Investment http://www.wisebread.com/taxonomy/term/4808/all en-US 4 Sneaky Investment Fees to Watch For http://www.wisebread.com/4-sneaky-investment-fees-to-watch-for <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-sneaky-investment-fees-to-watch-for" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_magnifying_glass_000036490728.jpg" alt="Man finding sneaky investment fees to look out for" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Everybody is looking for the next hot stock or mutual fund.</p> <p>But we should be paying closer attention to the fees of the investments that we already own. For example, nine in 10 Americans underestimate the fees of their 401(k) plans. This means that many of us are paying too much for our investments and undermining our financial goals.</p> <p>To keep your investments on target, take notice of these four <a href="http://www.wisebread.com/7-ways-investing-sucks-and-why-you-should-do-it-anyway">investment fees</a>.</p> <h2>1. Front-End Load</h2> <p>A front-end load is a sales charge on purchases that effectively reduces your investment. This investment fee is a commission or sales charge applied at the time of your initial purchase of an investment, such as a mutual fund or insurance policy. Financial planners, investment advisors, and other types of investment intermediaries are the main beneficiaries of front-end loads.</p> <p>Let's assume that you want to invest $5,000 into a mutual fund with a 5% front-end load. That would mean that $250 would go to middlemen and only $4,750 of your original investment actually lands in the mutual fund.</p> <p>Some mutual fund managers claim that the front-end load is necessary to cover the extra services offered in a load fund. However, a study showed that mutual funds without front-end loads <a href="http://www.investopedia.com/articles/mutualfund/07/no-load.asp">significantly outperformed</a> those with front-end loads during the turbulent financial period of 2000 to 2002.</p> <p>Still, some novice investors may still profit from the additional benefits that come from a load fund. Just make sure that you don't pay more than you have to.</p> <ul> <li>According to FINRA Conduct Rule 2830, a front-end load <a href="http://www.investopedia.com/exam-guide/finra-series-6/finra-rules/finra-conduct-rule-2830-investment-company-securities.asp">can't exceed 8.5%</a> of your investment.<br /> &nbsp;</li> <li>If a mutual fund charges a front-end load of 8.5%, then it must offer a breakpoint schedule, rights of accumulation, and reinvestment of dividends and capital gains at net asset value.<br /> &nbsp;</li> <li>Most 401(k) plans allow you to waive the front-end load of a mutual fund.</li> </ul> <h2>2. &quot;Breakpoint&quot; Cost</h2> <p>There is no specific breakpoint cost. Think of this investment fee as the extra money that you're paying to your investment manager by failing to meet a required investment level to obtain a reduced fee. For example, if you were to invest just $2,000 you would pay a 6% sales charge to invest in A-shares of a mutual fund, but if you were to invest $50,000 you would pay a lower 4.75% sales charge for the same share.</p> <p>While diversification is a useful tool to minimize investment risk, too much diversification within the same mutual fund may be increasing your investment expenses.</p> <ul> <li>The larger your investment, the lower your applicable fees. By having $100,000 in investable assets within the same mutual fund family, you can often get some breaks on investment fees.<br /> &nbsp;</li> <li>Immediate family members investing in the same mutual fund company can pool their individual accounts to qualify for lower costs.<br /> &nbsp;</li> <li>When you meet pre-determined total purchase thresholds, certain mutual funds provide rights of accumulation, which qualify you for a reduced sales charge for any additional purchases.<br /> &nbsp;</li> <li>Some mutual funds may allow you to still qualify for a breakpoint benefit when you sign a letter of intent to meet purchase thresholds within a mutually agreed time frame.</li> </ul> <h2>3. Operating Expense</h2> <p>Large companies have more leverage than small ones in driving down the operational costs of a 401(k) plan. That's why large companies are able to pick up the operating expense tab on behalf of their employees.</p> <p>On the other hand, employees participating in the 401(k) of small businesses may be forking out the cash to cover that expense. To determine whether you're paying for your plan's operating expenses, you can check with the manager of your 401(k) plan. Another option is to find how much you're paying for your plan's operating expense by yourself:</p> <ol> <li>Grab a copy of your plan's summary annual report;<br /> &nbsp;</li> <li>Go to the &quot;Basic financial statement&quot; section;<br /> &nbsp;</li> <li>Subtract the amount of benefits paid from the total plan expense;<br /> &nbsp;</li> <li>Divide the amount from step #3 by the total value of the plan; and<br /> &nbsp;</li> <li>Take the percentage from step #4 and multiply it by your total account balance.</li> </ol> <p>If the amount that you're paying seems too high, you have a valid case for asking your employer to consider lower-cost options. When it comes to 401(k) plans, small business owners are receptive to reasonable requests from their employees. A survey found that 32% of small business owners consider requests to <a href="http://money.usnews.com/money/retirement/articles/2014/04/14/how-to-pay-lower-fees-on-your-retirement-investments">switch 401(k) providers</a>, and 30% of those business owners choose lower-cost investment options within a plan.</p> <h2>4. Total Expense Ratio Above 1%</h2> <p>Everybody has to make a living, even investment managers. However, you need to be wary of any investment account that has a total expense ratio above 1%. They'd better be delivering some extraordinary profits year after year to warrant the cost!