Investment http://www.wisebread.com/taxonomy/term/4808/all en-US Should You Treat Your Social Security Benefits Like a Bond? http://www.wisebread.com/should-you-treat-your-social-security-benefits-like-a-bond <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/should-you-treat-your-social-security-benefits-like-a-bond" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/social_security_card_with_currency_and_dice.jpg" alt="Social Security Card with Currency and Dice" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>As you may know, one of your most important investment decisions has to do with <em>asset allocation </em>&mdash; that is, how much of your portfolio should be invested in various asset classes, such as stocks and bonds. The optimal answer has mostly to do with your age and risk tolerance.</p> <p>When you're young, you have time to ride out the market's ups and downs, so it's generally best to tilt your portfolio toward riskier but potentially more rewarding investments, such as stocks. As you get older, it's wise to change that mix, reducing your stock exposure and increasing your use of less volatile investments, such as bonds.</p> <p>Your risk tolerance also plays a role. If you're comfortable with risk, that may point you toward a more stock-heavy portfolio. If you prefer the safer side of the spectrum, you may want a more conservative investment mix.</p> <p>But here's where our esoteric-sounding opening question comes in: What if you could put a present value on your future Social Security benefits? And what if you added that amount to your current investment portfolio? That would make your portfolio much larger, and it would change how you're investing, which is exactly what investing legend and Vanguard Founder Jack Bogle recommends. (See also: <a href="http://www.wisebread.com/the-basics-of-asset-allocation?ref=seealso" target="_blank">The Basics of Asset Allocation</a>)</p> <h2>Running the numbers</h2> <p>Let's say you have investments totaling $450,000 and your optimal asset allocation is 60 percent stocks and 40 percent bonds. That means you should have $270,000 invested in stocks and $180,000 in bonds.</p> <p>Let's also assume your estimated Social Security benefits will be $1,250 per month, or $15,000 per year, beginning at age 67 (you can see your estimated benefits by making an account the Social Security Administration's <a href="https://secure.ssa.gov/RIL/SiView.do" target="_blank">website</a>). This exercise also requires that you make an assumption about your life expectancy; let's assume you'll live another 20 years after you start collecting Social Security.</p> <p>Bogle would suggest valuing your portfolio at $750,000. That's $450,000 of <em>actual</em> investments plus $300,000 of assumed future Social Security benefits ($15,000 per year times 20 years). There are other ways of determining the present value of your future benefits, but taking the annual estimated benefit amount and multiplying it by the number of years you expect to live after starting to claim benefits is the simplest.</p> <p>Applying a 60/40 allocation to your newly inflated $750,000 portfolio would mean your optimal investment mix is $450,000 in stocks and $300,000 in bonds. Bogle suggests that since Social Security is a virtually guaranteed benefit, that $300,000 &quot;asset&quot; is a <em>conservative </em>asset &mdash; more like a bond than a stock. That means you're free to invest your entire actual $450,000 portfolio in stocks. (See also: <a href="http://www.wisebread.com/7-reasons-youre-never-too-old-to-buy-stocks?ref=seealso" target="_blank">7 Reasons You're Never Too Old to Buy Stocks</a>)</p> <h2>What could go wrong?</h2> <p>Proponents of this idea, such as Bogle, point out that the much more aggressive approach it would enable you to take with your actual investments would give you the potential to grow your nest egg much larger. Historically, stocks have far outperformed bonds, so in theory that's correct.</p> <p>However, it would also mean taking on much more risk than you are right now and having to endure much more volatility than you may be comfortable with, especially as you get older. For example, how would you like to be 65 years old, have your entire retirement portfolio invested in equities, go through a bear market similar to 2008, and lose 50 percent?</p> <p>Plus, let's say that leaving an inheritance is important to you. What if you go through a 2008-style bear market when you're in your 60s or 70s and that assumption you made about living to age 87 doesn't work so well? The only part of your portfolio that would be left behind is your <em>actual </em>portfolio, which just got cut in half.</p> <p>What about the rest of your portfolio &mdash; the $300,000 of future Social Security benefits? The minute you die, the value of those benefits drops to $0. Are you comfortable with that?</p> <p>One more concern is whether Social Security will even exist by the time you retire. While it's hard to imagine the organization ever completely disappearing, it's much easier to envision a day when benefits will be reduced based on household income &mdash; so-called means testing. The amount of money current workers are paying into the program simply isn't enough to continue paying beneficiaries the full amount they are owed indefinitely.</p> <h2>Not for the faint of heart</h2> <p>Only if you are extremely risk tolerant should you consider factoring future Social Security benefits into your asset allocation. Even then, you would be wise to factor in only a <em>portion</em> of those benefits.</p> <p>For most, however, because of the added stress this approach would bring, especially at a time of life when peace of mind will be increasingly important, it probably doesn't make sense.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/should-you-treat-your-social-security-benefits-like-a-bond">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/why-playing-it-safe-with-your-money-is-actually-risky">Why Playing It Safe With Your Money Is Actually Risky</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-the-risk-averse-can-get-into-the-stock-market">How the Risk Averse Can Get Into the Stock Market</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-reasons-youre-never-too-old-to-buy-stocks">7 Reasons You&#039;re Never Too Old to Buy Stocks</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-types-of-investors-which-one-are-you">8 Types of Investors — Which One Are You?</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-essentials-for-building-a-profitable-portfolio">5 Essentials for Building a Profitable Portfolio</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement asset allocation benefits portfolio predictions risk social security stock market tolerance volatility Thu, 17 May 2018 08:30:19 +0000 Matt Bell 2138949 at http://www.wisebread.com 7 Ways to Compare Stock Market Investments http://www.wisebread.com/7-ways-to-compare-stock-market-investments <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-ways-to-compare-stock-market-investments" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_uses_a_paper_fortune_teller_to_make_multiple_decisions.jpg" alt="Man uses a paper fortuneteller to make multiple decisions" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When investing, we are faced with an overwhelming menu of things to choose from. There are tens of thousands of stocks, a mind-boggling number of mutual funds and ETFs, plus a dizzying array of bonds. How can we make sense of any of this to decide what makes a good investment?</p> <p>It helps to know the basic elements of an investment so you know how to compare one product to another. This may require some work, but it can often be fun to dig into the details of why one investment is better than another. Here are some key things to examine.</p> <h2>1. Growth potential</h2> <p>Most people that are far away from retirement age seek investments that will grow over time. Ideally, they're looking for investments that will allow them to build a sizable retirement fund and outpace the returns offered by a basic bank account. There are some investments, such as stocks, that historically rise in value and are great for younger investors. Mutual funds and ETFs can offer solid growth as well. Bonds, however, are more likely to offer lower, but more stable returns.</p> <p>As you become savvier in grasping the inner workings of specific investments, you can become skilled at knowing when an investment is undervalued and perhaps poised for big growth &mdash; or overvalued and ready for a price decline. Understanding the growth potential in certain investments can help you find the right mix for your individual portfolio. (See also: <a href="http://www.wisebread.com/9-ways-to-tell-if-a-stock-is-worth-buying?ref=seealso" target="_blank">9 Ways to Tell If a Stock Is Worth Buying</a>)</p> <h2>2. Sector and industry</h2> <p>If you don't know a lot about a stock investment at first, it helps to learn what the company does to make its money. Companies are grouped into sectors based on the type of business they operate in; within sectors, there are smaller segments called industries. Typically, stocks are grouped into 11 different sectors &mdash; including health care, financials, energy, and consumer staples, to name a few &mdash; and there can be anywhere from two to 15 industries in each sector. A well-balanced stock portfolio will have some exposure to all of these sectors and as many of these industries as possible.</p> <p>When investing, it helps to learn how these sectors perform compared to the broader stock market. Some sectors perform better than the market, while others underperform. Some are resilient in tough economic times, while others are more vulnerable to bad news. Understanding these industries can help you make smart comparisons when evaluating stocks.</p> <h2>3. Market capitalization and asset class</h2> <p>Stocks are usually categorized by size, also referred to as market capitalization. A company's market capitalization, or market cap, refers to the value of all outstanding shares (which is its stock price multiplied by the total number of shares outstanding).</p> <p>There are large-cap stocks, which comprise the largest publicly traded companies. There are mid-cap stocks, which are medium-sized firms. And there are small-cap and even micro-cap stocks, comprising smaller companies. These categories are also called asset classes.</p> <p>Generally speaking, large-cap stocks offer solid, steady growth potential for shareholders. Shares of smaller companies can offer bigger returns, but may also be riskier investments. Understanding the unique characteristics of stocks in each asset class can help you make comparisons between investments and find stocks that make sense for your financial goals.</p> <h2>4. Risk and volatility</h2> <p>Stocks of smaller companies can be riskier than some other investments. Understanding risk &mdash; and your own tolerance for it &mdash; can help you compare investments with confidence.</p> <p>It's important to note that the potential for higher returns comes with the potential for higher risk. Finding that risk-reward sweet spot is the key to successful investing. Too much risk can result in you losing a lot of money. Avoiding risk altogether may prevent you from getting the returns needed to reach your financial goals.</p> <p>Volatility and risk go hand in hand. When an investment goes up and down in value rapidly, we often say it's a volatile investment. There are ways to make money off that volatility, but for most investors, it's best to see steadier, consistent returns. (See also: <a href="http://www.wisebread.com/how-the-risk-averse-can-get-into-the-stock-market?ref=seealso" target="_blank">How the Risk Averse Can Get Into the Stock Market</a>)</p> <h2>5. Earnings, and earnings per share</h2> <p>Companies make money. They also spend it. When companies make more money than they spend, that's usually a good thing for everyone, including investors. This extra money is often referred to as net earnings. And as an investor, you want to see earnings increase over time.</p> <p>When comparing two companies in the same industry, it can help to examine earnings to see which may be doing better financially. But it's also important to look at earnings in the context of a company's size. To do this, simply take the earnings total and divide it by the number of shares outstanding. So, a company with $9 million in earnings and 20 million shares would have earnings per share of 45 cents. (See also: <a href="http://www.wisebread.com/beginners-guide-to-reading-a-stock-table?ref=seealso" target="_blank">Beginner's Guide to Reading a Stock Table</a>)</p> <h2>6. Financial news</h2> <p>Sometimes, just paying attention to the headlines can help you grasp whether an investment is a good one or not. Financial news can let you know of macroeconomic trends that may help or hurt certain investments, and update you on specific news regarding companies or products. When trying to decide between investments, do a quick news search to see if there's anything big you need to know. You don't have to go overboard; you can overwhelm yourself reading financial magazines and watching CNBC all day. But staying generally informed can certainly be helpful.