt. If you're interested in preferred stock, but unclear on what company to invest in, consider a mutual fund or ETF, such as the iShares U.S. Preferred Stock ETF.</p> <h2>7. Consumer Goods</h2> <p>Everyone needs food and clothing. And our economy is built on the idea of people buying stuff, after all. That's why if you invest in consumer goods, you'll probably see a steady and solid investment return even when the rest of the stock market is all over the place. Companies like Procter &amp; Gamble are good bets, or you could invest in a vehicle such as the iShares Dow Jones U.S. Consumer Goods Sector Index Fund (IYK.)</p> <h2>8. Health Care and Pharmaceuticals</h2> <p>People aren't getting any younger, and Americans are going to need health care regardless of the economic environment. The Vanguard Health Care Fund (VGHCX) has generated a 13% return over the last decade and nearly 30% over the last year. Companies like Johnson &amp; Johnson and Pfizer have been some of the most reliable performers in the stock market for decades.</p> <h2>9. The Broader Stock Market</h2> <p>Yes, the conventional wisdom is that you should avoid investing in equities if you want to protect your assets. But there is an argument to be made that investing in the S&amp;P 500 is as safe an investment as anything else. Consider that the value of the S&amp;P 500 has risen every year in the last decade, except for one (2008). In fact, since 1980, the market has <a href="http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html">brought positive returns</a> in all but six years. Investing in index funds or ETFs such as the iShares Total Market ETF is anything but a risky move.</p> <p><em>What alternatives to bonds do you use to provide stable returns?</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-safe-investments-that-arent-bonds">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/10-times-you-shouldnt-invest-in-stocks">10 Times You Shouldn&#039;t Invest in Stocks</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-most-important-thing-youre-probably-not-doing-with-your-portfolio">The Most Important Thing You&#039;re Probably Not Doing With 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/5-easy-ways-to-start-green-investing">5 Easy Ways to Start Green Investing</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-crucial-things-you-should-know-about-bonds">5 Crucial Things You Should Know About Bonds</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/asset-allocation-for-all-markets">Asset Allocation for All Markets</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment annuities bonds cash equity stocks Wed, 03 Jun 2015 11:00:10 +0000 Tim Lemke 1438346 at http://www.wisebread.com The 3 Best Books to Start Investing Today http://www.wisebread.com/the-3-best-books-to-start-investing-today <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-3-best-books-to-start-investing-today" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/man_reading_000027426724.jpg" alt="Man reading three books every beginner investor should read" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Most of us want to start investing. And why not? It can make you solid returns, and it looks easy enough, right? But many beginners make the mistake of rushing into stock investing without properly educating themselves on the subject. Your best strategy is to get educated ASAP, and checking out these three books for <a href="http://www.wisebread.com/the-4-best-investments-for-lazy-investors">beginning investors</a> is a great start.</p> <h2><em>One Up on Wall Street, </em>Peter Lynch</h2> <p>The subtitle of this book tells it all: <em>How to Use What You Already Know to Make Money in the Market</em>. In <a href="http://www.amazon.com/gp/product/0743200403/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0743200403&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=2VO2GCZVK5MXJ5SG">One Up on Wall Street</a>, Fidelity Investments legend Peter Lynch uses an easy-to-follow approach to show readers that you, too, can make money in the market without all the fancy degrees and investment expertise. Learning to read company financials is certainly a mind-numbing experience, but Lynch cuts to the chase and teaches you what you need to know. His wisdom shows readers that all you have to do is invest in the companies and products you already use and know.</p> <h2><em>The Intelligent Investo</em>r, Benjamin Graham</h2> <p>Even Warren Buffet opines that Graham's work is, &quot;By far the best book on investing ever written.&quot; And <a href="http://www.amazon.com/gp/product/0060555661/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0060555661&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=RSUBJGQXKOOXSUZU">The Intelligent Investor</a>, written in 1949, certainly doesn't disappoint. While this book is more technical than <em>One Up on Wall Street</em>, its solid advice to beginners makes it a must on any bookshelf.</p> <p>Graham is interested in what he calls &quot;value investors,&quot; who aren't into speculation or day-trading, but rather willing to learn about stock investing from the ground up, and follow a well-rounded and consistent investment strategy. His book marks a departure from other investment books, mainly because his approach is about limiting losses more than maximizing profits. That's counter-intuitive advice for many.</p> <h2><em>How to Make Money in Stocks,</em> William J. O'Neil</h2> <p>Although more technical than the first two books, <a href="http://www.amazon.com/gp/product/0071752110/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0071752110&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=AVVVVP2EGZ2HCYW3">How to Make Money in Stocks</a> lays out a seven-step plan, CAN SLIM, for minimizing risk and maximizing gain. Stock charts are not an easy read. Full of lines, numbers, and information, stock chart reading is normally reserved for the savvy investor. However, with this book, you can learn how to spot profitable trends in charts. But this book is not just about stock investing &mdash; there's also a thorough discussion on how to use the teachings to score deals in mutual funds and <a href="http://www.wisebread.com/commission-free-etfs-a-great-option-for-cost-conscious-investors">exchange-traded funds</a> (ETFs).</p> <p>O'Neil's information is not for the faint of heart, and it'll take time to really digest and implement his teachings. His seven-step formula is very specific, but will turn you into a great technical stock evaluator along the way.</p> <p>These three books comprise a great starting library for any beginning investor. Start with <em>One Up On Wall Street</em>, and then make your way through the rest. Comparing and contrasting the three will give you a solid base for investing that you can use for a lifetime.</p> <p><em>What investing books do you recommend beginners use?