</p> <p>Let's assume that you have a $10,000 starting balance, a 6% average annual rate of return for your investment account, and a holding period of 10 years. Here are several scenarios for your final balance after 10 years at different total expense ratios.</p> <ul> <li>Expense ratio of 0.30% = $17,408</li> <li>Expense ratio of 0.40% = $17,244</li> <li>Expense ratio of 0.50% = $17,081</li> <li>Expense ratio of 0.60% = $16,920</li> <li>Expense ratio of 0.70% = $16,760</li> <li>Expense ratio of 0.80% = $16,602</li> </ul> <p>The lower the total expense ratio, the more money in your pocket. A useful rule of thumb is to keep the total expense ratio of an actively managed fund below 1%. There are several investment options out there, so look for the ones that meet your target rate of return at competitively priced expense ratios.</p> <p>Remember that most investment managers make no guarantee for returns, but they surely are committed to picking up their fees. Only <a href="http://www.spindices.com/documents/spiva/spiva-us-mid-year-2014.pdf">20% to 35% of portfolio managers</a> beat the benchmark for their category. With total expense ratios as low as 0.17% for some index funds, it's easy to see why more and more investors are shifting their dollars to passive funds.</p> <p><em>What are other investment fees to beware of?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/4-sneaky-investment-fees-to-watch-for">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-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-ways-to-invest-in-biotech-without-getting-burned">7 Ways to Invest in Biotech Without Getting Burned</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-easy-ways-to-start-green-investing">5 Easy Ways to Start Green Investing</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-young-investors-should-stay-the-course-and-continue-to-invest">Why young investors should &quot;Stay the Course&quot; and continue to invest</a></span> </div> </li> <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-reasons-july-is-a-great-month-for-stocks">5 Reasons July Is a Great Month for Stocks</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment charges expenses fees hidden costs mutual funds stocks Mon, 27 Jul 2015 13:00:14 +0000 Damian Davila 1499531 at http://www.wisebread.com 5 Reasons July Is a Great Month for Stocks http://www.wisebread.com/5-reasons-july-is-a-great-month-for-stocks <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-reasons-july-is-a-great-month-for-stocks" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_working_beach_000040378062.jpg" alt="Man realizing July is a great month for stocks" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you think traders are off summer vacationing, think again. There's a lot of action in the markets during the summertime, particularly in July, which makes it a great time to <a href="http://www.wisebread.com/10-signs-a-stock-is-about-to-tank">rebalance your portfolio</a> &mdash; or pull the trigger on the trades you've been scheming about. No doubt, timing the market perfectly is practically impossible. But the historically well-performing month of July is better than many for making positive returns.</p> <p>Read on for our roundup of reasons why July is a great months for stocks.</p> <h2>1. School's Out</h2> <p>Okay, so we lied. Some traders really<em> are</em> on vacation in the summer. But that's good news for you. Here's why: While they're off teaching their toddlers to swim, surf, and make sand castles, the market's value tends to drift higher from where it should be.</p> <p>&quot;During&hellip; summer, professional investors are collectively less focused on news and as a result, information is incorporated into stock prices more slowly,&quot; MIT researcher Lily Fang said. This effect is particularly strong for negative information because taking advantage of negative news by, for instance, short-selling, is more difficult and requires close attention &mdash; a scarce resource in July. &quot;Think about how traders spend their summers,&quot; Fang said. &quot;They're on the beach with their kids. They're traveling overseas with their friends. They're rightfully enjoying the holidays and as a result not paying as much attention to market news.&quot;</p> <p>Just beware of the &quot;after holiday effect.&quot; Stock prices tend to do the <a href="https://mitsloan.mit.edu/newsroom/press-releases/2014-school-holiday-breaks-global-stock-lily-fang.php">worst in September</a> &mdash; when summer vacation's over &mdash; because investors' kids are back in school and they once again have the time to monitor the markets obsessively, according to Fang's research.</p> <h2>2. Midsummer Rules Dow Jones</h2> <p>The Dow Jones industrial average has posted a <a href="http://www.cnbc.com/2015/06/30/the-hottest-stocks-of-july.html">positive July return</a> in seven of the last 10 years. The average gain during that time span was almost 2%. That's a pretty spectacular indication that July is the golden time on the Dow to invest.</p> <h2>3. Historic S&amp;P Data Shows Positive Returns</h2> <p><a href="http://www.moneychimp.com/features/monthly_returns.htm">July's market returns</a> have been up 35 of the last 60 years since 1950, according to S&amp;P 500 data. The average return over that period was 0.8%. That's pretty good, but the kicker is that in recent years the month has performed even better. Since 2005, July has had six up years with an average return of 1.6%. A whopping 80% of all trades have been positive in the last decade on the S&amp;P 500 Energy Sector. So if you're planning to invest in July, you'll do well to pick an energy industry stock.</p> <h2>4. Nasdaq Comes Alive, Too</h2> <p>The Nasdaq composite, which averages a 2.1% gain for the month of July, has posted a positive return in six of the last 10 years.</p> <h2>5. Chinese Stocks Bounce Back</h2> <p>For the last five years, the MSCI China index has been one great big slump in the first six months of the year, typically losing about 10% of its value. Ouch. But July has proven to be the <a href="http://www.telegraph.co.uk/finance/personalfinance/investing/11322368/Investment-calendar-2015-Tips-and-tricks-to-play-stock-market-trends.html">bounce back month</a>, marking the start of a season of strong returns that more than make up for those earlier losses. In 2014, the index fell 3% in the first six months, but then gained more than 10% starting in July.