</p> <h2>7. Dividends and dividend yields</h2> <p>Many companies choose to distribute earnings to shareholders on a quarterly basis. This is great if you are a shareholder, because it's free income just for owning shares. When examining dividends, you should look at both the amount of the dividend and the &quot;yield,&quot; which is the amount when compared to the share price.</p> <p>For example, a company may pay shareholders 50 cents per share they own every quarter. That's the dividend yield. If shares of the company are priced at $35, the yield is about 1.4 percent per quarter, or 5.6 percent annually. When examining dividends, look to see if a company has a history of maintaining or even increasing dividends each year. If they do, that's a sign of a company on strong financial footing.</p> <p>Keep in mind that if a company doesn't distribute dividends, that's not necessarily a bad thing. Many fast-growing companies choose to instead reinvest their earnings into business operations, and this can often help boost growth and make the company more valuable over time. Amazon may be the best example of a strong company that does not pay dividends.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F7-ways-to-compare-stock-market-investments&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F7%2520Ways%2520to%2520Compare%2520Stock%2520Market%2520Investments.jpg&amp;description=7%20Ways%20to%20Compare%20Stock%20Market%20Investments"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/7%20Ways%20to%20Compare%20Stock%20Market%20Investments.jpg" alt="7 Ways to Compare Stock Market Investments" width="250" height="374" /></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-compare-stock-market-investments">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-3-rules-every-mediocre-investor-must-know">The 3 Rules Every Mediocre Investor Must Know</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/beginners-guide-to-reading-a-stock-table">Beginner&#039;s Guide to Reading a Stock Table</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-ways-to-tell-if-a-stock-is-worth-buying">9 Ways to Tell If a Stock is Worth Buying</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/dont-be-fooled-by-an-investments-rate-of-return">Don&#039;t Be Fooled by an Investment&#039;s Rate of Return</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-questions-to-ask-before-buying-any-stock">8 Questions to Ask Before Buying Any Stock</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment comparing investments dividends earnings ETFs historical performance market capitalization mutual funds returns stocks volatility Mon, 23 Apr 2018 08:30:09 +0000 Tim Lemke 2130606 at http://www.wisebread.com Best Money Tips: How to Start Trading Cryptocurrency http://www.wisebread.com/best-money-tips-how-to-start-trading-cryptocurrency <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-how-to-start-trading-cryptocurrency" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/bitcoin_cryptocurrency_930264196.jpg" alt="Learning how to trade cryptocurrency" title="" class="imagecache imagecache-250w" width="250" height="140" /></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 articles on cryptocurrency trading for beginners, how to build a minimalist pantry, and tips for planning a debt-free vacation.</p> <h2>Top 5 Articles</h2> <p><a href="https://www.dumblittleman.com/cryptocurrency-trading-for-beginners/">Cryptocurrency Trading for Beginners: How Can You Get Started?</a> &mdash; Know your options and the best investment strategies for cryptocurrency. [Dumb Little Man]</p> <p><a href="https://www.raisingsimple.com/minimalist-pantry/">How to Build a Minimalist Pantry</a> &mdash; Creating an efficient pantry requires setting new rules for a new system. It may feel clunky at first, but once you get the rhythm down, it's hardly any work to keep it tidy and well-stocked. [Raising Simple]</p> <p><a href="https://couplemoney.com/travel/debt-free-vacations-how-to-do-it/">Planning For Your Debt Free Vacation</a> &mdash; A debt-free vacation starts with a lot of planning and discussion. [Couple Money]</p> <p><a href="https://organizingmoms.com/easy-budget-envelope-trick/">The Easy Envelope System That Will Simplify Your Budget</a> &mdash; You can use this envelope system not only with cash, but with credit/debit cards or checks, too. [Organizing Moms]</p> <p><a href="https://timemanagementninja.com/2018/04/5-tips-to-build-a-free-time-savings-account/">5 Tips to Build a Free Time Savings Account</a> &mdash; Working ahead and getting things done early allows you to stay on top of your commitments and have a safe buffer of time to handle unexpected curveballs. [Time Management Ninja]</p> <h2>Other Essential Reading</h2> <p><a href="https://www.popsugar.com/smart-living/Free-Printable-Goal-Sheets-44467993">16 Printable Goal Sheets to Help You Stay on Track This Year</a> &mdash; Some of these printables help you track your progress, while others will make your objectives more actionable. [PopSugar Smart Living]</p> <p><a href="https://thetinylife.com/guide-to-dehydrating-food/">Your Complete Guide to Dehydrating Food</a> &mdash; Dehydration and canning are two popular food preservation methods, but dehydration is especially great because it's cheaper and easier for beginners than canning. [The Tiny Life]</p> <p><a href="https://www.getrichslowly.org/building-confidence/">How to build confidence and destroy fear</a> &mdash; Irrational fears and anxieties prevent you from enjoying life, but action is the antidote to fear. [Get Rich Slowly]</p> <p><a href="https://orgjunkie.com/2018/04/manage-spring-cleaning-chores.html">The Less Overwhelming Way to Manage Spring Cleaning Chores</a> &mdash; Cleaning isn't most people's idea of fun, but it's necessary. You can add systems and routines into your life to make sure the cleaning chores actually get done. [Organizing Junkie]</p> <p><a href="https://www.csmonitor.com/Technology/2018/0413/Researchers-develop-autonomous-vehicles-to-help-the-blind">Researchers develop autonomous vehicles to help the blind</a> &mdash; Researchers outside of the auto industry are developing data and software in an effort to meet the needs of the visually impaired when autonomous cars become commonplace. [The Christian Science Monitor]</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-how-to-start-trading-cryptocurrency">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/what-is-cryptocurrency-anyway">What Is Cryptocurrency, Anyway?</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/should-you-treat-your-social-security-benefits-like-a-bond">Should You Treat Your Social Security Benefits Like a Bond?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-make-sure-you-dont-run-out-of-money-in-retirement">How to Make Sure You Don&#039;t Run Out of Money in Retirement</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/did-your-parents-give-you-a-whole-life-insurance-policy-heres-what-to-do-with-it">Did Your Parents Give You a Whole Life Insurance Policy? Here&#039;s What to Do With It.</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/treasury-bills-for-ordinary-folks">Treasury bills for ordinary folks</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment best money tips cryptocurrency Wed, 18 Apr 2018 08:30:10 +0000 Amy Lu 2133241 at http://www.wisebread.com Best Money Tips: Investing Rules You Should Know By Heart http://www.wisebread.com/best-money-tips-investing-rules-you-should-know-by-heart <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-investing-rules-you-should-know-by-heart" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/investing_money_illustration_908628566.jpg" alt="Learning important investment rules" title="" class="imagecache imagecache-250w" width="250" height="140" /></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 articles on investing rules you should know by heart, the best fad diets that actually work, and smart things to do with your tax refund.</p> <h2>Top 5 Articles</h2> <p><a href="https://www.usatoday.com/story/money/personalfinance/retirement/2018/04/06/5-investing-rules-you-should-know-by-heart/33460455/">5 investing rules you should know by heart</a> &mdash; Don't invest every spare dollar you have. While investing is important, you also need to have accessible cash for the next two years' expenses. [USA Today]</p> <p><a href="https://www.lifehack.org/698429/fad-diets-worth-the-hype">The Top Fad Diets That Are Actually Worth the Hype</a> &mdash; Most fad diets come and go in the blink of an eye, but these have actually passed the test of time. [Lifehack.org]</p> <p><a href="https://www.fromfrugaltofree.com/what-to-do-with-your-tax-refund/">Three Things To Do With Your Tax Refund</a> &mdash; Here are three things you can do with your tax refund that will lead to a healthier financial life. [From Frugal To Free]</p> <p><a href="https://www.popsugar.com/smart-living/Bedroom-Organization-Tips-22309085">11 Simple Tips For Bedroom Organization</a> &mdash; Invest in tall furniture that gives you vertical storage without taking up much space. [PopSugar Smart Living]</p> <p><a href="https://everythingfinanceblog.com/24279/insourcing-save-money.html">Insourcing 101: 5 Things You Can Do On Your Own To Save Money</a> &mdash; When you pay someone to do something for you, is it because you don't have the time to do it yourself, or is it because you don't know how? [Everyday Finance]</p> <h2>Other Essential Reading</h2> <p><a href="https://ryanholiday.net/14-ways-to-make-journaling-one-of-the-best-things-you-do-in-2018/">14 Ways To Make Journaling One Of The Best Things You Do In 2018</a> &mdash; Not everyone has an easy time journaling, but there's no denying the benefits of this habit. Follow these tips and best practices to help you get in to journaling and do it well. [Ryan Holiday]</p> <p><a href="http://www.thefrugalgirl.com/2018/04/tuesday-tip-store-leftover-paint-in-food-jars/">Store leftover paint in food jars</a> &mdash; Save leftover paint in glass food jars or plastic food containers. This allows you to save space, and the sealed containers ensure that your paint won't dry out. [The Frugal Girl]</p> <p><a href="http://www.marcandangel.com/2018/04/08/31-five-second-reminders-that-will-make-calmness-your-superpower/">31 Five-Second Reminders that Will Make Calmness Your Superpower</a> &mdash; These simple reminders can help you stay calm throughout the day. [Marc &amp; Angel Hack Life]</p> <p><a href="https://www.getorganizedwizard.com/blog/2018/04/10-tips-to-get-your-home-organized-when-on-a-budget/">9 Tips To Get Your Home Organized When On A Budget</a> &mdash; Organize the items in a messy drawer with a metal or plastic meal tray. [Get Organized Wizard]</p> <p><a href="http://www.asianefficiency.com/motivation/5-ways-turn-unproductive-day-around/">5 Ways to Turn an Unproductive Day Around</a> &mdash; It's easy to give up on days where you do everything right but everything still goes wrong. But before you do, try these strategies to turn your day around. [Asian Efficiency]</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-investing-rules-you-should-know-by-heart">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-investing-basics-that-can-make-you-rich">5 Investing Basics That Can Make You Rich</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/should-you-treat-your-social-security-benefits-like-a-bond">Should You Treat Your Social Security Benefits Like a Bond?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-make-sure-you-dont-run-out-of-money-in-retirement">How to Make Sure You Don&#039;t Run Out of Money in Retirement</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/did-your-parents-give-you-a-whole-life-insurance-policy-heres-what-to-do-with-it">Did Your Parents Give You a Whole Life Insurance Policy? Here&#039;s What to Do With It.</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/treasury-bills-for-ordinary-folks">Treasury bills for ordinary folks</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment best money tips investing rules Fri, 13 Apr 2018 08:30:10 +0000 Amy Lu 2131481 at http://www.wisebread.com Best Money Tips: Turning Your Home Into an Investment http://www.wisebread.com/best-money-tips-turning-your-home-into-an-investment <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-turning-your-home-into-an-investment" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_outside_house_905899112.jpg" alt="Couple turning their home into an investment" title="" class="imagecache imagecache-250w" width="250" height="140" /></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 articles on how to turn your home into an investment, how to choose the right accountability partner to help you reach your goals, and a guide to finding land for your tiny house.