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/shannah-game">Shannah Game</a> of <a href="http://www.wisebread.com/the-3-best-books-to-start-investing-today">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-7"> <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-7-most-successful-women-investors">The 7 Most Successful Women Investors</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/book-review-game-over">Book review: Game Over</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/book-review-full-of-bull-do-what-wall-street-does-not-what-it-says-by-stephen-mcclellan">Book Review: Full of Bull - Do What Wall Street Does, Not What it Says by Stephen McClellan</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-dumb-investments-smart-people-make">5 Dumb Investments Smart People 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/the-false-allure-of-compound-interest">The False Allure of Compound Interest</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment benjamin graham books investing peter lynch reading Wall Street william j. o'neil Mon, 01 Jun 2015 11:00:08 +0000 Shannah Game 1437166 at http://www.wisebread.com 5 Essential Things Women Should Know About Investing http://www.wisebread.com/5-essential-things-women-should-know-about-investing <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-essential-things-women-should-know-about-investing" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/women_investors_000054398090.jpg" alt="Things women should know about investing" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When it comes to investment decision-making, women wield greater economic power than ever before. They now comprise nearly half the workforce and half of all household breadwinners &mdash; but their financial literacy levels still trail. Here are five important ways women are still behind &mdash; and how to catch up.</p> <h2>1. Women Earn Less Than Men</h2> <p>A growing number of women are primary breadwinners, yet women earn just 77 cents for every dollar earned by their male colleagues working in the same positions, despite having equal qualifications. The &quot;gender-gap&quot; is even wider for African-Americans, who earn just 64 cents on the dollar, and Latino women earning 56 cents for every dollar earned by men.</p> <p>To tackle this pressing issue, in 2009 President Obama enacted the <a href="http://www.lillyledbetter.com/">Lilly Ledbetter Equal Pay Act</a>. Another initiative taken under the Obama Administration is the <a href="https://www.whitehouse.gov/sites/default/files/equalpay/equal_pay_task_force_progress_report_june_2013_new.pdf">Equal Pay Task Force</a>, which is comprised of several federal agencies, including the U.S. Equal Employment Opportunity Commission, the Department of Justice, the Department of Labor, and the Office of Personnel Management.</p> <h2>2. Women Live Longer and Save Less For Retirement Than Men</h2> <p>The average female life expectancy in the United States is age 81 &mdash; about four years more than men. Yet according to a recent study, women save 40% less for retirement than their male counterparts. &quot;This is especially concerning because women live longer than men, and thus need more retirement savings. In addition to a longer average lifespan, women are more likely to have work disruptions for caregiving that hinder their capacity to save. Therefore, they need to capitalize on savings opportunities while they are working,&quot; says Cecilia Shiner, senior analyst.</p> <h2>3. Women Are Less Likely to Receive Retirement Benefits</h2> <p>Of the 62 million working women, the U.S. Dept. of Labor says only about 45% contribute to a retirement plan, because many are likely working in part-time jobs due to family obligations and do not meet the qualifications to contribute. Women who find themselves in this position should <a href="http://www.wisebread.com/how-to-set-up-an-ira-to-build-wealth">open an Individual Retirement Account</a> (IRA) and max-out the contribution limit for every year they are employed.</p> <h2>4. Women Lack Confidence in Their Ability to Invest</h2> <p>As a 2014&ndash;2015 Prudential Financial research study shows, women have not improved their <a href="http://www.prudential.com/media/managed/wm/media/Pru_Women_Study_2014.pdf?src=Newsroom&amp;pg=WomenStudy2014">understanding of insurance</a> and financial products over the last decade despite the 2008 financial crisis. However, the same study reported that women are becoming more confident in terms of managing their day-to-day finances (i.e. budgeting and saving). This is extremely significant because it's the first step towards having the discretionary income needed to invest.</p> <h2>5. Women Invest Differently and Are More Risk Averse</h2> <p>Women <a href="http://www.wisebread.com/the-4-best-investments-for-lazy-investors">invest more</a> conservatively than men. A Barclays Wealth Insights study found that men were more likely to consider themselves financial risk-takers and were more willing to choose high-risk investments in order to achieve higher returns. Even when other approaches would have achieved higher gains, women pursued a steadier course and had more stable returns.</p> <p><em>What do you wish you knew more about investing?</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/5-essential-things-women-should-know-about-investing">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-8"> <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/5-dumb-investments-smart-people-make">5 Dumb Investments Smart People 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/10-times-you-shouldnt-invest-in-stocks">10 Times You Shouldn&#039;t Invest in Stocks</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/one-simple-trick-to-get-the-best-tax-benefit-from-your-retirement-portfolio">One Simple Trick to Get the Best Tax Benefit From Your Retirement 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/5-dumb-401k-mistakes-smart-people-make">5 Dumb 401(k) Mistakes Smart People 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-ways-investing-sucks-and-why-you-should-do-it-anyway">7 Ways Investing Sucks (and Why You Should Do It Anyway)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment 401(k)s finances retirement women Fri, 22 May 2015 11:00:21 +0000 Qiana Chavaia 1429695 at http://www.wisebread.com The 4 Best Investments for Lazy Investors http://www.wisebread.com/the-4-best-investments-for-lazy-investors <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-4-best-investments-for-lazy-investors" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/man_papers_work_000015632807.jpg" alt="Man finding best investments for lazy investments" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Here's good news for time-strapped investors: You can ignore your investments and still get rich.</p> <p>You don't have to spend endless hours conducting research, developing watch lists, trading shares, monitoring performance, and rebalancing your portfolio. Fortunately, there are investments that require minimal upfront work and even less maintenance on an ongoing basis. Here are the four best investments for lazy investors.</p> <h2>Robo-Advisory Portfolios</h2> <p>Portfolios created and managed by <a href="http://www.wisebread.com/should-you-trust-your-money-with-these-4-popular-financial-robo-advisers">robo-advisors</a> require minimal involvement beyond signing up for the service. They are diversified among various asset classes and market segments, such as U.S. stocks, stocks of emerging markets worldwide, U.S. corporate bonds, international bonds, etc. Depending on the advisor's approach, portfolios may be tilted toward small caps and/or value funds.</p> <p>Robo-advisory portfolios often contain commission-free ETFs, which tend to be low-cost and tax-efficient. Generally, rebalancing and tax-loss harvesting are included in the services provided to investors (or are available for a nominal fee).