</p> <p>&quot;There is no denying that a pattern has emerged in Chinese equities in the last few years,&quot; said Damien Fahy of the consumer website Money to the Masses. &quot;Its roots lie in the Chinese New Year and corresponding government stimulus which tends to rally markets.&quot; Although this July has been unusually tough for Chinese stocks to date, the month isn't over yet.</p> <p><em>Do you invest in July? Why or why not?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/brittany-lyte">Brittany Lyte</a> of <a href="http://www.wisebread.com/5-reasons-july-is-a-great-month-for-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-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/4-sneaky-investment-fees-to-watch-for">4 Sneaky Investment Fees to Watch For</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-signs-a-stock-is-about-to-tank">10 Signs a Stock Is About to Tank</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-4-best-investments-for-lazy-investors">The 4 Best Investments for Lazy Investors</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/if-youd-held-these-10-stocks-instead-of-sold-youd-be-rich-now">If You&#039;d Held These 10 Stocks Instead of Sold, You&#039;d Be Rich Now</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Dow Jones NASDAQ portfolio positive returns s&p stocks summer vacation Thu, 23 Jul 2015 13:00:09 +0000 Brittany Lyte 1499559 at http://www.wisebread.com 5 Ways to Profit From Legal Marijuana http://www.wisebread.com/5-ways-to-profit-from-legal-marijuana <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-ways-to-profit-from-legal-marijuana" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/weed_plant_000048504088.jpg" alt="Finding ways tp profit from legal marijuana" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Legal marijuana <a href="http://www.washingtonpost.com/blogs/wonkblog/wp/2015/02/12/colorados-legal-weed-market-700-million-in-sales-last-year-1-billion-by-2016/">raked in $700 million</a> for the state of Colorado last year. By 2016, it's expected to flourish into a billion dollar business. That doesn't even begin to scratch the surface, though, since bong and pipes sales and tourist spending at hotels and restaurants are absent from that figure. And as <a href="http://www.wisebread.com/8-things-you-can-do-in-denver-that-you-cant-do-anywhere-else">marijuana is legalized</a> in more states and jurisdictions, the opportunity to profit will only grow.</p> <p>So how can you capitalize on weed?</p> <h2>1. Land Bank Prime Tracts of Farmland</h2> <p>Marijuana doesn't grow on trees. It grows in the ground, and as the legal weed business blossoms, growers will be looking for real estate on which to sow their seeds. Tennessee, Kentucky, Virginia, and the Carolinas are popular states for tobacco growers. If you're in a position to increase your land holdings, you might want to consider investing in farmland in one of these states, since experts say it's likely many weed growers will look to former tobacco farms for their land holdings. California's another good bet. As weed growers look to expand their acreage, the value of land for growing operations is expected to soar.</p> <h2>2. Invest in Marijuana Stocks</h2> <p>In 2014, publically traded marijuana companies experienced double digit gains. That's a good indication that the time is right to invest your green in the weed industry. The ArcView Group, a cannabis industry investment and research firm, predicts a <a href="http://finance.yahoo.com/news/techies-profit-booming-pot-business-140000160.html">33% rise in marijuana sales</a> this year &mdash; from $2.7 billion in 2014 to $3.5 billion in 2015. The potential for future growth is huge. &quot;Big tobacco, big pharma, even big agriculture companies are starting to kick the tires to see where the opportunities are,&quot; said Chris Walsh, managing editor of Marijuana Business Daily. &quot;If full legalization happens, you'll see a surge of companies from other industries get involved.&quot;</p> <h2>3. Land a Job in the Cannabis Industry</h2> <p>There are an estimated 7,500 to 10,000 marijuana industry jobs right now in Colorado &mdash; it's the fastest growing industry in the state. This rapid growth is generating hundreds of new jobs a year. In addition to weed trimming and store clerk gigs, there are managerial roles, information science opportunities, and event promotion jobs. You can easily peruse the opportunities at <a href="http://420careers.com/">420 Careers</a>. Working in the weed business may be more highbrow than you think.</p> <h2>4. Become a Weed Entrepreneur</h2> <p>Apart from the growing and selling of marijuana, there's endless opportunity to cash in on the weed business as an entrepreneur. Legalization has sprouted a burgeoning marijuana packaging and accessories industry. Demand is high for new and innovative projects. A company named Pottles, for example, makes airtight, smell-proof pot containers. Stink Sack vends child-resistant pot packaging.</p> <p><a href="http://thebureau.nyc/collections/all">The Bureau</a> &mdash; a self-funded start-up founded in 2012 with $60,000 and a $500,000 angel investment &mdash; sells stylish, design-driven weed packaging with features like embossed glass, treated wood, and secret compartments. Yahoo! Finance reports that the founders expect their company, which launched this year, to be profitable by the end of its first 12 months in business. &quot;I was, and still am, surprised to see that cannabis is sold in plastic baggies, repurposed plastic pop-top containers, and other methods that more closely mirror the days where cannabis was only available on a street corner,&quot; The Bureau founder Josh Gordon says.