</p> <h2>Top 5 Articles</h2> <p><a href="https://everythingfinanceblog.com/24226/turn-your-home-into-an-investment.html">How to Turn Your Home Into an Investment</a> &mdash; Even if you're not looking to make some extra income with your home, you can still do a few things to build equity in case you decide to sell one day or have to take out a second mortgage. [Everything Finance]</p> <p><a href="https://adebtfreestressfreelife.com/accountability-partner/">How To Choose The Right Accountability Partner</a> &mdash; When you're trying to adopt new habits or change an aspect of your life, it helps to have an accountability partner who will help you stay on track. [A Mess Free Life]</p> <p><a href="https://thetinylife.com/the-ultimate-guide-to-finding-land/">The Ultimate Guide To Finding Land for Your Tiny House or Homestead</a> &mdash; Finding and buying land suitable for your tiny house or homestead can be tricky. To figure out how much land you actually need, make a list of everything you want to do on that land and how much space it requires. [The Tiny Life]</p> <p><a href="http://www.newminimalism.com/blog/how-to-be-a-minimalist-with-a-newborn">6 Ways to Stay Simple and Sane With a Newborn</a> &mdash; Don't try to buy all your baby supplies ahead of time. Your child may surprise you with their preferences, and your own preferences and needs will evolve, too. [New Minimalism]</p> <p><a href="https://www.becomingminimalist.com/20-places-to-donate-used-books/">20 Places to Donate Used Books</a> &mdash; Here are places you can donate your books where they will continue to enrich and improve other people's lives &mdash; just remember to call ahead to make sure your books are actually needed. [Becoming Minimalist]</p> <h2>Other Essential Reading</h2> <p><a href="https://www.getrichslowly.org/quick-wins/">Quick money wins to help you feel more in control of your finances</a> &mdash; These quick wins will give you the financial confidence you need to make better money decisions in the long run. [Get Rich Slowly]</p> <p><a href="https://www.dumblittleman.com/improve-it-skills/">6 Ways to Constantly Improve IT Skills</a> &mdash; Technology is always developing&hellip;and so should your IT skills. [Dumb Little Man]</p> <p><a href="https://www.pickthebrain.com/blog/9-tips-on-how-to-overcome-fear-of-public-speaking-for-introverts/">9 Tips on How to Overcome Fear of Public Speaking for Introverts</a> &mdash; Remember to smile! It's a good way to connect with your audience and can help you feel less stressed. [Pick The Brain]</p> <p><a href="http://nourishingminimalism.com/blog/minimalist-playroom-better-kids/">Why a Minimalist Playroom is Better for Kids</a> &mdash; When it comes to toys, less is often more beneficial for your kids. [Rachel Jones]</p> <p><a href="https://www.morewithlesstoday.com/recycle-donate-or-sell-old-gadgets/">Places to Recycle, Donate or Sell Old Gadgets &ndash; Cash in on Spring Cleaning</a> &mdash; Some places allow you to trade in or cash out your old electronics like computers, cellphones, digital cameras, video games, and printers. [More With Less Today]</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-turning-your-home-into-an-investment">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-basics-of-asset-allocation">The Basics of Asset Allocation</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/investment-gains-taxes-increase-the-worst-tax-policy-ever">Investment Gains Taxes Increase - The Worst Tax Policy Ever?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-does-the-fannie-mae-and-freddie-mac-bailout-affect-you">How does the Fannie Mae and Freddie Mac bailout affect you?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-easy-ways-to-invest-in-real-estate-without-buying-real-estate">3 Easy Ways to Invest in Real Estate (Without Buying Real Estate)</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-make-the-most-of-your-401K">How to Make the Most of Your 401K</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Real Estate and Housing best money tips investment Fri, 06 Apr 2018 08:30:09 +0000 Amy Lu 2129031 at http://www.wisebread.com 6 Investment Truths to Remember When the Stock Market Is Down http://www.wisebread.com/6-investment-truths-to-remember-when-the-stock-market-is-down <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-investment-truths-to-remember-when-the-stock-market-is-down" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/stock_market_has_a_bad_day.jpg" alt="Stock market has a bad day" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Forget Halloween &mdash; February 5, 2018 stands as the new scariest day. On that day, the Dow Jones industrial average (DJIA) plunged almost 1,600 points, marking its biggest point decline in history during a trading day. If you felt like you wanted to sell off all of your stocks and take the money, you were not alone. Still, it's at times like these that you need to keep a cool head and stick to your original financial plan. Here are a few things to remember when the stock market takes another dive. (See also: <a href="http://www.wisebread.com/6-confidence-inspiring-facts-about-the-stock-market?ref=seealso" target="_blank">6 Confidence-Inspiring Facts About the Stock Market</a>)</p> <h2>1. Historical average return of stocks is close to 10 percent</h2> <p>Take it from Sir John Templeton, who created one of the world's largest and most successful international investment funds: &quot;The four most dangerous words in investing are 'This time it's different.'&quot; (See also: <a href="http://www.wisebread.com/14-of-the-coolest-sayings-about-investing" target="_blank">14 of the Coolest Sayings About Investing</a>)</p> <p>While losing 1 percent of your 401(k) balance on a single day may seem terrible, the reality is that it's probably going to be a small hiccup on an ever-increasing journey. The average return of the S&amp;P 500 from 1968 to 2017 was 10.05 percent. Even when you take a look at a smaller period of time, this benchmark of the health of the overall stock market performs quite well. The S&amp;P 500's average return for the 2008&ndash;2017 period was 8.42 percent.</p> <h2>2. The longer the holding period, the higher the average return</h2> <p>The concept of &quot;buy and hold&quot; has been around for quite some time, and it's a key thing to remember when the market looks rocky. Experts have long recommended riding out the rough times.</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; wrote former Federal Reserve Chairman Alan Greenspan. (See also: <a href="http://www.wisebread.com/3-pearls-of-financial-wisdom-from-alan-greenspan?ref=seealso" target="_blank">3 Pearls of Financial Wisdom From Alan Greenspan</a>)</p> <p>Warren Buffett, better known as The Oracle of Omaha, famously echoed the sentiment: &quot;If you aren't willing to own a stock for 10 years, don't even think about owning it for 10 minutes.&quot; (See also: <a href="http://www.wisebread.com/the-5-best-pieces-of-financial-wisdom-from-warren-buffett?ref=seealso" target="_blank">The 5 Best Pieces of Financial Wisdom From Warren Buffett</a>)</p> <p>Here's an example of why buy-and-hold holds true: The S&amp;P 500 index increased 21.64 percent and 102.50 percent during the 2016&ndash;2017 and 2000&ndash;2017 periods, respectively. In investing, it truly pays off to go the distance.</p> <h2>3. Great time to pick up bargains</h2> <p>Think about the last time that you bought that new car, fancy new outfit, or high-tech 4K TV that you're so proud of. You probably spent days watching like a hawk for the moment that a deal would come up. When it did, you jumped on it. So, why would buying equities be any different? Wouldn't you also want to buy a share of a well-diversified portfolio or the stock of a great company at a discount?</p> <p>If you keep in mind that the historical returns of stocks is close to 10 percent and you're planning to buy equities anyway, do consider buying when stock prices are low. After all, you have heard of &quot;buy low, sell high,&quot; right?</p> <h2>4. Tolerance to risk changes over time</h2> <p>From tying the knot, to buying your first home, to being just five years away from retirement, several milestones will affect your perspective on life. And investing is no exception. If a market downswing hurt more than it did five, 10, or 15 years ago, you should revisit your portfolio allocation.</p> <p>There is a plethora of investment options, including bonds, annuities, and mutual funds. If you feel that you need to dial down your exposure to stocks, you can allocate those funds to financial vehicles better suited to your updated view on life and investing. (See also: <a href="http://www.wisebread.com/the-basics-of-asset-allocation?ref=seealso" target="_blank">The Basics of Asset Allocation</a>)</p> <h2>5. Trading triggers fees (most of the time)</h2> <p>A 2018 survey from TD Ameritrade found that more than 75 percent of Americans don't know how much they're paying in 401(k) fees. Even worse, 37 percent of those respondents mistakenly believe that they don't pay any 401(k) fees at all. The reality is that all 401(k) plan holders pay some type of fee.</p> <p>And trading can trigger many of these fees. For example, a fund may have a redemption fee that requires you to hold on to shares of that fund for a minimum period of time or be hit with a fee ranging from 0.01 to 2 percent of the transaction value. Firing away trades without awareness of applicable fees can backfire by setting back your 401(k) balance even further. (See also: <a href="http://www.wisebread.com/watch-out-for-these-5-sneaky-401k-fees?ref=seealso" target="_blank">Watch Out for These 5 Sneaky 401K Fees</a>)</p> <h2>6. Sell based on an objective reason</h2> <p>So far, we have discussed reasons why you should hold on to your stocks or even buy more. But there will be times that you will have a valid reason to sell your equities during a market downturn. Here are a few examples:</p> <ul> <li> <p>Tax loss harvesting: In a year that you're expecting a large tax liability, you could take a hit on realized losses on your investments and offset taxes on both gains and income.</p> </li> <li> <p>Portfolio rebalancing: Balances on specific asset classes fluctuate over time as prices go up and own. So, it may be necessary to do a couple of trades to readjust your portfolio back to its original asset allocation.</p> </li> <li> <p>Dramatic change in company policy: Let's imagine that you bought a stock purely because its board of directors had provided a dividend every quarter for the last 10 years. If the company's board were to suddenly do away with the dividend, would you still want to own it?</p> </li> </ul> <p>Just because the stock market goes up and down doesn't mean that you need to make a move. Stick to your original financial strategy and remember that stocks do outperform most types of investments in the long run. This may mean tuning out from the financial news for a while so it doesn't play into your fears. In the long term, you should do just fine. (See also: <a href="http://www.wisebread.com/want-your-investments-to-do-better-stop-watching-the-news?ref=seealso" target="_blank">Want Your Investments to Do Better? Stop Watching the News</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-investment-truths-to-remember-when-the-stock-market-is-down&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%2520Investment%2520Truths%2520to%2520Remember%2520When%2520the%2520Stock%2520Market%2520Is%2520Down.jpg&amp;description=6%20Investment%20Truths%20to%20Remember%20When%20the%20Stock%20Market%20Is%20Down"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Investment%20Truths%20to%20Remember%20When%20the%20Stock%20Market%20Is%20Down.jpg" alt="6 Investment Truths to Remember When the Stock Market Is Down" width="250" height="374" /></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/6-investment-truths-to-remember-when-the-stock-market-is-down">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/why-the-dow-will-hit-a-million-eventually">Why the Dow Will Hit a Million, Eventually</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/why-does-the-stock-market-keep-going-up">Why Does the Stock Market Keep Going Up?