</p> <p>Choose an advisor based on the firm's investment philosophy, account minimums, asset-under-management (AUM) fees, other investment fees (if any), and unique features, such as&nbsp;<a href="http://track.flexlinks.com/a.ashx?foid=1029882.679833&amp;fot=9999&amp;foc=1" target="_blank" rel="nofollow">Betterment's goal-setting emphasis</a> or <a href="https://www.wealthfront.com/tax-optimized-direct-indexing">Wealthfront's direct indexing service</a>.</p> <p>To invest your money, respond to prompts regarding your time horizon and risk tolerance. Typically, you'll enter your age or number of years until you reach retirement (or other financial goal), and choose among conservative, moderate, and aggressive portfolios.</p> <h2>Target-Date Funds</h2> <p>Target-date funds, or life-cycle funds, are often &quot;funds of funds&quot; comprised of passively managed (index) and/or actively managed mutual funds. These typically give investors a balanced portfolio that adjusts from riskier, growth-oriented holdings like stocks toward safer, more stable ones such as bonds as you get closer to the target date associated with your financial goal.</p> <p>Generally, target dates are aligned with the investor's expected year of retirement. For example, if you are 35 years old in 2015, you may consider purchasing a fund with the target date of 2045 &mdash; the year you turn 65.</p> <p>To choose a fund, consider the target date, investment-related fees (such as sales loads), expense ratio, mix of underlying funds, and glide path, which describes the rate at which the portfolio moves from more aggressive to more conservative investments.</p> <h2>Blue Chip Stocks</h2> <p>Blue chip stocks represent well-established, nationally recognized, financially stable, and reliable companies, typically with consistent business performance. Definitions vary, but experts name the 30 stocks in the&nbsp;<a href="http://finance.yahoo.com/q/cp?s=%5EDJI+Components">Dow Jones Industrial Average (DJIA)</a> as blue chips.</p> <p>Companies with household names such as Nike, Johnson &amp; Johnson, and Intel are part of the DJIA. Often, blue chip stocks pay dividends, which can boost overall performance when reinvested.</p> <p>To build a portfolio of blue chip stocks, accumulate shares of individual stocks through your brokerage firm or purchase a DJIA index fund, such as&nbsp;<a href="http://money.usnews.com/funds/etfs/large-cap-funds/ishares-dow-jones-u.s.-etf/iyy">iShares Dow Jones U.S. ETF (IYY)</a>.</p> <p>Alternatively, create a blue chip motif at <a href="https://www.motifinvesting.com/how-it-works/overview">Motif Investing</a>, where you can buy up to 30 stocks for $9.95. Weight your stock positions according to your preferences, such as market capitalization. Periodically, rebalance using this broker's tools.</p> <h2>Lazy Portfolios</h2> <p>Lazy portfolios typically consist of a few to several handpicked mutual funds or ETFs that represent the broader stock and bond market domestically and worldwide. These portfolios are diversified, low cost, and minimalistic. Their purpose is to deliver reasonably consistent returns in varied market conditions.</p> <p>Choose among portfolios with as few as two or as many as 10 funds. For example, you might adopt the&nbsp;<a href="http://www.marketwatch.com/lazyportfolio/portfolio/coffeehouse">Coffeehouse portfolio</a> as specified by Bill Schultheis, author of&nbsp;<a href="http://www.amazon.com/gp/product/159184584X/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=159184584X&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=33K7N33GA6JIY2OH">The Coffeehouse Investor</a>. Accumulate shares in these funds to create an investment portfolio that mirrors the percentages indicated by the model portfolio. This particular portfolio contains Vanguard funds that you can purchase free of commissions with a Vanguard account.</p> <p>Periodically, rebalance by buying more shares of funds that lag percentage-wise in the portfolio.</p> <p>There are no guarantees that investments for lazy investors (or diligent ones) will deliver positive returns, year after year. But after making initial purchases, you can minimize the time spent on managing your investments and enjoy other pursuits.</p> <p>The key to building a healthy portfolio is consistency, rather than finesse. On a regular basis, invest your money, avoid withdrawals when you are in a crisis or panic mode, and keep contributing to your investment accounts in all market conditions.</p> <p><em>Are you a lazy investor? What investments have you discovered to be easy to manage?</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/the-4-best-investments-for-lazy-investors">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-9"> <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-most-important-thing-youre-probably-not-doing-with-your-portfolio">The Most Important Thing You&#039;re Probably Not Doing With 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-dumb-stock-picking-mistakes-even-smart-investors-make">7 Dumb Stock Picking Mistakes Even Smart Investors 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/9-safe-investments-that-arent-bonds">9 Safe Investments That Aren&#039;t Bonds</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/if-youd-held-these-10-stocks-instead-of-sold-youd-be-rich-now">If You&#039;d Held These 10 Stocks Instead of Sold, You&#039;d Be Rich Now</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/10-times-you-shouldnt-invest-in-stocks">10 Times You Shouldn&#039;t Invest in Stocks</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment funds lazy investors portfolios stocks Wed, 20 May 2015 13:00:09 +0000 Julie Rains 1423465 at http://www.wisebread.com The 4 Greatest Stock Reversals in the Last Decade http://www.wisebread.com/the-4-greatest-stock-reversals-in-the-last-decade <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-4-greatest-stock-reversals-in-the-last-decade" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/man_money_coins_000027630827.jpg" alt="Man learning about greatest stock reversals of all time" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>America loves a Cinderella tale.</p> <ul> <li>After giving up boxing due to chronic hand injuries during the Great Recession, boxer James Walter &quot;Cinderella Man&quot; Braddock managed the unlikely feat of winning the Heavyweight title.<br /> &nbsp;</li> <li>Despite losing both of her legs and damaging her right arm during the Iraq War, Tammy Duckworth became the first disabled woman to be elected to the House of Representatives.</li> </ul> <p>We even have a special admiration for corporate comebacks. Watching a stock price topple &mdash; only to recover after several years &mdash; is proof of American perseverance and ingenuity. (See also: <a href="http://www.wisebread.com/4-big-tech-stocks-offering-big-returns?ref=seealso">4 Big Tech Stocks Offering Big Returns</a>)</p> <p>Here are four of the greatest stock reversals in the last decade.</p> <h2>1. AIG</h2> <p>Let's start with a big and controversial stock reversal. This company has been no stranger to financial scandals. For example, in 2005 AIG's operations were under fire by the Securities and Exchange Commission, U.S. Justice Department, and New York State Attorney General's Office due to potential accounting fraud.</p> <p>However, AIG (<a href="http://finance.yahoo.com/q?s=AIG">NYSE:AIG</a>) is best known for its credit derivatives debacle that required nearly $200 billion in government bailout funding in 2008. From a peak price of $2073.76 in December 2000, AIG stock tumbled all the way down to $7 by March of 2009.