</p> <h2>5. Become a Legalization Lobbyist</h2> <p>Michael Correia is the marijuana industry's first full-time lobbyist. He certainly won't be the last. In 1969, only 12% of the country supported the legalization of marijuana, the Washington Post reports. Last year, that number was 58%. The growing desire for legalization, coupled with the small number of places within the U.S. where the drug is legal, is creating a new niche for folks with the skill to persuade lawmakers to support America's newest industry boon. &quot;It's really a legitimate and respected force now,&quot; says Rep. Jared Polis (D-Colo.), one of the leading voices on marijuana legalization in the House.</p> <p><em>Have you considered a job in the pot industry? How about an investment? </em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/brittany-lyte">Brittany Lyte</a> of <a href="http://www.wisebread.com/5-ways-to-profit-from-legal-marijuana">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/great-ways-to-generate-passive-income">Great Ways to Generate Passive Income</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-best-cash-back-credit-cards">5 Best Cash Back Credit Cards</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/10-things-you-should-always-buy-and-sell-on-ebay">10 Things You Should Always Buy and Sell on eBay</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-side-jobs-for-stay-at-home-moms-and-dads">12 Side Jobs for Stay-at-Home Moms and Dads</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/9-ways-to-earn-extra-cash-when-money-is-tight">9 Ways to Earn Extra Cash When Money Is Tight</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Extra Income Investment cannabis legalization marijuana pot weed Thu, 16 Jul 2015 11:00:12 +0000 Brittany Lyte 1485964 at http://www.wisebread.com The 10 Weirdest ETFs You Can Buy http://www.wisebread.com/the-10-weirdest-etfs-you-can-buy <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-10-weirdest-etfs-you-can-buy" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_reading_newspaper_000019458258.jpg" alt="Woman investing in weird ETFs but probably shouldn&#039;t" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you read Wise Bread often, you'll know we're big fans of exchange traded funds, known as ETFs. They are great vehicles for broadening and diversifying your portfolio, and offer some advantages over mutual funds. (See also: <a href="http://www.wisebread.com/8-ways-etfs-can-put-more-money-in-your-pocket-than-mutual-funds?ref=seealso">8 Ways ETFs Can Put More Money in Your Pocket Than Mutual Funds</a>)</p> <p>But as ETFs have grown in popularity, they've also grown in number. And that means there are some very strange ETFs out there. Being weird doesn't make an ETF bad, necessarily, but all too often these unique ETFs are too specialized or complicated to be useful to the average investor. And many of them just aren't good performers.</p> <p>Here's an examination of some of the weirder ETFs out there, with reasons why you shouldn't bother investing in them.</p> <h2>1. High Volatility or Beta ETFs</h2> <p>These ETFs give you exposure to companies that are uniquely sensitive to the ups and downs of the market. Examples include Powershares' S&amp;P 500 High Beta Portfolio ETF [<a href="http://finance.yahoo.com/q?s=SPHB">SPHB</a>] or its High Beta Emerging Markets Portfolio ETF [<a href="http://finance.yahoo.com/q;_ylt=AltJGS9tP77yDaNAPbL0lWpzAcAF?uhb=uhb2&amp;fr=uh3_finance_vert_gs&amp;type=2button&amp;s=EEHB">EEHB</a>]. In theory, these ETFs can help you make more money when markets rise, but it could also mean bigger losses during bear markets. If you're investing for the long term, your goal should be to smooth out the ups and downs, not embrace wild swings. Unless you enjoy getting ulcers, stay away from these ETFs.</p> <h2>2. Inverse ETFs</h2> <p>The idea here is that you are betting against an index, so you can make money during a bear market. Perhaps it makes sense for a short-term investor, but it does not make sense for the typical investor looking to grow wealth over the long term. It's true that stock market can take a nosedive from time to time, but it's very hard to predict exactly when. Over time, markets go up, so let that guide your investment strategy.</p> <h2>3. ETFs for Obscure Countries</h2> <p>For the average investor, there's really no good reason to own an ETF centered solely on, say, Qatar. Look instead to ETFs with a broad exposure to international and emerging markets. The iShares Total International ETF [<a href="https://www.ishares.com/us/products/244048/ishares-core-msci-total-international-stock-etf">IXUS</a>] is a good one, as is the iShares Emerging Markets ETF [<a href="http://www.ishares.com/us/products/244050/ishares-core-msci-emerging-markets-etf">IEMG</a>].</p> <h2>4. Leveraged ETFs</h2> <p>A leveraged ETF can help you get amplified returns, because they take advantage of borrowed money. Think of it as a simpler way to trade on margin. Popular leveraged ETFs include the Daily S&amp;P 500 Bull 3x ETF [<a href="http://finance.yahoo.com/q?s=SPXL">SPXL</a>] and the Ultra S&amp;P 500 ETF from ProShares [<a href="http://www.proshares.com/funds/sso.html">SSO</a>]. Leveraged ETFs aren't bad, but they're not great for a typical investor who's looking for steady and long-term growth. That's because any time you're trying to boost returns through borrowing, you may also see amplified losses.</p> <h2>5. Ultra-Specific Sector ETFs</h2> <p>It's sensible to try and diversify your portfolio by investing in a mix of sectors, such as energy, health care, and technology. But it's possible to get too crazy with it. An ETF for the broad materials sector is fine, but there's no need to delve deep into the agribusiness sector. A general energy ETF will help your portfolio, but do you need specific exposure to solar companies? The impact of these investments could be positive, but relatively miniscule, so don't complicate things for yourself.</p> <h2>6. Advisorshares GlobalEcho Fund [<a href="http://advisorshares.com/fund/give">GIVE</a>]</h2> <p>There's nothing wrong with socially responsible investing, but it's probably best to stay away from this particular ETF, which focuses on investments &quot;that may technologically, socially, and environmentally impact the earth positively.