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-too-much-investment-diversity-can-cost-you">How Too Much Investment Diversity Can Cost You</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-investment-moves-that-prove-youre-finally-a-grown-up">5 Investment Moves That Prove You&#039;re Finally a Grown-Up</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-surprising-ways-confidence-can-hurt-your-investments">8 Surprising Ways Confidence Can Hurt Your Investments</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment buy and hold buy low djia dow jones industrial average fees market downturn panic risk worry Tue, 20 Mar 2018 10:00:05 +0000 Damian Davila 2116909 at http://www.wisebread.com Best Money Tips: Essential Tips to Manage Your 401(k) http://www.wisebread.com/best-money-tips-essential-tips-to-manage-your-401k <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-essential-tips-to-manage-your-401k" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/401k_piggy_bank_645234372.jpg" alt="Finding ways to manage a 401(k)" title="" class="imagecache imagecache-250w" width="250" height="140" /></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 articles on tips for managing your 401(k), steps you can take to get your tax refund ASAP, and how to hustle as a new parent.</p> <h2>Top 5 Articles</h2> <p><a href="https://www.moneyunder30.com/essential-tips-to-manage-your-401k">6 Essential Tips to Manage Your 401(k)</a> &mdash; Increase your contribution by 1-5 percent, then set it up to increase by 1 percent annually. You'll hardly notice the difference in your paycheck, but it'll have a big impact on your portfolio down the road. [Money Under 30]</p> <p><a href="https://wallethacks.com/wheres-my-refund-fast/">Where&rsquo;s My Refund? How to Get Your Tax Refund As Quickly As Possible</a> &mdash; When you get your tax refund depends on when you filed, how you filed, and how you asked for your refund. [Wallet Hacks]</p> <p><a href="http://www.moneyaftergraduation.com/2018/03/07/hustle-new-parent/">How to Hustle as a New Parent</a> &mdash;These tips will help you manage that difficult work-life balance with a new baby in tow. [Money After Graduation]</p> <p><a href="https://www.popsugar.com/smart-living/Unclogging-Toilet-Bombs-32903823">Unclog Your Commode With Eco-Friendly Toilet Bombs</a> &mdash; These eco-friendly toilet bombs use the degreasing power of dish soap to bust through tough clogs and clean your commode. [PopSugar Smart Living]</p> <p><a href="https://thetinylife.com/tips-for-getting-started-keeping-chickens/">Getting Started With Chickens</a> &mdash; There are many benefits to keeping chickens beyond the eggs they provide. Learn what it takes to care for these productive birds! [The Tiny Life]</p> <h2>Other Essential Reading</h2> <p><a href="https://bemorewithless.com/air/">How to Land Your Plane: 8 ways to help you feel more grounded</a> &mdash; If your schedule and routines haven been thrown off, don't try to jump back in and expect things to go back to normal right away. Dip into your daily routines, giving yourself time to adjust. [Be More With Less]</p> <p><a href="https://www.theclassysimplelife.com/is-minimalism-right-for-you/">Is Minimalism Right For You?</a> &mdash; The minimalist lifestyle can be hard to maintain. Ask yourself these questions to figure out if minimalism is right for you. [The Classy Life]</p> <p><a href="http://www.pocketyourdollars.com/2018/03/ultimate-list-ways-moms-can-make-money-home/">The Ultimate List of Ways Moms Can Make Money From Home</a> &mdash; The only thing you need to start working from home is the willingness to serve and a product or service that people need. [Pocket Your Dollars]</p> <p><a href="https://thecollegeinvestor.com/21541/different-ways-to-get-student-loan-forgiveness/">80 Different Ways To Get Student Loan Forgiveness</a> &mdash; Need help with your student loan debt? Consider applying for one of these student loan forgiveness programs! [The College Investor]</p> <p><a href="https://www.csmonitor.com/Science/2018/0301/How-to-make-science-experiments-as-common-at-home-as-bedtime-stories">How to make science experiments as common at home as bedtime stories</a> &mdash; A recent study looks into the ways families with preschool-age children incorporate science learning into their lives, and what barriers keep them from doing so more. [The Christian Science Monitor]</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-essential-tips-to-manage-your-401k">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/8-things-millennials-can-do-right-now-for-an-early-retirement">8 Things Millennials Can Do Right Now for an Early Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-startling-facts-that-will-make-you-want-to-invest">8 Startling Facts That Will Make You Want to Invest</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-alternatives-to-a-401k-plan">5 Alternatives to a 401(k) Plan</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/bookmark-this-a-step-by-step-guide-to-choosing-401k-investments">Bookmark This: A Step-by-Step Guide to Choosing 401(k) Investments</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/what-you-need-to-know-about-the-easiest-way-to-save-for-retirement">What You Need to Know About the Easiest Way to Save for Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement 401(k) best money tips Wed, 14 Mar 2018 09:31:18 +0000 Amy Lu 2118000 at http://www.wisebread.com 8 Startling Facts That Will Make You Want to Invest http://www.wisebread.com/8-startling-facts-that-will-make-you-want-to-invest <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-startling-facts-that-will-make-you-want-to-invest" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/retirement_savings_golden_nest_egg.jpg" alt="Retirement savings golden nest egg" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Sometimes you need to be startled into action when it comes to investing. It's easy to come up with excuses not to begin placing money in the markets and saving for retirement. Armed with the right information, however, most people would likely choose to invest rather than stay on the sidelines.</p> <p>Perhaps it's time to digest these eye-opening facts and realize that waiting to invest could be a big mistake.</p> <h2>1. The average retirement savings is measly</h2> <p>According to a 2016 survey from the Transamerica Center for Retirement Studies, baby boomers have an average retirement savings of $147,000. Those from Generation X have an average $69,000, while millennials have $31,000 saved. Those figures have probably risen slightly in the last two years, but are still well shy of the totals necessary for a comfortable retirement.</p> <p>Older people approaching retirement age may have held off investing in their earlier years and are now playing catch up. Younger people have more time to invest and get to where they need to be &mdash; but the longer they wait, the harder it gets. (See also: <a href="http://www.wisebread.com/7-retirement-planning-steps-late-starters-must-make?ref=seealso" target="_blank">7 Retirement Planning Steps Late Starters Must Make</a>)</p> <h2>2. You may be retired longer than you worked</h2> <p>Imagine starting work at 21 and retiring at 60. That's 39 years in the workforce. If you live to 100, that's an additional 40 years &mdash; longer than the time you spent working! People are living longer these days, so it's not uncommon to see retirees still kicking it well into their 90s and beyond. In some cases, retirements are stretching past 40 years. Are you doing all you can to allow your money to last that long? Smart investing may be the only way to accumulate enough cash to support a retirement of that length. (See also: <a href="http://www.wisebread.com/5-ways-longevity-is-changing-retirement-planning-and-what-to-do-about-it?ref=seealso" target="_blank">5 Ways Longevity Is Changing Retirement Planning (And What to Do About It)</a>)</p> <h2>3. Very few people get a pension these days</h2> <p>Defined benefit plans, in which a company guarantees workers a specific amount of money each year in their retirement, have been going away fast. Today, only 13 percent of nonunion private sector workers have access to a defined benefit plan, according to the Bureau of Labor Statistics.</p> <p>Instead, most companies now only offer defined contribution plans, such as a 401(k). With these plans, workers must invest their own money, and companies may offer to match a certain percentage of contributions (some don't). If you're in the workforce, it's likely incumbent upon you to take charge of your own retirement savings. (See also: <a href="http://www.wisebread.com/if-youre-lucky-enough-to-receive-a-pension-here-are-6-things-you-need-to-do?ref=seealso" target="_blank">If You're Lucky Enough to Receive a Pension, Here Are 6 Things You Need to Do</a>)</p> <h2>4. Half of workers say they'll probably work during retirement</h2> <p>Isn't the entire idea of retirement to stop working? For many people, ceasing to work entirely just isn't in the cards. The Transamerica survey revealed that about half of all workers &mdash; including baby boomers, Gen Xers, and millennials &mdash; expect to work at least part-time during retirement. Working is fine if you want to, but if you dread the idea of punching a clock in your old age, invest now.</p> <h2>5. About 20 percent of seniors rely on Social Security for nearly everything</h2> <p>Social Security is certainly better than nothing if you're retired, but it's not a lot of money. The maximum Social Security benefit for 2018 is $2,788 per month, or about $33,500 a year, if you retire at age 66. You could get up to $3,698 monthly if you are willing to wait until age 70 begin accepting payments.</p> <p>You won't starve, but you're not going to be cruising the Mediterranean, either. And yet, roughly one in five Americans over 65 rely on Social Security for 90 percent or more of their income, according to a 2015 study from AARP. There are some states where this figure rises to more than one in three older residents. This is a startling figure when you consider that Social Security is currently running a deficit. Invest now, so that Social Security can be like icing on your retirement cake. (See also: <a href="http://www.wisebread.com/5-questions-to-ask-before-you-start-claiming-your-social-security-benefits?ref=seealso" target="_blank">5 Questions to Ask Before You Start Claiming Your Social Security Benefits</a>)</p> <h2>6. The market rarely has bad years</h2> <p>Everyone remembers when the market crashed about a decade ago during the financial crisis. And there have been some high-profile bad years in the past. But consider this: Since the end of World War II, the S&amp;P 500 has <a href="http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html" target="_blank">recorded a negative annual return</a> just 15 times. That's 15 bad years out of 72. The New York Yankees have won 17 World Series titles during the same period! Only once since World War II &mdash; from 2000 to 2002 &mdash; has the market had three bad years in a row, and there's only one other instance of back-to-back negative annual returns. So even if you had no idea what year it was and still chose not to invest, you'd likely be missing out on positive returns. (See also: <a href="http://www.wisebread.com/how-the-risk-averse-can-get-into-the-stock-market?Ref=seealso" target="_blank">How the Risk Averse Can Get Into the Stock Market</a>)</p> <h2>7. Almost as many people own dogs as stocks</h2> <p>About 54 percent of Americans own stocks, according to research from Gallup. Meanwhile, the American Pet Products Association reports that 48 percent of Americans own dogs. Dogs are nice. Dogs can be enjoyable. Dogs are good to have in retirement as companions, but they won't appreciate in value or help pay the bills as you get older.</p> <p>Invest now, and you can have a comfortable retirement, complete with as many canine friends as you want.</p> <h2>8. If you invested $100 in Amazon 20 years ago, you'd have $50,000</h2> <p>When Amazon went public in 1997, its shares were trading at about $18. As of this writing, the company is now trading at more than $1,300 per share. A simple $100 investment 20 years ago would be worth tens of thousands today. Of course, Amazon's stock returns aren't typical. But it goes to show how even a modest investment over time can prove to be enormously lucrative.