</p> <p>While highly controversial, the bailout worked and the insurance meltdown was halted. The good news was that U.S. taxpayers did come ahead in this deal. As early as 2012, the U.S. Treasury considered selling some of its AIG holdings, providing a profit for taxpayers.</p> <p>Today, the stock trades at about $56. Bearish investors that bought $10,000 of AIG stock at the March 2009 bottom would have close to $80,000 today. That's a 700% return.</p> <h2>2. AOL</h2> <p>Of all the noises that mark a generation, the sound of AOL's modem dial-up connection has to be near the top for both Generations X and Y.</p> <p>Most of AOL's revenue came from <a href="http://qz.com/245585/aol-still-has-2-3-million-dialup-subscribers-and-theyre-very-profitable/">subscriber fees</a>, hitting a total of $25 million back in 2002. Fast forward to June 2014, that number has dropped to just $2.3 million. Ouch.</p> <p>Aside from 90s nostalgia, AOL (<a href="http://finance.yahoo.com/q?s=AOL">NYSE:AOL</a>) has also provided financial gain to stockholders that stuck around. From a rock bottom of $12 per share on September 1, 2011, the company's stock has risen to over $40 by April 2015.</p> <p>The company has gone through a lot of iterations through the years. Currently, AOL makes most of its revenue by amassing eyeballs through its popular websites, such as The Huffington Post and TechCrunch, and hawking online ad space to advertisers. AOL is testament that some investment ideas that sound dubious may still pack a financial punch. (See also: <a href="http://www.wisebread.com/4-great-investments-that-sounded-really-stupid-in-the-2000s?ref=seealso">4 Great Investments That Sounded Really Stupid in the 2000s</a>)</p> <h2>3. Apple</h2> <p>It wasn't always smooth sailing for the giant from Cupertino.</p> <p>Back in 1986, Apple (<a href="http://finance.yahoo.com/q?d=t&amp;s=AAPL">NASDAQ:APPL</a>) commanded a healthy 16% share of the PC market. However, that market share eroded to 2.7% in 2000. Things got so bad for Apple that at the end of the dot-com era, its stock price reached a <a href="http://latimesblogs.latimes.com/money_co/2011/08/apple-stock-steve-jobs-ceo-ipad-iphone-ipod-mac.html">dramatic low of $6.56</a>.</p> <p>But thanks to Steve Job's return to the company, Apple shifted its focus. By focusing on the MP3 market, Apple became the leader with a 72.7% market share. That's when the homeruns started to arrive: iTunes, iPod, iPod Touch, iPhone, and iPad.</p> <p>The constant release of successful products helped Apple rise from the ashes to become the world's largest company by market capitalization. In November 2014, <a href="http://business.financialpost.com/fp-tech-desk/apple-inc-tops-us700-billion-market-share-on-strong-iphone-and-ipad-demand?__lsa=3376-5d84">Apple's market cap</a> was $700 billion, which is higher than the GDP of all but 19 of the world's economies.</p> <p>Apple's stock price reached such a high price ($700) in June 2014 that the company decided to do a <a href="http://appleinsider.com/articles/14/04/29/why-apple-inc-decided-to-split-its-stock-7-1-">7&ndash;1 stock split</a>. The move to lower the stock price back to $100 was designed to attract more individual investors who could't afford buying the stock at $700. Given that Apple's current price is over $130 already, there are several financial pundits predicting that Apple's stock price may rise again to $700.</p> <h2>4. Best Buy</h2> <p>As more and more people are turning to online shopping, it may appear a bit confusing to include this chain of electronics superstores in this list. However, this once-ubiquitous big box store is enjoying a comeback.</p> <p>Amazon has claimed a lot of victims, such as Circuit City (liquidated in 2009) and Nobody Beats the Wiz (permanently closed since 2003), in its rise to the top. And Best Buy (<a href="http://finance.yahoo.com/q?s=BBY">NYSE:BBY</a>) certainly felt the squeeze as well. From a high of $58.32 per share back in May 2006, its stock tumbled to a low of $11.29 by December 2012.</p> <p>Times were tough for Best Buy. Earlier in 2012, the company had posted a $1.7 billion quarterly loss and had experienced 0% growth in revenue from the previous year. However, Best Buy powered on by closing underperforming stores, reorganizing the shopping experience at its locations, and streamlining its supply chain. These renewed efforts have positively impacted Best Buy's stock price, which currently trades around the $35 mark.</p> <p>Due to its large volatility, holding Best Buy stock is not for the faint of heart. Still, those investors that were in for the long run have been rewarded.</p> <p>Now, here's to wishing that you discover some of the greatest stock reversals of the next decade!</p> <p><em>What are other great stock reversals in the last decade that need to be on this list?</em></p> <p><em>(Disclaimer: I neither own any of these stocks nor receive compensation by the mentioned companies.)</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/the-4-greatest-stock-reversals-in-the-last-decade">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-10"> <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/if-youd-held-these-10-stocks-instead-of-sold-youd-be-rich-now">If You&#039;d Held These 10 Stocks Instead of Sold, You&#039;d Be Rich Now</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-top-5-index-funds-to-own-now">The Top 5 Index Funds to Own Now</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/2010-predictions-from-wall-street-and-main-street-whos-smarter">2010 Predictions from Wall Street and Main Street: Who&#039;s Smarter?</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/who-cares-about-where-the-stock-market-is-headed">Who Cares About Where The Stock Market Is Headed?</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-debate-between-buy-and-hold-vs-timing-the-market">The Debate Between Buy and Hold vs Timing The Market</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment reversals stock market volatility Wed, 13 May 2015 15:00:38 +0000 Damian Davila 1416510 at http://www.wisebread.com 7 Dumb Stock Picking Mistakes Even Smart Investors Make http://www.wisebread.com/7-dumb-stock-picking-mistakes-even-smart-investors-make <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-dumb-stock-picking-mistakes-even-smart-investors-make" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/man_thinking_newspaper_000053925278.jpg" alt="Smart man realizing he picked dumb stocks" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Everybody loves a winner.</p> <p>That explains why America seems to be obsessed with stories of amazing stock pickers, such as the New Jersey teen wonder who allegedly <a href="http://www.theverge.com/2014/12/3/7319277/whiz-kid-penny-stocks-smartphone-mobile-trader">turned $10,000 into $300,000</a> by trading penny stocks from his smartphone</p> <p>However, even some of the smartest (and luckiest!) investors make mistakes sometimes. Here are seven dumb mistakes to watch out for the next time you're picking investment options.</p> <h2>1. Having No Investment Goals</h2> <p>If you don't know where you're going, you'll never know when you get there.</p> <p>However deeply people may agree with this statement, there are still those who lack clear investment goals. Your first step in investing is defining these goals.