&quot; The ETF's performance is up barely more than 1% in 52 weeks, and its expense ratio of 1.61% is far higher than most ETFs. To find better performance and lower expenses, consider investing in iShares MSCI KLD 400 Social Index Fund [<a href="https://www.ishares.com/us/products/239667/ishares-msci-kld-400-social-etf">DSI</a>] instead.</p> <h2>7. S&amp;P 500 VIX Short-Term Futures ETF [<a href="http://finance.yahoo.com/q?s=VXX">VXX</a>]</h2> <p>I have to admit, I don't really understand this ETF. And I doubt most investors will. Dow Jones says the ETF &quot;utilizes prices of the next two near-term VIX futures contracts to replicate a position that rolls the nearest month VIX futures to the next month on a daily basis in equal fractional amounts.&quot; Got it? Me neither. But I do understand price performance, and this ETF has lost nearly all of its value over the years. Stay away.</p> <h2>8. Market Vectors Gaming ETF [<a href="http://finance.yahoo.com/q?s=BJK">BJK</a>]</h2> <p>This is an ETF that tracks the performance of some of the largest casino companies, including MGM Grand, Las Vegas Sands, and Galaxy International. Many of these aren't bad companies, per se, but this far too specialized an ETF for most investors. Not to mention, anyone who did invest in this ETF in recent years hasn't exactly hit the jackpot. Shares are down 27% over the last three years, and are up just 6% in three years.</p> <h2>9. Exchange Traded Managed Funds</h2> <p>Part of the attraction to ETFs is that they are passively managed and their investments are clearly advertised. But there is a new push for approval of managed ETFs, or ETMFs. In theory, these investments have a chance to outperform an underlying index because they are actively managed. But there's a growing body of evidence that asset managers can't beat the market on a consistent basis. You're better off with an ETF that's simpler and more transparent.</p> <h2>10. Yorkville High Income Infrastructure MLP Index ETF [<a href="http://www.yetfs.com/ymli.aspx">YMLI</a>]</h2> <p>This ETF tracks the movements of select energy infrastructure master limited partnerships. That's a mouthful, and it's pretty unlikely the average investor needs anything that specialized in their portfolio. What's more, this particular ETF has an astonishingly high expense ratio of 5.91%.</p> <p><em>Do you have any unique or interesting ETFs in your portfolio?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/the-10-weirdest-etfs-you-can-buy">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-etfs-can-put-more-money-in-your-pocket-than-mutual-funds">8 Ways ETFs Can Put More Money in Your Pocket Than Mutual Funds</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/etfs-offer-incredible-benefitswith-a-dark-side">ETFs Offer Incredible Benefits...with a Dark Side</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-july-is-a-great-month-for-stocks">5 Reasons July Is a Great Month for Stocks</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/if-youd-held-these-10-stocks-instead-of-sold-youd-be-rich-now">If You&#039;d Held These 10 Stocks Instead of Sold, You&#039;d Be Rich Now</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment ETFs exchange traded funds portfolio risks stock market Wed, 15 Jul 2015 13:00:12 +0000 Tim Lemke 1484611 at http://www.wisebread.com How to Build an Investment Portfolio for Under $5000 http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-build-an-investment-portfolio-for-under-5000" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/financial_growth_000016805229.jpg" alt="Man learning to build investment portfolio with under $5000" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you're relatively new to investing, you might find the number of investment options mind boggling. Moreover, it's not easy to know how much money to place in which types of investments.</p> <p>To help simplify things, let's pretend we have $5,000 to place in a retirement account. The investment mix presented here should be a good guideline for someone looking for growth over the long term. It's not too aggressive, but will allow for a steady increase in retirement savings over the course of many years.</p> <p>You'll note that there are no individual stocks in this portfolio. Instead, there's a heavy focus on mutual funds and ETFs that can give you exposure to a broad mix of stocks.</p> <p>Feel free to adjust your mix depending on your age and risk tolerance, and don't forget to re-balance <a href="http://www.wisebread.com/the-most-important-thing-youre-probably-not-doing-with-your-portfolio">your portfolio</a> once a year so you're staying on track.</p> <h2>$2,000: Total Market Fund or ETF</h2> <p>Every portfolio needs a solid foundation. To get exposure to a wide range of U.S.-based stocks, start by placing a good portion of your money in a mutual fund or exchange-traded fund that seeks to replicate the performance of the entire stock market. I am partial to iShares Total Market ETF [<a href="https://www.ishares.com/us/products/239724/ishares-core-sp-total-us-stock-market-etf">ITOT</a>], and also like Vanguard's Total Market Index ETF [<a href="http://finance.yahoo.com/q?s=VTI">VTI</a>]. Spartan's Total Market Index Fund [<a href="https://fundresearch.fidelity.com/mutual-funds/summary/315911404">FSTMX</a>] is also a good choice. These investments usually have very low expense ratios and can often be traded without a commission, depending on the broker. (Disclaimer: I own all three of the aforementioned in various accounts.)