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F8-startling-facts-that-will-make-you-want-to-invest&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F8%2520Startling%2520Facts%2520That%2520Will%2520Make%2520You%2520Want%2520to%2520Invest.jpg&amp;description=8%20Startling%20Facts%20That%20Will%20Make%20You%20Want%20to%20Invest"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/8%20Startling%20Facts%20That%20Will%20Make%20You%20Want%20to%20Invest.jpg" alt="8 Startling Facts That Will Make You Want to Invest" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/8-startling-facts-that-will-make-you-want-to-invest">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/how-to-make-sure-you-dont-run-out-of-money-in-retirement">How to Make Sure You Don&#039;t Run Out of Money in Retirement</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-reasons-youre-never-too-old-to-buy-stocks">7 Reasons You&#039;re Never Too Old to Buy 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/8-signs-its-time-to-retire">8 Signs It&#039;s Time to Retire</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-easiest-ways-to-catch-up-on-retirement-savings-later-in-life">7 Easiest Ways to Catch Up on Retirement Savings Later in Life</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/4-foolproof-ways-to-protect-your-money-from-inflation">4 Foolproof Ways to Protect Your Money From Inflation</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement 401(k) fun facts late retirement pensions returns s&p 500 social security startling facts stocks working Wed, 14 Mar 2018 09:01:08 +0000 Tim Lemke 2106620 at http://www.wisebread.com Start an Investment Deathmatch to Find the Best Investments http://www.wisebread.com/start-an-investment-deathmatch-to-find-the-best-investments <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/start-an-investment-deathmatch-to-find-the-best-investments" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/republicans_and_democrats_in_the_campaign_symbolized_with_boxing.jpg" alt="Republicans and Democrats in the campaign symbolized with Boxing" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You can learn a lot about investing by setting up what I call an &quot;investment deathmatch&quot; in your portfolio. In such a setup, your hand-picked investments compete with each other to produce the best return and rack up the biggest balance.</p> <p>An investment deathmatch starts off by investing equal amounts of money in several investment funds at the same time. This makes it easy to monitor how your investments are performing relative to each other simply by glancing at the fund balances.</p> <p>Some benefits of this &quot;investment deathmatch&quot; approach for your portfolio are:</p> <ul> <li> <p>You get the experience of picking out multiple investments.</p> </li> <li> <p>You learn from seeing how different investments perform over time relative to each other.</p> </li> <li> <p>Your portfolio risk is reduced due to diversification.</p> </li> <li> <p>Based on your investment performance results, you can invest more money in your best performing funds.</p> </li> </ul> <p>Here's how to set up your own investment deathmatch.</p> <h2>1. Select categories of funds</h2> <p>While you could pick funds from the same investment category to compete in your deathmatch, there is more to be learned by selecting funds from a variety of categories. Plus, you will build a more diversified portfolio if you choose a variety of funds, reducing your risk in case one investment sector falters.</p> <p>Here are some ideas for fund categories to choose from:</p> <ul> <li> <p>S&amp;P 500 index fund: A good &quot;pace car&quot; to see how your other investments perform relative to large-cap equities in the stock market.</p> </li> <li> <p>Growth fund: Will a growth fund provide better returns than the overall market?</p> </li> <li> <p>Mid-cap fund: Mid-sized businesses have established products and customer bases and lots of room to grow.</p> </li> <li> <p>Just-for-fun: Pick an international fund, real estate investment trust (REIT), gold fund, or whatever investment you think is interesting and could perform well.</p> </li> </ul> <h2>2. Pick your funds</h2> <p>Now that you have outlined your investment categories, it's time to do your homework and pick your favorite fund in each category. Some of the key criteria to consider when selecting funds for your investment deathmatch are:</p> <ul> <li> <p>Investment objective: Do you want an aggressive growth fund that takes higher risks to seek higher returns, or would you rather have a more conservative fund that will be more likely to protect your investment?</p> </li> <li> <p>Active vs. passive management: Do you want a fund with a fund manager making trades to try to maximize returns, or a passive fund that simply tracks a segment of the market?</p> </li> <li> <p>Fees (expense ratio): Funds with lower fees are best for maximizing the growth of your investment over time, but some investment types are more complex and tend to have higher fees. Actively managed funds have higher fees than passive funds and index funds.</p> </li> <li> <p>Performance record (return): While past performance does not predict future results, most investors tend to select funds with returns that have performed well compared to similar funds over the past one to five years.</p> </li> <li> <p>Management team tenure: Some investors prefer funds that have had a consistent management team for a number of years.</p> </li> </ul> <p>(See also: <a href="http://www.wisebread.com/how-to-invest-in-mutual-funds?ref=seealso" target="_blank">How to Invest in Mutual Funds</a>)</p> <h2>3. Invest exactly equal amounts in each fund</h2> <p>With your investment funds picked out, the next step is to invest exactly equal amounts in each one. For example, for a $2,000 investment with four funds in your deathmatch, put exactly $500 in each fund to start off the competition.</p> <p>The reason for putting the exact same amount in several investments on the same day is to make it easy to compare the performance of your funds simply by checking the fund balances at any time. You don't need to keep track of anything or calculate rate of return to evaluate their performance. Whichever fund has the biggest balance is winning.</p> <p>Of course, you will need some money to fund your investments. If you already have cash in hand (in after-tax dollars), it might be easier to invest the funds in a Roth IRA rather than a traditional IRA. Another source of funding to start an investment deathmatch is to execute an exchange to sell funds you already own and move the proceeds into the funds for your deathmatch. This can be done easily in a traditional IRA, Roth IRA, or 401(k) plan.</p> <h2>4. Watch and learn as funds compete to make you money</h2> <p>Now for the fun part &mdash; watching your fund choices fight it out to see which will perform the best. The investment deathmatch format makes it effortless to see which investment are performing well simply by checking in on the fund balances. There is no substitute for the experience you get picking out funds and investing your own money to learn what works and what doesn't.</p> <h2>5. Start new investment deathmatches as a smarter investor</h2> <p>Over time, some of your investments will perform better than others. You might decide to leave the best performing funds in place and start a new deathmatch using funds from investments that are not performing as well.</p> <p>You can pick a different amount to invest in each deathmatch you start so you can better track which funds are directly competing with each other. For example, if you have a deathmatch running with $500 investments, you could start another one with $1,000 investments so you can tell which investments are in which deathmatch.</p> <p>The funds in your investment deathmatch are competing to win the title of best investment, but the real winner is you. You get an easy way to learn about investing all while watching your portfolio grow.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fstart-an-investment-deathmatch-to-find-the-best-investments&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FStart%2520an%2520Investment%2520Deathmatch%2520to%2520Find%2520the%2520Best%2520Investments.jpg&amp;description=Start%20an%20Investment%20Deathmatch%20to%20Find%20the%20Best%20Investments"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Start%20an%20Investment%20Deathmatch%20to%20Find%20the%20Best%20Investments.jpg" alt="Start an Investment Deathmatch to Find the Best Investments" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dr-penny-pincher">Dr Penny Pincher</a> of <a href="http://www.wisebread.com/start-an-investment-deathmatch-to-find-the-best-investments">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-3-rules-every-mediocre-investor-must-know">The 3 Rules Every Mediocre Investor Must Know</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/think-outside-the-index-when-you-rebalance-your-investment-portfolio">Think Outside the Index When You Rebalance Your Investment 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/8-types-of-investors-which-one-are-you">8 Types of Investors — Which One Are You?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-warren-buffett-says-you-should-invest-in-index-funds">Why Warren Buffett Says You Should Invest in Index 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/dont-be-fooled-by-an-investments-rate-of-return">Don&#039;t Be Fooled by an Investment&#039;s Rate of Return</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment competition deathmatch diversification mutual funds performance portfolio returns risk s&p 500 Tue, 13 Mar 2018 09:30:19 +0000 Dr Penny Pincher 2115990 at http://www.wisebread.com 7 Reasons You're Never Too Old to Buy Stocks http://www.wisebread.com/7-reasons-youre-never-too-old-to-buy-stocks <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-reasons-youre-never-too-old-to-buy-stocks" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/grandfather_and_grandson_play_lying_on_grass.jpg" alt="Grandfather and grandson play lying on grass" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>One common rule of thumb for investors is to move away from stocks into more conservative investments as you get older. The thinking behind this is that stocks always carry the risk of losing value, and that's not something you want to see with your retirement fund.</p> <p>But completely abandoning stocks may not be the right strategy, either. Holding some stocks in your portfolio can be a hedge against inflation, and can help ensure that your retirement money lasts as long as you do.</p> <p>Here's a look at some reasons why, even for older investors, stocks are always a good buy.</p> <h2>1. You may live longer than you think</h2> <p>Many people assume that once you approach retirement age, all of your efforts should be focused on protecting your assets rather than growing them. But the reality is that many retirees will need their money to last 30 years or more, and the only way to make money last that long is to continue to accumulate it.</p> <p>Having some money in stocks will, in most years, allow you to replenish money that you spend from your portfolio. Consider this: If you have a nest egg of $1 million and spend $50,000 annually, your savings will be gone in about 20 years. But if you are able to add 4 percent to your portfolio each year from stocks, your savings could last another decade or more. (See also: <a href="http://www.wisebread.com/5-ways-longevity-is-changing-retirement-planning-and-what-to-do-about-it?ref=seealso" target="_blank">5 Ways Longevity Is Changing Retirement Planning (And What to Do About It)</a>)</p> <h2>2. Many stocks can be safe investments</h2> <p>We tend think of stocks as risky and volatile investments, but that's not always the case. Many stocks are actually very common and useful investments for people looking to bring stability to their portfolio.</p> <p>Dividend stocks are a common component of retiree accounts, because they generate income for the investor and generally don't rise and fall dramatically in price. There are also some industries, such as consumer goods, that have offered steady returns year in and year out. Some stocks, such as Wal-Mart, are good bets even during bad economic times. You don't have to lay off stocks entirely as you get close to retirement age. It's just a matter of finding stable, income-producing stocks that can serve you well as you get older.</p> <h2>3. Markets rebound fairly quickly</h2> <p>No one likes to see the stock market take a big dive, but the good news is that it always goes back up. There are only a handful of times in history when the stock market has had consecutive down years. Moreover, years with negative returns are often followed up with positive returns of greater magnitude. History shows that if you lose money in the markets one year, you'll likely make that money and more back within a few years. In other words, even if you are well into your senior years, you're unlikely to see your entire savings gone in a single swoop. (See also: <a href="http://www.wisebread.com/6-confidence-inspiring-facts-about-the-stock-market?ref=seealso" target="_blank">6 Confidence-Inspiring Facts About the Stock Market</a>)</p> <h2>4. Stocks don't need to comprise your whole portfolio</h2> <p>Buying stocks when you are at or near retirement age is only a bad idea if you're not also invested in more stable things like bonds and cash. Stocks don't have to make up 100 percent of your retirement fund. They don't even have to make up 50 or 25 percent. But having stocks as a relatively small percentage of your portfolio can help make your money last longer without adding much risk.