</p> <p>Here are three examples of good ones:</p> <ul> <li>In order to avoid the extra cost of private mortgage insurance, you would like to save for a down payment that is at least 20% of a $300,000 apartment in your city within the next 10 years.<br /> &nbsp;</li> <li>You first child is just born and you would like to have $35,000 available for his or her college tuition by their 18th birthday.<br /> &nbsp;</li> <li>Planning to retire 33 years from today, you and your spouse calculated you'd need $3,000 every month to cover your expenses during retirement.</li> </ul> <p>Notice the two things that these goals have in common: a specific dollar amount and a target date. These two elements are the starting point for any discussion about investing. They allow you to establish a timeline and select benchmarks to evaluate your performance.</p> <p>Before you even think about stock picking, establish your investment goals. (See also: <a href="http://www.wisebread.com/5-dumb-401k-mistakes-smart-people-make?ref=seealso">5 Dumb 401(k) Mistakes Smart People Make</a>)</p> <h2>2. Ignoring Your Risk Tolerance</h2> <p>There are two key elements to determining your risk tolerance.</p> <p>First, there is your time horizon. A rule of thumb is that the longer your time horizon, the riskier your investments may be. Since you don't need the funds for quite a while, you can better sustain the ups and downs of the market and chase higher returns. On the other hand, if you need the funds a year from now, you're better off taking more conservative investments.</p> <p>Second is your available &quot;play money.&quot; A person with a net worth of $1 million is more likely to better stomach the price fluctuations of a $25,000 investment than a person with a net worth of $75,000. Also, don't forget about potential liquidity issues. The second individual would be in a really tough situation if he were to suddenly need those $25,000 to pay damages from a lawsuit or meet another type of big financial obligation.</p> <p>Pick investments according to your time horizon and bankroll.</p> <h2>3. Spending Instead of Investing</h2> <p>While some people are very eager to start stock picking, others think they can't even afford it.</p> <p>Or it could be that those others may be listening to their &quot;lizard brain&quot; a bit too much. The idea of the &quot;lizard brain&quot; refers to the instincts that helped our ancestors to survive back in the stone age. Given scarce resources and the ever-present possibility of death, our ancestors prefered to enjoy things right away instead of waiting.</p> <p>Old habits die hard. Given the choice of enjoying $500 right now or receiving $3,000 in five years, most of us would chose the first option. However, this is a bad idea.</p> <p>By refusing to invest even just a little bit, you're incurring a huge opportunity cost. For example, let's imagine that you make an initial investment to your 401(k) of $100. Assuming your 401(k) has a return rate of 5% compounded annually and you contribute $100 every month for 20 years, you would end up with $40,845.78.</p> <p>Start investing today. Right now. Even a little bit! 20 years from now, you'll be glad that you did.</p> <h2>4. Paying Too Much in Fees</h2> <p>This is one of Warren Buffett's <a href="http://www.usatoday.com/story/money/personalfinance/2013/10/26/warren-buffett-investment-advice/3188499/">top three investing mistakes</a> to avoid. (See also: <a href="http://www.wisebread.com/5-investors-with-better-returns-than-warren-buffett?ref=seealso">5 Investors With Better Returns Than Warren Buffett</a>)</p> <p>While you can't be 100% sure about the return of your stock picks, you can be 100% sure of how much money you're paying in management and trade fees. For example, if you were to invest $10,000 in the average actively managed U.S. mutual fund, you would pay $132 in fees. On the other, you would pay just $17 by investing the same $10,000 in the Vanguard Total Stock Market Index (VTSMX), the largest index mutual fund.</p> <h2>5. Trying to Beat the Market</h2> <p>Here's another reason to choose index mutual funds.</p> <p>Most actively managed funds fail to achieve returns above their respective benchmark. Only about 20%&ndash;35% of fund managers are able to &quot;beat the market.&quot; These are the pros that do this for a living. Are you sure that you can do better than them on your spare time while juggling your job and family life?</p> <p>Over the long-term, index funds are typically top performers and do better than 65%&ndash;75% of actively managed funds. And index funds cost you less than a fund manager, too.</p> <h2>6. Betting on a Single Stock</h2> <p>There are too many stories about people getting filthy rich by putting all their money on Apple stock.</p> <p>Before you decide to put all your eggs in one basket, consider the performances of these two other past media darlings.</p> <h3>Groupon</h3> <p>Launched in November 2008, Groupon quickly became the leader of the deal-of-the-day movement. Groupon became one of the fastest companies to reach a <a href="http://www.forbes.com/forbes/2010/0830/entrepreneurs-groupon-facebook-twitter-next-web-phenom.html">$1 billion valuation</a>. Heck, Groupon was doing so well that it turned down a <a href="http://www.businessinsider.com/why-groupon-said-no-to-google-2010-12">$6 billion buyout offer</a> from Google. However, an original investment of $10,000 in Groupon on November 7, 2011 would only be worth about $2,554.66 today.</p> <h3>Enron</h3> <p>It's hard to believe that Enron was once a media darling. Back in 2001, Enron's stock was priced at 70 times earnings and 6 times book value. Out of the 22 analysts covering Enron, 19 of them rated the stock a &quot;buy.&quot; The maximum stock price of $90 in August 2000 convinced several people to put all their nest eggs on Enron. A little over two years later, the stock was trading below $1.</p> <p>The lesson is that history tends to repeat itself, so don't bet all your money on a single stock. (See also: <a href="http://www.wisebread.com/10-investing-lessons-you-must-teach-your-kids?ref=seealso">10 Investing Lessons You Must Teach Your Kids</a>)</p> <h2>7. Not Rebalancing Your Portfolio</h2> <p>Last but not least, remember that asset prices vary over time.</p> <p>Your investment plan sets a target allocation of your monies in different types of investments. For example, you may have 50% in domestic stocks, 30% in foreign stocks, 20% in bonds, and 10% in T-bills.</p> <p>Let's imagine that your foreign stock holdings had a nice upward ride for the last five years. So, now they represent 50% of your total investment portfolio's value. It's a good idea to rebalance your portfolio to set back your allocation of funds to the target 30% so that you're not taking more risk than you're comfortable with.</p> <p>It's shocking how simple it can be to avoid these six investing mistakes.There's no secret to stock picking &mdash; it just requires planning and sticking to that plan. It may not sound exciting, but it's more likely to make you a profit. And isn't that why you really invest?</p> <p><em>What steps have you taken to fix your investment decisions?