</p> <h2>$1,500: International Equity Index Fund or ETF</h2> <p>To reduce risk, it's important to have some of your money diversified across geographies. Consider putting at least 30% of your money into international equities, which give you exposure to some of the largest companies in Europe, Asia, South America, and even Africa.To get broad exposure to international markets, consider an ETF such as the iShares Total International Stock ETF [<a href="https://www.ishares.com/us/products/244048/ishares-core-msci-total-international-stock-etf">IXUS</a>], or Vanguard's Total International Stock Index Fund [<a href="http://www.morningstar.com/funds/XNAS/VGTSX/quote.html">VGTSX</a>]. If you want to become more diversified in international stocks and take advantage of growth in emerging markets, consider mixing in iShares Emerging Markets ETF [<a href="https://www.ishares.com/us/products/239637/ishares-msci-emerging-markets-etf">EEM</a>] or something similar.</p> <h2>$500: Small Cap Stock Fund or ETF</h2> <p>One of the downsides of investing in a total market fund is that you won't get a lot of exposure to smaller companies. Small companies may have more growth potential than other investments, so it's good to have some in your stock portfolio. The Small Cap Value Fund [<a href="http://www.morningstar.com/funds/XNAS/PRSVX/quote.html">PRSVX</a>] from T. Rowe Price is a good performer, as is Fidelity Advisor Small Cap Growth Fund [<a href="http://finance.yahoo.com/q?s=FCPVX">FCPVX</a>].</p> <h2>$250: Mid Cap Stock Fund or ETF</h2> <p>This is another way to ensure your portfolio isn't too geared to larger companies. Mid cap companies are not too big, not too small, but can offer some nice growth. There are many good ways to get involved with mid caps, but take a look at the SPDR S&amp;P 400 Midcap Growth ETF [<a href="https://www.spdrs.com/product/fund.seam?ticker=MDYV">MDYV</a>], or the Schwab U.S. Midcap ETF [<a href="http://www.morningstar.com/etfs/ARCX/SCHM/quote.html">SCHM</a>].</p> <h2>$250: Real Estate</h2> <p>A complete portfolio should have some real estate exposure, and fortunately there are some easy ways to get into that game without going out and buying an apartment building. Real Estate Investment Trusts allow individual investors to access everything from Class A commercial real estate to hospitals and condominiums developments. Look at the Vanguard REIT Fund [<a href="http://finance.yahoo.com/q?s=VGSIX">VGSIX</a>] to get started.</p> <h2>$500: Bonds</h2> <p>It's good to invest in some bonds as a hedge against risk, and you may even want to ramp this figure up as you get closer to retirement. Vanguard's Total Bond Market Index Fund [<a href="http://www.morningstar.com/funds/XNAS/VBMFX/quote.html">VBMFX</a>] and similar funds will give you exposure to a wide range of corporate and government bonds.</p> <p>This use of $5,000 should give you a well-diversified and balanced portfolio. As you gain confidence and knowledge, don't be afraid to mix in some other investments, including commodities like oil and gas, or precious metals like gold and platinum. Also consider adjusting your exposure to certain business sectors, such as technology, health care. and financials. But most of all, be patient and keep an eye on your long-term goals.</p> <p><em>How have you structured your portfolio?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-most-important-thing-youre-probably-not-doing-with-your-portfolio">The Most Important Thing You&#039;re Probably Not Doing With Your Portfolio</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-ways-to-invest-in-biotech-without-getting-burned">7 Ways to Invest in Biotech Without Getting Burned</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-easy-ways-to-start-green-investing">5 Easy Ways to Start Green Investing</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-sneaky-investment-fees-to-watch-for">4 Sneaky Investment Fees to Watch For</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-ways-etfs-can-put-more-money-in-your-pocket-than-mutual-funds">8 Ways ETFs Can Put More Money in Your Pocket Than Mutual Funds</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment bonds ETFs mutual funds portfolios stocks Mon, 13 Jul 2015 13:00:10 +0000 Tim Lemke 1484692 at http://www.wisebread.com 10 Signs a Stock Is About to Tank http://www.wisebread.com/10-signs-a-stock-is-about-to-tank <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-signs-a-stock-is-about-to-tank" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_reading_newspaper_000055177500.jpg" alt="Woman realizing her stock is about to tank" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If we all knew exactly when stock prices will go up (or down), we'd be residing on our own tropical islands. But predicting the markets is a tough business. That said, it's often possible to know that a stock is due for a big drop in value. There are a variety of signs that can help us know when a company may be overvalued by the stock market.</p> <p>Note that even if one or more of these indicators applies to a <a href="http://www.wisebread.com/7-dumb-stock-picking-mistakes-even-smart-investors-make">stock in your portfolio</a>, it doesn't necessarily mean you should sell. In fact, it may be a good time to buy more of a stock, if you believe it will eventually rebound.</p> <p>Here are 10 potential signs that a stock you own may be ready to tank.</p> <h2>1. The Price-to-Earnings Ratio Is High</h2> <p>A stock price should be based at least loosely on its earnings, so it's important to track a company's earnings on a per-share basis. If a stock is trading at $40, and it earned $2 per share, its P/E ratio is 20. Generally speaking, any P/E ratio over 25 is considered too high, though it's also important to look at expected growth rates. If a P/E ratio is high and a company does not appear to be projecting strong future growth, the stock may be ripe for a tumble.</p> <h2>2. An Earnings Announcement Is Delayed</h2> <p>Companies are required to announce their earnings each quarter, but can occasionally delay their release for a variety of reasons. Often, it's a sign that there will be a some surprise negative news, or some other problem. It's not necessarily wise to immediately sell a stock if the company is late making an announcement &mdash; you should at least hear the company's reasons and determine if they are valid &mdash; but it can be a foreshadowing of bad news. Researchers from Harvard noted that news of an earnings delay can cause the <a href="http://corpgov.law.harvard.edu/2013/05/13/how-do-investors-interpret-announcements-of-earnings-delays/">price of shares to drop</a> 6% in a single day.