</p> <p>For example, let's say you have $1 million in your retirement fund. And let's say 10 percent of that ($100,000) is in stocks, with the rest in bonds and cash. If the stock market were to take a dive of 30 percent in one year, you might lose $30,000 from the stock portion of the portfolio. That's $30,000 out of a total of $1 million saved, or just 3 percent of your total savings. You'd still have $970,000 left. Given that the market historically goes up more than it goes down, this is a reasonable risk to take. (See also: <a href="http://www.wisebread.com/how-the-risk-averse-can-get-into-the-stock-market?ref=seealso" target="_blank">How the Risk Averse Can Get Into the Stock Market</a>)</p> <h2>5. Returns from bonds and cash are lousy these days</h2> <p>For many years, it was common for Americans to get good returns on government and municipal bonds, as well as normal savings accounts and certificates of deposit. Thus, retirement accounts were constantly being replenished with new money.</p> <p>Nowadays, interest rates are still at some of their lowest rates in history, so it's easy to see how your personal spending rate will outpace the returns from your retirement funds. In fact, there is some risk that your returns may not even outpace the rate of inflation. Only with stocks will you be able to see the types of gains once seen from bonds and cash in the past, and you'll never be at risk of seeing inflation eat away at your nest egg.</p> <h2>6. Transgenerational wealth is a powerful thing</h2> <p>Have you ever wondered how massively wealthy people got their money? It's often because they inherited it. In fact, many younger Americans say they are expecting a sizable inheritance. According to a recent survey from Natixis, 60 percent of millennials believe they will inherit some money from their parents.</p> <p>If you want to ensure financial security for your children and even generations beyond, your own personal retirement time horizon is irrelevant. Only through stocks can you continue to accumulate returns that generate the kind of wealth that will transform the lives of your heirs.</p> <h2>7. Stocks are just more fun</h2> <p>Cash is safe. Bonds are safe. But they are boring as heck. And it's downright wrong to assume that older people can't have some excitement in their lives.</p> <p>Placing money in the stock market and watching it grow is fun. Being a shareholder of a company is fun. And if you are retired, you actually now have time to pay attention to your investments. Of course, you never want to let a desire for fun force you into a silly investment decision. Stocks should comprise a relatively small section of retirement funds for older people. But I'm not about to tell our seniors they can't let loose a little bit. (See also: <a href="http://www.wisebread.com/7-reasons-to-invest-in-stocks-past-age-50?ref=seealso" target="_blank">7 Reasons to Invest in Stocks Past Age 50</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-talk-about-a-previous-job-in-an-interview&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F7%2520Reasons%2520Youre%2520Never%2520Too%2520Old%2520to%2520Buy%2520Stocks.jpg&amp;description=7%20Reasons%20Youre%20Never%20Too%20Old%20to%20Buy%20Stocks"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/7%20Reasons%20Youre%20Never%20Too%20Old%20to%20Buy%20Stocks.jpg" alt="7 Reasons You're Never Too Old to Buy Stocks" width="250" height="374" /></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-reasons-youre-never-too-old-to-buy-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-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/5-ways-longevity-is-changing-retirement-planning-and-what-to-do-about-it">5 Ways Longevity Is Changing Retirement Planning (And What to Do About It)</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-3-rules-every-mediocre-investor-must-know">The 3 Rules Every Mediocre Investor Must Know</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-types-of-investors-which-one-are-you">8 Types of Investors — Which One Are You?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-reasons-to-invest-in-stocks-past-age-50">7 Reasons to Invest in Stocks Past Age 50</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/4-simple-ways-to-conquer-your-fear-of-investing">4 Simple Ways to Conquer Your Fear of Investing</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement bonds inflation longevity market crash old age returns risk stock market stocks Mon, 12 Mar 2018 09:00:06 +0000 Tim Lemke 2114064 at http://www.wisebread.com 6 Confidence-Inspiring Facts About the Stock Market http://www.wisebread.com/6-confidence-inspiring-facts-about-the-stock-market <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-confidence-inspiring-facts-about-the-stock-market" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/growing_savings_arrow_graph_concept.jpg" alt="Growing savings arrow graph concept" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It's normal and understandable to feel skittish about investing. After all, investing in stocks comes with risk, and no one likes to lose money. Even when people tell you that investing is the path to wealth, it's easy to remember those years when the stock market crashed. The roller coaster ride during the first weeks of February raised some of those fears again.</p> <p>Your fears should be placated, however, with a simple examination of year-by-year market returns. I find it fascinating to pore over this <a href="http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html" target="_blank">chart of annual returns of the S&amp;P 500</a> (including dividends) dating back to 1928, right before the Great Depression. Reviewing those returns will give you a good sense of market performance over the last nine decades. If you look at those returns and crunch a few numbers, you will come across some surprising facts, and your fear of investing may go away completely. (See also: <a href="http://www.wisebread.com/4-simple-ways-to-conquer-your-fear-of-investing?ref=seealso" target="_blank">4 Simple Ways to Conquer Your Fear of Investing</a>)</p> <p>Here are a few nerve-calming take-aways from nearly 90 years of S&amp;P 500 performance.</p> <h2>1. Its winning streaks are longer than its losing streaks</h2> <p>We just had the ninth consecutive year of positive returns for the S&amp;P 500. That may seem unusual, but it's really not. We had a nine-year winning streak from 1991 to 1999, an eight-year streak in the 1980s, and a six-year streak after World War II. Meanwhile, the longest streak of bad years is just four, and that happened during the Great Depression. There are only two other instances of a three-year losing streak, and just one since 1941.</p> <h2>2. Its highs are more extreme than its lows</h2> <p>We all remember those instances when the stock market has taken a painful dive. In 2008, the S&amp;P 500 dropped nearly 37 percent. It fell a whopping 44 percent back in 1931. Ouch. But those bad years don't look so bad when you consider that the stock market has shown that it can go up by a higher percentage. It went up 53 percent in 1954, and 43 percent just four years after that. We saw a 37 percent return in 1975 and a 32 percent jump in 2013. For every bad year of the S&amp;P 500, you can find a year where things swung even further in a positive direction.</p> <h2>3. Its bad years are almost always followed by good ones</h2> <p>Since 1928, there have been 24 years where the S&amp;P 500 has reported a negative return. In 16 of those cases, the index rebounded with positive returns the following year. In other words, two thirds of the time, you can feel confident that the stock market will rebound after a bad year. In fact, the market will often follow a bad year with an increase that's higher than the previous years decline.</p> <h2>4. Double-digit returns are more common than single-digit ones</h2> <p>What's the difference between a good return and a great one? For most people, anything above 10 percent in a year would be wonderful. And since 1928, that's happened a whopping 51 times. The S&amp;P 500 has gone down just 24 times in a year during the same time period, and there are just 15 cases where the market has gone up less than 10 percent. In other words, the stock market has shown a tendency to not only to go up, but go up big.</p> <h2>5. Nearly every 10-year return is positive</h2> <p>There's a reason why people suggest you examine the 10-year return on any investment. That's because it usually shows a positive overall return, even if there are down years during that period. Take all of the 10-year stretches of time since 1928. Now, try to find one in which the total return on the S&amp;P 500 is negative. You'll have to work hard. An analysis of any 10-year span since 1928 shows a positive return on 88 percent of those decades. This statistic shows the value of patience in investing.</p> <h2>6. It's rarely taken more than five years to fully recover</h2> <p>There is no debating that big stock market drops can hurt, and it's usually hard to recover all of your losses in a single year. If you invest $1,000 and lose 20 percent, you're down to $800, and will need a 25 percent gain ($200) just to get back to where you were. That's tough. But the stock market historically doesn't make you wait too long before you're back in positive territory.</p> <p>If you are among those that lost a lot of money when the market crashed in 2008, there's a good chance you got all your money back and more by 2012. If you experienced losses during the downturn from 2000 to 2002, you probably were back in action by 2006. And that's if you stopped contributing. If you continued to invest when the market was down, you probably got back in positive territory even sooner.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-confidence-inspiring-facts-about-the-stock-market&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%2520Confidence-Inspiring%2520Facts%2520About%2520the%2520Stock%2520Market.jpg&amp;description=6%20Confidence-Inspiring%20Facts%20About%20the%20Stock%20Market"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Confidence-Inspiring%20Facts%20About%20the%20Stock%20Market.jpg" alt="6 Confidence-Inspiring Facts About the Stock Market" width="250" height="374" /></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/6-confidence-inspiring-facts-about-the-stock-market">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/heres-what-i-learned-about-money-after-using-acorns">Here&#039;s What I Learned About Money After Using Acorns</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-things-millennials-can-do-right-now-for-an-early-retirement">8 Things Millennials Can Do Right Now for an Early Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-are-people-retiring-in-their-30s">How Are People Retiring in Their 30s?!</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-startling-facts-that-will-make-you-want-to-invest">8 Startling Facts That Will Make You Want to Invest</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/start-an-investment-deathmatch-to-find-the-best-investments">Start an Investment Deathmatch to Find the Best Investments</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment decades facts historical data positive returns reassurance s&p 500 saving money Tue, 27 Feb 2018 10:00:06 +0000 Tim Lemke 2106619 at http://www.wisebread.com Best Money Tips: 5 Alternatives to Bitcoin http://www.wisebread.com/best-money-tips-5-alternatives-to-bitcoin <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-5-alternatives-to-bitcoin" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/bitcoin_cash_money_877508718.jpg" alt="Finding alternatives to Bitcoin" title="" class="imagecache imagecache-250w" width="250" height="140" /></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 articles on alternatives to Bitcoin you should know about, how to get the best deal on a mortgage, and storage ideas for bathrooms.