</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/7-dumb-stock-picking-mistakes-even-smart-investors-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-11"> <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-4-best-investments-for-lazy-investors">The 4 Best Investments for Lazy Investors</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-most-important-thing-youre-probably-not-doing-with-your-portfolio">The Most Important Thing You&#039;re Probably Not Doing With 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/9-safe-investments-that-arent-bonds">9 Safe Investments That Aren&#039;t Bonds</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/if-youd-held-these-10-stocks-instead-of-sold-youd-be-rich-now">If You&#039;d Held These 10 Stocks Instead of Sold, You&#039;d Be Rich Now</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/10-times-you-shouldnt-invest-in-stocks">10 Times You Shouldn&#039;t Invest in Stocks</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Mistakes portfolios risks stocks Tue, 12 May 2015 17:00:44 +0000 Damian Davila 1414192 at http://www.wisebread.com The Most Important Thing You're Probably Not Doing With Your Portfolio http://www.wisebread.com/the-most-important-thing-youre-probably-not-doing-with-your-portfolio <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-most-important-thing-youre-probably-not-doing-with-your-portfolio" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/calculations_000028679096.jpg" alt="Business man doing calculations" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Life changes, and so do financial markets. That's why it's important to periodically examine whether your portfolio still reflects your financial goals. &quot;Rebalancing&quot; is simply the process of bringing your portfolio's assets back to their original, planned percentage-mix of investment types. The reason for this is that some investments appreciate, while others depreciate over time, creating a different balance than you may have intended.</p> <h2>Why Rebalance?</h2> <p>One investing rule of thumb is that stock and bond prices move in opposite directions. Let's say you're 35, and allocate 65% of your portfolio to stocks and 15% to bonds. The economy is moving along nicely and you have a good year in the stock market and by the end of it, stocks represent 75% of your portfolio. This asset mix is out of alignment with your goals! To bring it back into balance, you will need to sell the over-weighted asset (stocks in this case), and purchase the under-weighted asset &mdash; bonds. This realigns your portfolio with your investment objectives.</p> <h2>How Often, How Far, and How Much: How Frequently Should You Rebalance?</h2> <p>There are three rebalancing strategies. How often you choose depends on whether you're still saving and re-investing the dividends, or retired and taking withdrawals.</p> <h3>Time Strategy</h3> <p>For a systematic approach, investors can follow the time-table strategy. This can be daily, monthly, quarterly, yearly, or whatever works. With this approach, it will not matter how far away your assets deviate from your goals. The only variable impacting your rebalancing decision is time. Of course, which frequency you choose should be determined based on your time horizon, risk tolerance, diversification strategy, and the costs to rebalance.</p> <p>But the average investor doesn't have the time nor resources for a daily &mdash; or even monthly &mdash; rebalancing strategy, and most of us choose less frequent rebalancing..</p> <h3>Threshold Strategy</h3> <p>With the threshold strategy, the one thing that will trigger a rebalance is deviation away from your target goals by a definitive amount, say 3%, 5%, or 10%. Deciding on this strategy could require daily, monthly, or quarterly rebalancing, or it may be that you won't need to rebalance for five, 10, or 15 years. Again, your investment goals should help you determine whether this strategy is appropriate for you.</p> <h3>Hybrid: Time and Threshold</h3> <p>Here, both the time and threshold strategies guide your decision to rebalance.</p> <p>You will rebalance your portfolio on a periodic time-table, but only if your assets deviate from your goals by a pre-determined amount. Therefore, if you reach your time schedule and your assets are below the threshold, you would not rebalance. Likewise, if your assets exceed the threshold, but you haven't reached the scheduled rebalancing date, you will wait to rebalance.</p> <p>For the average investor, rebalancing too frequently could result in higher tax costs (from selling assets) and added transaction fees. But many experts suggest taking a hard look at least once a year at whether your portfolio's asset mix still matches your intended goals.</p> <p><em>How often do you rebalance your portfolio?</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/the-most-important-thing-youre-probably-not-doing-with-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-12"> <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-safe-investments-that-arent-bonds">9 Safe Investments That Aren&#039;t Bonds</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-times-you-shouldnt-invest-in-stocks">10 Times You Shouldn&#039;t Invest in Stocks</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-4-best-investments-for-lazy-investors">The 4 Best Investments for Lazy Investors</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-dumb-stock-picking-mistakes-even-smart-investors-make">7 Dumb Stock Picking Mistakes Even Smart Investors 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/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 portfolios rebalancing stocks Thu, 07 May 2015 11:00:07 +0000 Qiana Chavaia 1412613 at http://www.wisebread.com Help, I Bought a Stock Dud! — What Now? http://www.wisebread.com/help-i-bought-a-stock-dud-what-now <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/help-i-bought-a-stock-dud-what-now" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/man_stress_laptop_000029627144.jpg" alt="Man stressed because he bought a dud stock" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We've all bought a stock that has failed to perform as expected, and we may have even lost a good chunk of change in the process. When you realize you've bought a &quot;dud&quot; of a stock, it's natural to feel a bit helpless. But things may not be as bad as they seem. Consider these ways to handle a bad stock investment:</p> <h2>1. Wait it Out</h2> <p>Unless you need the money soon (or you suspect the company is going out of business), there's not much downside to holding onto a stock, since the price will almost inevitably rise again. In fact, this is the approach most experts recommend &mdash; buy and hold a stock, staying steady through the dips.</p> <p>A company that seems like a dud now might have a great turnaround later. Consider Facebook (<a href="http://www.google.com/finance?cid=296878244325128">NASDAQ: FB</a>). Its much-anticipated initial public offering in 2012 was a bust, and the stock languished below $30 per share for months. Now it's trading above $80. (Disclosure: I own some shares of Facebook stock.)</p> <h2>2. Sell, and Buy Something Better</h2> <p>If you've lost your patience with a stock, it can under some circumstances be fine to consider investing your money elsewhere. But consider the cost implications of selling &mdash; such as short-term capital gains taxes, trading fees, and the costs associated with the new stock or fund. And once you sell, don't look too hard at the performance of the stock you unloaded &mdash; you might go crazy.