</p> <h2>3. Price Is Sinking, But Volume Is High</h2> <p>When trying to determine whether a stock is ripe for a big fall, it helps to look at the volume of activity. Generally speaking, the worst combination for a stock is to see higher-than-usual volume on a stock coupled with a lower share price. If you see these two things happen, it's often an indicator that a lot of shareholders are selling. If you're into technical analysis of stocks, this is often referred to as the &quot;accumulation/distribution&quot; indicator.</p> <h2>4. Shares Are Trading Well Above Consensus Price Estimates</h2> <p>Stock analysts are known to issue estimates of a company's earnings per share in advance of an earnings report. And there is something known as a &quot;consensus estimate&quot; that combines the opinions of the analysts and determines a target share price. When share prices are well above the consensus estimate, it's a sign that the company may be overvalued. Be wary of any company that is trading at more than 25% more than the consensus estimate.</p> <h2>5. The Advance/Decline Line Is Sinking</h2> <p>This is another technical analysis tool that can be used to predict when an upward trend may be coming to an end. It's particularly helpful in determining the future path of the overall market, so it can be used to predict prices for things like S&amp;P 500 indexes or ETFs. In simple terms, the advance/decline index tracks the difference between the number of stocks on the rise versus the number on the decline. If the market is going up, but the number of declining stocks outweighs those on the rise, then a reversal of the upward trend may be on the way.</p> <h2>6. The Competition Shows Up</h2> <p>It happens all the time. A company has an innovative and popular product, and spends a few years raking in the dough. But then a much larger company unveils a similar product and has the muscle to dominate the space. Game over. We saw it with Blackberry, after Apple introduced the iPhone. More recently, we've seen struggles from camera maker GoPro, after Sony, Garmin, and others announced they would produce an action camera.</p> <h2>7. Inventories Are Rising, But Not Sales</h2> <p>If you have a company with a rising inventory of products, that can be a good thing, as it may indicate they are stocking up to anticipate demand. But you have to convert inventory into sales. One key thing to track, if you are willing to dissect an earnings report, is a company's inventory-to-sale ratio. The right ratio depends on the industry, but it's generally good to see a ratio close to 2:1. The Census Bureau <a href="https://www.census.gov/mtis/www/data/pdf/mtis_current.pdf">tracks these ratios</a> for various industries, so check out the historic ratios to see if a company is out of line. If it seems like a company has a lot of inventory it's not selling, the stock price will suffer.</p> <h2>8. There's Been Bad News</h2> <p>An airline stock right after a deadly plane crash. An automaker after a massive recall. A drug company after a rejection by the Food and Drug Administration. Every company could be subjected to a potential single event that will hammer its stock price. Be careful, though, before unloading a stock in this situation. A major negative event might lead a stock price to tumble, but it doesn't necessarily mean that the company's fundamentals are unsound.</p> <h2>9. Economic Indicators Aren't Good</h2> <p>It's possible to predict how some company share prices will perform based on statistics that reflect the overall economy. The unemployment rate and consumer confidence survey can be indicators that affect retailers, for instance. Not all companies are impacted by the broader economy in the same way, but some are uniquely sensitive to these reports. And a bad report could mean a drop in share prices.</p> <h2>10. A Leadership Change Is Rumored (Sometimes)</h2> <p>Shareholders like to see stability at the top, and a potential change in leadership can make investors nervous, especially when the top executive is a hugely influential figure. Consider what happened to Apple after Steve Jobs passed away, when shares fell about 8% in a few days. (They did rebound.) A well-run company will have a good succession plan in place, so a leadership change is not always a major problem. And sometimes a change will be for the better. Just be aware of a company's reasoning behind the change, and understand that share prices may be impacted for a brief period while a leadership change takes place.</p> <p><em>What stock value indicators do you track?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/10-signs-a-stock-is-about-to-tank">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-sneaky-investment-fees-to-watch-for">4 Sneaky Investment Fees to Watch For</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-july-is-a-great-month-for-stocks">5 Reasons July Is a Great Month for 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/the-4-best-investments-for-lazy-investors">The 4 Best Investments for Lazy Investors</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/if-youd-held-these-10-stocks-instead-of-sold-youd-be-rich-now">If You&#039;d Held These 10 Stocks Instead of Sold, You&#039;d Be Rich Now</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment markets predicting stock earnings stocks Thu, 09 Jul 2015 13:00:10 +0000 Tim Lemke 1478251 at http://www.wisebread.com Here's How Rich You'd Be If You Stopped Smoking http://www.wisebread.com/heres-how-rich-youd-be-if-you-stopped-smoking <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/heres-how-rich-youd-be-if-you-stopped-smoking" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_cigarette_000023820730.jpg" alt="Woman learning how rich she&#039;d be if she stopped smoking" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>As many as 42 million adults in the U.S. <a href="http://www.cdc.gov/tobacco/data_statistics/fact_sheets/adult_data/cig_smoking/">smoke cigarettes</a> today, according to recent data from the Centers for Disease Control and Prevention (CDC). This isn't a health blog, though, so I'm not going rail on about 480,000 cigarette-related deaths that occur per year or the 16 million Americans who live with a smoking-related disease. I already know you probably want to quit. According to the CDC, more than two thirds of smokers do.