</p> <h2>Top 5 Articles</h2> <p><a href="https://www.moneyunder30.com/alternatives-to-bitcoin">5 Alternatives To Bitcoin You Should Know About</a> &mdash; Bitcoin is not the only cryptocurrency worth investing in. Smaller-scale investors may want to consider these alternatives, too. [PT Money]</p> <p><a href="https://www.moneytalksnews.com/8-golden-rules-mortgage-shopping/#at_pco=cfd-1.0">How to Buy a House: Getting the Best Deal on a Mortgage</a> &mdash; Are you thinking of buying a house or refinancing your existing mortgage? These tips can save you thousands of dollars. [Money Talks News]</p> <p><a href="https://unclutterer.com/2018/02/21/storage-ideas-bathrooms/">Storage ideas for bathrooms</a> &mdash; When you have a tiny bathroom, you need to be a little creative to maximize your storage space. [Unclutterer]</p> <p><a href="https://www.iwillteachyoutoberich.com/blog/how-to-give-advice-that-people-actually-take/">How to give advice that people actually take</a> &mdash; Put yourself in the other person's shoes when you give advice. Your advice will resonate more if they know that you can empathize with their situation. [I Will Teach You To Be Rich]</p> <p><a href="https://www.popsugar.com/smart-living/Cheap-Spring-Break-Destinations-44573676">10 Spring Break Destinations That Won't Break the Bank</a> &mdash; These wallet-friendly Spring break destinations are sure to satisfy your post-Winter wanderlust. [PopSugar Smart Living]</p> <h2>Other Essential Reading</h2> <p><a href="https://www.kiplinger.com/slideshow/taxes/T055-S003-suprising-things-that-are-taxable/index.html">10 Surprising Things That Are Taxable</a> &mdash; The IRS doesn't stop at wages and investment income when it taxes you. Scholarships, buried treasure, and even Olympic victories are taxable. [Kiplinger]</p> <p><a href="https://wallethacks.com/budgeting-strategies/">4 Different Budgeting Strategies to Try This Year</a> &mdash; No single budget strategy will work for everyone. To find the right one for you, you'll need to consider your goals, your stage in life, and whether or not you need to change your habits. [Wallet Hacks]</p> <p><a href="https://wealthyaccountant.com/2018/02/19/saving-the-world-and-yourself-one-frugal-act-at-a-time/">Saving the World (and Yourself) One Frugal Act at a Time</a> &mdash; Making just a few small changes in your daily life can have a positive impact on the environment and your wallet. [The Wealthy Accountant]</p> <p><a href="https://www.makingsenseofcents.com/2018/02/dont-compare-beginning-someone-elses-middle.html">Don&rsquo;t Compare Your Beginning to Someone Else&rsquo;s Middle</a> &mdash; Instead of comparing your path to the people around you, it's more important to focus on making your dream a reality. [Making Sense of Cents]</p> <p><a href="https://www.thesimpledollar.com/how-to-get-maximum-value-out-of-a-personal-finance-book/">How to Get Maximum Value out of a Personal Finance Book</a> &mdash; Learn how to choose a personal finance book that speaks to you and how to absorb the information so you can make meaningful changes to your financial life. [The Simple Dollar]</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-5-alternatives-to-bitcoin">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/what-is-cryptocurrency-anyway">What Is Cryptocurrency, Anyway?</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/should-you-treat-your-social-security-benefits-like-a-bond">Should You Treat Your Social Security Benefits Like a Bond?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-make-sure-you-dont-run-out-of-money-in-retirement">How to Make Sure You Don&#039;t Run Out of Money in Retirement</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/did-your-parents-give-you-a-whole-life-insurance-policy-heres-what-to-do-with-it">Did Your Parents Give You a Whole Life Insurance Policy? Here&#039;s What to Do With It.</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/treasury-bills-for-ordinary-folks">Treasury bills for ordinary folks</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment best money tips bitcoin Fri, 23 Feb 2018 09:30:05 +0000 Amy Lu 2108362 at http://www.wisebread.com 6 Questions All Rookie Investors Should Ask http://www.wisebread.com/6-questions-all-rookie-investors-should-ask <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-questions-all-rookie-investors-should-ask" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/young_boy_examines_money_falling_from_sky.jpg" alt="Young Boy Examines Money Falling from Sky" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The first time you got behind the wheel of a car, you were probably a little intimidated. The same can be true if you're just getting started with investing. Here are some questions that may be on your mind, along with answers designed to help you begin your investing journey with the knowledge you need to succeed.</p> <h2>1. Why should I invest?</h2> <p>Especially if you're young, investing might not seem very urgent. Investment goals, such as retirement, may seem distant and vague.</p> <p>The financial services industry has tried everything to get people to recognize the importance of investing for retirement, even using photo-enhancing software to show young people what they may look like when they're 65 or 70. A 2012 Merrill Edge study actually found the tactic somewhat effective in motivating people to save more for their later years.</p> <p>Assuming you don't have access to such technology, maybe the best way to find the motivation to invest is to consider the cost of waiting. Crunching the numbers just may be the wake-up call you need.</p> <h2>2. What's the harm in holding off a little while?</h2> <p>The sooner you start investing, the less you'll have to invest each month in order to meet your goals.</p> <p>Let's say you're 25 years old, plan to retire at age 70, and want to accumulate $1 million by then. Assuming a 7 percent average annual return, you would need to invest about $275 per month. Even waiting just five years will significantly increase that amount. Starting at age 30, you would need to invest about $361 per month in order to accumulate $1 million by age 70.</p> <p>Here's another way to think about it. If you invested $200 per month from age 25 until age 70 and generated an average annual return of 7 percent, you'd end up with about $733,804. Wait until age 30 to start investing $200 per month, and you'll end up with $512,663.</p> <p>That's amazing, isn't it? By investing for just five fewer years, you will invest just $12,000 less than if you had started at age 25. And yet, because of the power of compounding &mdash; more accurately, because of missing out on five years' worth of the power of compounding &mdash; you'll end up with about $221,000 less. That's a huge penalty for waiting. (See also: <a href="http://www.wisebread.com/11-investing-tips-you-wish-you-could-tell-your-younger-self?ref=seealso" target="_blank">11 Investing Tips You Wish You Could Tell Your Younger Self</a>)</p> <h2>3. How much should I invest?</h2> <p>To get a general sense about how much to invest each month, use the <a href="https://www.fidelity.com/calculators-tools/fidelity-retirement-score-tool" target="_blank">Fidelity Retirement Score</a> calculator. Once you run some initial numbers, you'll be able to see how changing some of your variables, such as how much to invest and when to retire, will impact your how much money you end up with.</p> <h2>4. Should I use my company's 401(k) plan or an IRA?</h2> <p>The key to answering this question is whether your employer offers a match on some of the money you would contribute to its 401(k) plan. If so, start there.</p> <p>In a typical arrangement, an employer will match your contributions up to 6 percent of your salary. If yours will contribute a dollar for every dollar you put in, that's a guaranteed 100 percent return on your money. If it will match 50 cents for every dollar you contribute, that's a guaranteed 50 percent return on your money. Don't miss out.</p> <p>If your employer doesn't offer a match, the decision depends on the investment options it offers. There are still some employers whose plans contain a strange mix of mutual funds with high fees (you should not be limited to funds with &quot;expense ratios&quot; higher than 1 percent). If that's the case with your employer's plan, you may be better off using an IRA. However, even with a solid 401(k) plan at your disposal, don't think an IRA isn't for you. Contributing to both plans can give you a further leg up in your retirement savings strategy. (See also: <a href="http://www.wisebread.com/401k-or-ira-you-need-both?ref=seealso" target="_blank">401(k) or IRA? You Need Both</a>)</p> <h2>5. What should I invest in?</h2> <p>It used to be a lot more complicated and intimidating to figure out what investments to make. Today, target-date funds have simplified the process. By choosing a single mutual fund that has the year of your intended retirement date as part of its name, such as the Fidelity Freedom 2040 Fund, you'll gain a portfolio that's diversified across stocks, bonds, and other asset classes in a way that's appropriate for someone your age. As you get older, the fund will automatically adjust its investment mix, becoming more conservative as you near your target retirement date. (See also: <a href="http://www.wisebread.com/what-you-need-to-know-about-the-easiest-way-to-save-for-retirement?ref=seealso" target="_blank">What You Need to Know About the Easiest Way to Save for Retirement</a>)</p> <h2>6. What can I expect from my investments?</h2> <p>In short, you can expect that the ride will not always be smooth. Last year, the S&amp;P 500 generated a nearly 22 percent return, but in 2008 it <em>fell </em>37 percent.</p> <p>Investing always comes with risk, and there's no way to predict how each year will turn out. A solid approach is to build a diversified portfolio, perhaps through a target-date fund, and commit to staying with it in good years and bad.</p> <p>The longer you stay invested, the better your odds of success. As Morningstar documented in its 2017 Fundamentals for Investors report, from 1926 through 2016, 74 percent of one-year returns from the U.S. stock market were positive, 86 percent of five-year returns were positive, and 100 percent of 15-year returns were positive.</p> <p>As with so many things, the best way to learn about investing is to get started. Taking the steps described above should get you moving in the right direction.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-questions-all-rookie-investors-should-ask&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%2520Questions%2520All%2520Rookie%2520Investors%2520Should%2520Ask%2520%25281%2529.jpg&amp;description=6%20Questions%20All%20Rookie%20Investors%20Should%20Ask"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Questions%20All%20Rookie%20Investors%20Should%20Ask%20%281%29.jpg" alt="6 Questions All Rookie Investors Should Ask" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/6-questions-all-rookie-investors-should-ask">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-things-millennials-can-do-right-now-for-an-early-retirement">8 Things Millennials Can Do Right Now for an Early Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-startling-facts-that-will-make-you-want-to-invest">8 Startling Facts That Will Make You Want to Invest</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-critical-401k-questions-you-need-to-ask-your-employer">8 Critical 401(k) Questions You Need to Ask Your Employer</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-basic-questions-about-retirement-saving-everyone-should-ask">11 Basic Questions About Retirement Saving Everyone Should Ask</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/three-of-the-toughest-decisions-youll-face-in-retirement">Three of the Toughest Decisions You&#039;ll Face in Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment 401(k) compound interest IRA new investors questions retirement savings returns rookies Tue, 06 Feb 2018 09:30:08 +0000 Matt Bell 2096590 at http://www.wisebread.com How to Invest in Mutual Funds http://www.wisebread.com/how-to-invest-in-mutual-funds <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-invest-in-mutual-funds" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/tree_growing_on_coins.jpg" alt="Tree growing on coins" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Mutual funds are an easy way to invest in a broad portfolio of stocks, bonds, and other securities. You don&rsquo;t need to spend a lot of time picking individual stocks and making trades. Just invest in a mutual fund, and the mutual fund takes care of managing an investment portfolio for you.</p> <p>There are thousands of mutual funds to choose from that contain different investment portfolios and fund features. Here are the most important types of mutual funds to consider to find the right ones for your portfolio.</p> <h2>Equity funds</h2> <p>Equity funds invest in stocks. You can choose an equity fund that specializes in certain types of stock investments, such as U.S. stock, international stock, growth stock, or value stock. Another variation is the size of companies that are targeted by the fund. Small-cap funds buy stock of smaller companies, mid-cap funds buy stock in midsize companies, and large-cap funds buy stock in large companies. Some equity funds specialize in stocks from specific sectors of the economy such as finance, energy, or health care.</p> <h2>Fixed income funds</h2> <p>Also known as bond funds, fixed income funds invest in debt issued by local and national governments and by large businesses. Bond funds are typically considered a lower risk alternative to stock investments, but offer less growth potential.</p> <h2>Balanced funds</h2> <p>Balanced funds invest in a mix of stocks and bonds. Many investors want to capture the growth potential of stock investments and the lower-risk income from bonds. A balanced fund provides a simple way to cover both stock and bond investments in a single fund.