</p> <h2>3. Sell to Balance a Capital Gain</h2> <p>If you have other stocks that you've sold for big gains, you can avoid a tax hit by selling your dud stock. In fact, if the losses exceed the gains, it can offset taxable ordinary income, as well. This is called tax-loss harvesting, and it's a great way to offload some underperforming stocks while avoiding a tax bill.</p> <h2>4. Buy More</h2> <p>Are you sure the stock is a dud? Or is it just undervalued? One man's &quot;dud&quot; could be another man's bargain. As the great investor Warren Buffett once said, &quot;The lower things go, the more I buy.&quot;</p> <p>For example, some experts recommend buying energy stocks now for this reason. While these stocks have been pummeled of late by low oil prices, they'll eventually rise again, and this may be a good opportunity to buy these stocks on the cheap.</p> <h2>5. Give it to Charity</h2> <p>If it stresses you out too much to hang on to a bad stock, give it away. There are many tax advantages to donating stock, and charities often like receiving stock because of the potential for increased value. And they won't be on the hook for any capital gains.</p> <h2>6. Get More Diversified</h2> <p>You shouldn't worry too much about a &quot;dud&quot; stock if you have a wide range of investments. Seek to hold a good mix of large, midcap, and smallcap stocks in various industries, and no single stock should comprise a significant percentage of your portfolio. It may also be worth it to explore international investments, real estate, and bonds. Index funds are an easy way to get diversified. The point is that if you have a good mix of investments, that underperforming stock shouldn't be a major source of anxiety.</p> <h2>7. Sell Short</h2> <p>If you are completely convinced a stock won't go up in value, you can profit off its poor performance by betting that its price will go down even more. When you short sell a stock, you borrow shares at one price, then buy them for real when the price goes down. This can serve as a hedge against the ownership of other shares that have lost value. It's important to note that short selling can result in <em>big </em>financial losses if you bet wrong, so it's truly a strategy for more experienced and well-funded investors.</p> <p><em>What actions do you take when your stocks underperform?</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/help-i-bought-a-stock-dud-what-now">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-13"> <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/10-times-you-shouldnt-invest-in-stocks">10 Times You Shouldn&#039;t Invest in Stocks</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/9-safe-investments-that-arent-bonds">9 Safe Investments That Aren&#039;t Bonds</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/if-youd-held-these-10-stocks-instead-of-sold-youd-be-rich-now">If You&#039;d Held These 10 Stocks Instead of Sold, You&#039;d Be Rich Now</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-dumb-investments-smart-people-make">5 Dumb Investments Smart People 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-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> Investment capital gains equities saving stocks Mon, 27 Apr 2015 11:00:06 +0000 Tim Lemke 1401146 at http://www.wisebread.com The Top 5 Index Funds to Own Now http://www.wisebread.com/the-top-5-index-funds-to-own-now <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-top-5-index-funds-to-own-now" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/man_reading_paper_000031064290.jpg" alt="Man deciding which index funds he should own now" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Can you tolerate some market volatility? Is investing in passively-managed index funds still part of your diversification strategy? Hang in there if it is, because <a href="http://www.wisebread.com/3-steps-to-getting-started-in-the-stock-market-with-index-funds">index funds</a> are still a good choice.</p> <p>If you're hot on the trail for index funds to invest in, here are the top five index funds to own right now.</p> <h2>1. Vanguard High Dividend Yield Index Fund Investor Shares (<a href="https://personal.vanguard.com/us/funds/snapshot?FundId=0623&amp;FundIntExt=INT">VHDYX</a>)</h2> <p>Morningstar rating: 5 stars</p> <p>This large capitalization fund was designed for investors seeking long-term growth and those who can withstand greater volatility. This is an income-focused fund that invests in large U.S. companies that tend to pay higher dividends. Some of its holdings include ExxonMobil, Proctor &amp; Gamble, and JP Morgan Chase, to name a few.</p> <h2>2. Vanguard PRIMECAP Fund Investor Shares (<a href="https://personal.vanguard.com/us/funds/snapshot?FundId=0059&amp;FundIntExt=INT">VPMCX</a>)</h2> <p>Morningstar rating: 5 stars</p> <p>A long-term capital appreciation fund that invests in large and mid-cap companies with an emphasis on the technology and health care sectors. The fund follows a well-established investment strategy of dividing its portfolio amongst several fund managers for diversity of thought. Its holdings include Texas Instruments, Inc., Eli Lily &amp; Co., FedEx Corp., and many others.</p> <h2>3. Vanguard PRIMECAP Core Fund (<a href="https://personal.vanguard.com/us/funds/snapshot?FundId=1220&amp;FundIntExt=INT">VPCCX</a>)</h2> <p>Morningstar rating: 5 stars</p> <p>The PRIMECAP Core Fund is very similar to its younger sibling, PRIMECAP Investor Shares. This is a large cap fund that invests using the investment strategies of multiple fund managers. The key difference is the fund has both value and growth perspectives. Some of its holdings include Texas Instruments, Inc., Eli Lily &amp; Co., Google, and Johnson &amp; Johnson.</p> <h2>4. Vanguard U.S. Value Fund (<a href="https://personal.vanguard.com/us/funds/snapshot?FundId=0124&amp;FundIntExt=INT">VUVLX</a>)</h2> <p>Morningstar rating: 4 stars</p> <p>This is a large to mid capitalization fund that remains vested in about 200 companies using a qualitative approach that seeks to identify undervalued stock. Due to its broad-market exposure, investors should expect greater volatility and therefore invest with a long-term investment horizon. Some of the fund's major players are Pfizer, Inc., AT&amp;T, Chevron, ExxonMobil, and Wells Fargo &amp; Co.</p> <h2>5. Vanguard Consumer Staples Index Admiral Shares (<a href="https://personal.vanguard.com/us/funds/snapshot?FundId=5484&amp;FundIntExt=INT">VCSAX</a>)</h2> <p>Morningstar rating: 4 stars</p> <p>This fund is comprised of U.S. consumer staples, such as Wal-Mart, Costco, Coca-Cola Co., and PepsiCo. As a result, the fund will realize volatility consistent with consumer behavior, and investors should expect greater fluctuations. This is a very high-risk investment and it's advisable that it is used to hedge an already well-balanced portfolio.</p> <p><em>Are index funds part of your portfolio? Which?</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/the-top-5-index-funds-to-own-now">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-14"> <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/if-youd-held-these-10-stocks-instead-of-sold-youd-be-rich-now">If You&#039;d Held These 10 Stocks Instead of Sold, You&#039;d Be Rich Now</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-4-greatest-stock-reversals-in-the-last-decade">The 4 Greatest Stock Reversals in the Last Decade</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/2010-predictions-from-wall-street-and-main-street-whos-smarter">2010 Predictions from Wall Street and Main Street: Who&#039;s Smarter?