</p> <h2>Index funds</h2> <p>Index funds are designed to track a broader market such as the S&amp;P 500. The main advantage of index funds over equity funds is that they typically have very low fund expenses since index funds require almost no management. (See also: <a href="http://www.wisebread.com/why-warren-buffett-says-you-should-invest-in-index-funds?ref=seealso" target="_blank">Why Warren Buffett Says You Should Invest in Index Funds</a>)</p> <h2>Target-date funds</h2> <p>Target-date funds adjust their asset allocation mix over time, from more aggressive investments to more conservative choices as the target date approaches. These funds are usually named with a date that represents the retirement or target year that the investor expects to begin accessing the funds. For example, &ldquo;Freedom 2035&rdquo; would target the year 2035 to reach its most conservative investment position. (See also: <a href="http://www.wisebread.com/start-planning-now-for-when-your-target-date-fund-ends?ref=seealso" target="_blank">Start Planning Now for When Your Target-Date Fund Ends</a>)</p> <h2>How to select the best mutual funds</h2> <p>Once you have identified the best types of mutual funds for your investment goals, you will need to select the specific mutual funds you want to purchase. Some of the key criteria to consider when evaluating funds are:</p> <ul> <li> <p>Investment objective: Do you want an aggressive growth fund that takes higher risks to seek higher returns, or would you rather have a more conservative fund that will be more likely to protect your investment?</p> </li> <li> <p>Active vs. passive management: Do you want a fund with a fund manager making trades to try to maximize returns, or a passive fund that simply tracks a segment of the market?</p> </li> <li> <p>Fees (expense ratio): Funds with lower fees are best for maximizing the growth of your investment over time, but some investment types are more complex and tend to have higher fees. Actively managed funds have higher fees than passive funds and index funds.</p> </li> <li> <p>Performance record (return): While past performance does not predict future results, most investors tend to select funds with returns that have performed well compared to similar funds over the past one to five years.</p> </li> <li> <p>Management team tenure: Some investors prefer funds that have had a consistent management team for a number of years.</p> </li> </ul> <p>You can do research to find funds that meet your investment objectives using online research tools at your stock broker&rsquo;s website. Most brokers allow you to search for desired types of funds and review key information such as returns and fees. Some of the leading mutual fund brokerages include:</p> <ul> <li> <p>Fidelity</p> </li> </ul> <ul> <li> <p>Vanguard</p> </li> </ul> <ul> <li> <p>Merrill Edge</p> </li> <li> <p>TD Ameritrade</p> </li> <li> <p>E*TRADE</p> </li> <li> <p>Charles Schwab</p> </li> </ul> <p>In case you don&rsquo;t already have a broker, or if you want to check out a wider range of mutual fund offerings, here are some additional online mutual fund research tools to help you find and compare mutual funds:</p> <ul> <li> <p><a href="http://online.wsj.com/public/quotes/mutualfund_screener.html" target="_blank">Wall Street Journal Mutual Fund Screener</a></p> </li> <li> <p><a href="http://www.maxfunds.com/" target="_blank">Maxfunds</a></p> </li> <li> <p><a href="http://www.morningstar.com/funds.html" target="_blank">Morningstar</a></p> </li> <li> <p><a href="http://www.lipperleaders.com/" target="_blank">Lipper</a></p> </li> </ul> <h2>How to buy mutual funds</h2> <p>After you have done your research and have selected a mutual fund that you want to buy, there are two ways you can make the trade and buy into the fund through a brokerage:</p> <ul> <li> <p>Execute an exchange to sell funds or stocks you currently own and use the proceeds to purchase the mutual fund you want to buy.</p> </li> <li> <p>Transfer cash funds to your brokerage to execute a trade to buy the mutual fund you want.</p> </li> </ul> <p>You may be able to achieve tax advantages if you purchase mutual funds as part of an IRA or 401(k) retirement plan. After you buy a mutual fund, you should monitor the performance of the fund, its fees, and whether or not the fund is still a good fit for your investment portfolio on at least an annual basis.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-invest-in-mutual-funds&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Invest%2520in%2520Mutual%2520Funds.jpg&amp;description=How%20to%20Invest%20in%20Mutual%20Funds"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Invest%20in%20Mutual%20Funds.jpg" alt="How to Invest in Mutual Funds" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dr-penny-pincher">Dr Penny Pincher</a> of <a href="http://www.wisebread.com/how-to-invest-in-mutual-funds">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/3-steps-to-getting-started-in-the-stock-market-with-index-funds">3 Steps to Getting Started in the Stock Market With Index Funds</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/start-an-investment-deathmatch-to-find-the-best-investments">Start an Investment Deathmatch to Find the Best Investments</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-essentials-for-building-a-profitable-portfolio">5 Essentials for Building a Profitable 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/4-simple-ways-to-conquer-your-fear-of-investing">4 Simple Ways to Conquer Your Fear of Investing</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-warren-buffett-says-you-should-invest-in-index-funds">Why Warren Buffett Says You Should Invest in Index Funds</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment actively managed equity index funds mutual funds passively managed risk target date funds Fri, 02 Feb 2018 09:00:06 +0000 Dr Penny Pincher 2095997 at http://www.wisebread.com 4 Ways to Keep Envy From Ruining Your Retirement Investments http://www.wisebread.com/4-ways-to-keep-envy-from-ruining-your-retirement-investments <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-ways-to-keep-envy-from-ruining-your-retirement-investments" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/bad_news.jpg" alt="Bad news" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The stock market had a great year in 2017, with the S&amp;P 500 rising more than 19 percent. Did your portfolio do as well? If not, you may feel like you missed out. You may even be tempted to make some changes, going all in on headline-making companies that did well in 2017.</p> <p>But hold on. Just as scrolling through your social media feed can make you feel like you need to up your vacation game, reading about hot investments can tempt you to invest reactively instead of proactively, and that often does more harm than good.</p> <p>What's a person with investment envy to do? Read on.</p> <h2>1. Keep hot investments in perspective</h2> <p>If you pay any attention to investment news, you've seen plenty of headlines about the so-called FANG stocks, an acronym that represents Facebook, Amazon, Netflix, and Google (Alphabet). Other popular consumer-oriented companies include Apple and Microsoft. Each stock had a great 2017.</p> <p>Should those investments be part of <em>your </em>portfolio? Maybe, but the principles of wise investing would suggest buying them only as part of a diversified portfolio and only if you understand that what goes up quickly can also come down quickly.</p> <p>For example, in 2008, when the S&amp;P 500 fell 38 percent, many of these hot stocks also plummeted &mdash; some by more than 50 percent. (See also: <a href="http://www.wisebread.com/9-ways-to-tell-if-a-stock-is-worth-buying?ref=seealso" target="_blank">9 Ways to Tell If a Stock is Worth Buying</a>)</p> <h2>2. Keep a hot market in perspective</h2> <p>At the end of each weekday, there are news reports about how &quot;the market&quot; performed. In reality, such reports are usually about how the S&amp;P 500 or Dow Jones industrial average performed. Both are stock market indexes, but both are designed very differently &mdash; the S&amp;P 500 represents the collective performance of 500 of the largest U.S.-based public companies, and the Dow represents just 30 companies.</p> <p>The only investors for whom it would be fair to benchmark their portfolios against such indexes are those who invest solely in an S&amp;P 500 or Dow index fund.</p> <p>If you have other investments in your portfolio, you need to remember that &quot;the market&quot; is not the same thing as your particular portfolio. It's fine to view the market's performance as a general investing barometer. Just don't be envious if your portfolio doesn't perform as well, or overly confident if it performs better. (See also: <a href="http://www.wisebread.com/want-your-investments-to-do-better-stop-watching-the-news?ref=seealso" target="_blank">Want Your Investments to Do Better? Stop Watching the News</a>)</p> <h2>3. Keep your benchmark in mind</h2> <p>The best point of comparison to use when evaluating your portfolio's performance is a benchmark tailored to your age, goals, and risk tolerance. More specifically, it's the average annual rate of return that's part of your investment plan.</p> <p>If you don't have such a plan, it isn't that difficult to create one. Begin by completing <a href="https://retirementplans.vanguard.com/VGApp/pe/PubQuizActivity?Step=start" target="_blank">Vanguard's investor questionnaire</a>. It'll suggest an optimal asset allocation. From there, you can review the <a href="https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations" target="_blank">historical performance of portfolios</a> with various stock/bond allocations, which can help you choose a reasonable rate of return assumption for your own portfolio.</p> <h2>4. Get the best of both worlds</h2> <p>Once you know your optimal asset allocation, you can use index funds to create a diversified portfolio designed to share in some of the overall market gains, as well as the gains of individual hot investments.</p> <p>In fact, just investing in an S&amp;P 500 index fund enables you to do both. Of course, it gives you exposure to &quot;the market&quot; as defined by that index. But it also gives what may sound like a surprising level of exposure to the fast-growing individual stocks mentioned earlier.</p> <p>You see, the S&amp;P 500 is a &quot;market capitalization-weighted&quot; index, meaning each company that's included is represented based on the value of its outstanding shares. Because Apple, Alphabet, Microsoft, Facebook, and Amazon have done so well in recent years, they make up a disproportionate share of the index. For example, those five stocks account for nearly 13 percent of the Vanguard S&amp;P 500 index fund, VOO.</p> <p>However, even if your optimal asset allocation is 100 percent stocks, you'll probably want to diversify beyond an S&amp;P 500 mutual fund, perhaps including smaller companies through an extended market fund, and foreign companies through an international fund.</p> <p>Benchmarking your portfolio against headlines about this fast-growing sector or that hot investment will just cause you stress and may even hurt your returns. Instead, develop and follow a plan that includes a realistic assumed average annual return based on your circumstances and goals.</p> <p>Using the right benchmark will do wonders for your portfolio and your peace of mind.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F4-ways-to-keep-envy-from-ruining-your-retirement-investments&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F4%2520Ways%2520to%2520Keep%2520Envy%2520From%2520Ruining%2520Your%2520Retirement%2520Investments.jpg&amp;description=How%20to%20Be%20Successful%20as%20a%20First-Time%20Manager"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/4%20Ways%20to%20Keep%20Envy%20From%20Ruining%20Your%20Retirement%20Investments.jpg" alt="4 Ways to Keep Envy From Ruining Your Retirement Investments" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/4-ways-to-keep-envy-from-ruining-your-retirement-investments">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/this-one-mental-bias-is-harming-your-investments">This One Mental Bias Is Harming Your Investments</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/why-does-the-stock-market-keep-going-up">Why Does the Stock Market Keep Going Up?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-the-risk-averse-can-get-into-the-stock-market">How the Risk Averse Can Get Into the Stock Market</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/why-the-dow-will-hit-a-million-eventually">Why the Dow Will Hit a Million, Eventually</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-secret-to-successful-investing-is-trusting-the-process">The Secret to Successful Investing Is Trusting the Process</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment dow jones industrial average envy gains hot stocks losses portfolios s&p 500 stock market Wed, 31 Jan 2018 10:00:06 +0000 Matt Bell 2087458 at http://www.wisebread.com