</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/who-cares-about-where-the-stock-market-is-headed">Who Cares About Where The Stock Market Is Headed?</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-debate-between-buy-and-hold-vs-timing-the-market">The Debate Between Buy and Hold vs Timing The Market</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment diversification index funds market volatility stock market Fri, 24 Apr 2015 11:00:07 +0000 Qiana Chavaia 1396634 at http://www.wisebread.com 10 Times You Shouldn't Invest in Stocks http://www.wisebread.com/10-times-you-shouldnt-invest-in-stocks <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-times-you-shouldnt-invest-in-stocks" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="/files/fruganomics/imagecache/250w/blog-images/woman_thinking_stocks_000030689114_0.jpg" alt="Woman considering when she shouldn&#039;t invest in stocks" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Investing in stocks is one of the best ways to build wealth over time, since on average, the stock market returns 9% per year. But there are many instances when buying stocks might not make sense. If you're on the fence about whether to enter the stock market, ask yourself if any of these apply to you.</p> <h2>1. You're About to Retire</h2> <p>If you are right on the cusp of retirement and need to rely on your savings when you stop working, it's best to avoid riskier stocks and place it in safer investments, such as bonds or cash. Most experts recommend that bonds and safer investments should comprise the same percentage of your portfolio as your age. So, a 65-year-old investor would want about 65% of their portfolio in bonds and lower-risk investments, and only 35% in stocks (which tend to be higher-risk). The last thing you want is for your nest egg to rapidly decline in size right as you plan to dip into it.</p> <h2>2. You Need the Money Right Away</h2> <p>Investing in stocks isn't really for people looking to make a quick buck. Sure, you might make 10% in one month, but you might also lose just as much. If this is cash you need soon for a new car, down payment on a home, or a new child, you're best off keeping it somewhere safer and more liquid.</p> <h2>3. You Haven't Researched the Most Tax-Advantaged Ways to Invest</h2> <p>It's relatively easy to buy individual stocks, but have you explored buying these via tax-advantaged accounts, such as a Roth IRAs and 401(k)s? If not, you may find yourself owning stocks in regular brokerage accounts, meaning you'll be on the hook right away for any taxes on dividends and capital gains. Do a little bit of homework on tax-advantaged vehicles before you invest, and you'll end up saving thousands of dollars in the long run.</p> <h2>4. You Don't Have an Emergency Fund</h2> <p>Investing in stocks is a great way to build wealth, but it doesn't really make sense to put money in the markets if you have no cash savings. Before you invest, work to ensure that you have enough liquid savings to cover at least three months of expenses, so that you're not financially crippled by a job loss, major medical expense, or other crisis.</p> <h2>5. You Freak Out Over Market Fluctuations</h2> <p>It's a simple fact that markets go up and down. There may be days you'll lose hundreds &mdash; or even thousands of dollars. Can you stomach this? If you're losing sleep over a single day's losses, perhaps you're not ready for stock investing. Before jumping in, take some time to get acquainted with the movement of markets. Becoming comfortable with the ups and downs will make you a more patient and happier investor.</p> <h2>6. You Can Only Invest a Very Small Amount at a Time</h2> <p>When you buy and sell stocks, you will usually pay a commission on each trade. This costs less than $10 at most discount brokerage firms, but if you only plan to buy a few shares of stock, that could add up to a big chunk of your return. Generally speaking, it's more efficient to buy larger quantities of shares, if you can. (There are some caveats to this. Many brokerage firms offer commission-free trades on many investments, so it's possible to buy small numbers of shares. But your choices are limited.)</p> <h2>7. You Have a Lot of High-Interest Debt</h2> <p>If you have thousands of dollars in credit card debt and are paying 13% in interest, is it wise to place your money in stocks? Sure, there may be stretches of time where investment returns are higher than your interest rates, but most of the time you are better off using money to pay down debt. In the long run, eliminating debt will free up more money to invest, putting you in better financial shape.</p> <h2>8. Stock Valuations Are Completely Insane</h2> <p>I am not a believer that you should always &quot;sell high&quot; and &quot;buy low.&quot; If you are investing for the long haul, it's not worth stressing over whether you're getting into the markets at the right time. Young investors, in particular, are best off just getting started as soon as they can. That being said, there may be instances when there is broad agreement that stocks are overpriced based on a company's earnings, or other factors. In these cases, it might make sense to wait for the market to cool a bit before pouncing. Pay close attention to things like a company's price-to-earnings ratio, and how close a stock price is to a 52-week high.</p> <h2>9. Interest Rates Start Shooting Way Up</h2> <p>Right now, interest rates are still historically quite low, but there have been instances when interest rates were so high that you'd end up with better returns from your savings account than the S&amp;P 500. If economic conditions suggest interest rates might rise dramatically, it might make sense to hold off on investing in stocks. It's worth noting, however, that interest rates have been quite low for many years now, and that past predictions of rate jumps didn't materialize.</p> <h2>10. You Really Have No Idea</h2> <p>It may seem like everyone is telling you to invest. But you just have no idea how to get started or what to do. That's okay! If you're unfamiliar with investing, you're more likely to make a mistake that will cost you money. Ignore outside pressure and take the time to learn about the stock market and the mechanics of investing before putting your money at risk.</p> <p><em>Have there been other occasions in which stocks weren't the right choice for you?</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/10-times-you-shouldnt-invest-in-stocks">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-15"> <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-safe-investments-that-arent-bonds">9 Safe Investments That Aren&#039;t Bonds</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-dumb-investments-smart-people-make">5 Dumb Investments Smart People 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-most-important-thing-youre-probably-not-doing-with-your-portfolio">The Most Important Thing You&#039;re Probably Not Doing With 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/help-i-bought-a-stock-dud-what-now">Help, I Bought a Stock Dud! — What Now?</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-dumb-401k-mistakes-smart-people-make">5 Dumb 401(k) Mistakes Smart People Make</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment bonds debt emergency funds retirement saving stocks Wed, 22 Apr 2015 15:00:09 +0000 Tim Lemke 1392474 at http://www.wisebread.com