</p> <p>Instead, if you're one of the almost 18% of Americans who have yet to quit, I'm here to incent you by drilling down and showing you exactly how much money you could be socking away &mdash; if you weren't spending it on cigarettes. (See also: <a href="http://www.wisebread.com/heres-how-rich-youd-be-if-you-stopped-drinking-expensive-coffee?ref=seealso">Here's How Rich You'd Be if You Stopped Drinking Expensive Coffee</a>)</p> <h2>Not All Cigarette Prices Are Created Equal</h2> <p>Interestingly, the price of a pack of cigarettes is dramatically different, depending on where in the country you live. Each year, The Awl tracks the <a href="http://www.theawl.com/2014/08/how-much-a-pack-of-cigarettes-costs-state-by-state">cost of a pack</a> in each of the 50 states. The least expensive places to smoke are Virginia and Missouri, where a pack costs an average of $5.25. In New York, meanwhile, the price is a staggering $12.85. Everywhere else is somewhere in between.</p> <p>I searched for the average number of cigarettes a smoker smokes per day, but the best I could uncover is a recent poll by Gallup, which indicates that 68% percent smoke less than <a href="http://www.gallup.com/poll/157466/smokers-light-less-ever.aspx">a pack a day </a>while 31% smoke a pack per day (1% smoke more than a pack every day). Without clear data to use as a guide, I decided to guesstimate for this project that the average smoker goes through a half pack (10 cigarettes) per day.</p> <h2>For Those of You in the Cheap States</h2> <p>If you live in Virginia or Missouri, where it's relatively cheap to smoke, a half pack a day habit will run you $18 a week, $78 per month, and $958 per year. That's according to <a href="https://quitnet.meyouhealth.com/#/">QuitNet</a>, a free online resource for tobacco users looking to break the habit.</p> <p>Now, say instead of buying the equivalent of half a pack of cigarettes a day, you instead invest that amount in a mutual fund that averages 8% per year.</p> <ul> <li>After 10 years, you'd have banked $14,988.</li> <li>After 20 years, you'd have banked $52,169.</li> <li>After 30 years, you'd have banked $117,207.</li> <li>After 40 years, you'd have banked $268,030.</li> </ul> <p>That's quite a nest egg. (See also: <a href="http://www.wisebread.com/this-one-thing-will-get-you-to-1-million-tax-free">This One Thing Will Get You to $1 Million (Tax-Free!)</a></p> <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5171/Screen%20Shot%202015-07-01%20at%203.47.48%20PM.png" width="605" height="366" alt="" /></p> <p>I know I said I wasn't going to talk about the health consequences but, well, I just can't help it. (I'm an ex-smoker myself. Everything you've heard about how annoying we are is true.)</p> <p>According to QuitNet, after one week, you've added 12 hours and 50 minutes to your lifespan. After one month, two days and seven hours. After one year, it totals three weeks. Now, that's data worth compounding.</p> <h2>For Those Who Pay a Premium to Smoke</h2> <p>For those in New York who pay $12.85 per pack, the savings are even more dramatic. By quitting the habit, you'll save $44 per week, $192 per year, and $2,345 per year. Invest that amount in a mutual fund that averages 8% percent per year and&hellip;</p> <ul> <li>After 10 years, you'd have banked $36,688.</li> <li>After 20 years, you'd have banked $115,896.</li> <li>After 30 years, you'd have banked $286,901.</li> <li>After 40 years, you'd have banked $656,086.</li> </ul> <p>For many of us, that 40-year number is more than enough to retire on!</p> <h2>And Then There Are the Unquantifiable Costs</h2> <p>Many non-salaried employees aren't paid for sick time, and those with a chronic smoking-related health ailment like respiratory disease or lung cancer are at risk to miss a <a href="http://www.everydayhealth.com/news/smoking-million-dollar-habit/">greater number of work days</a> than those who don't smoke.</p> <p>Even among salaried employees who smoke, there are financial concerns to consider. It's currently illegal to discriminate against smokers in the workplace, but that doesn't keep employers from working around the established system. According to a recent post on Forbes, some employers will <a href="http://www.forbes.com/sites/jaysondemers/2014/07/30/can-you-fire-employees-who-smoke/">refuse to hire a candidate</a> with nicotine in their urine during routine drug testing. For current employees, some may enforce smoke-free campus regulations &mdash; even when an employee is in his own car.</p> <p>Quitting isn't easy. Trust me, I know. Even so, the long-term financial benefits may just be worth it.</p> <p><em>What is your smoking habit costing you?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/alaina-tweddale">Alaina Tweddale</a> of <a href="http://www.wisebread.com/heres-how-rich-youd-be-if-you-stopped-smoking">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-how-rich-youd-be-if-you-stopped-drinking-expensive-coffee">Here&#039;s How Rich You&#039;d Be if You Stopped Drinking Expensive Coffee</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-times-a-gym-membership-isnt-worth-it">5 Times a Gym Membership Isn&#039;t Worth It</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/will-a-dental-discount-plan-save-you-money">Will A Dental Discount Plan Save You Money?</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-i-heart-my-high-deductible-health-insurance-plan">Why I (Heart) My High Deductible Health Insurance Plan</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/6-ways-to-get-your-toiletries-for-cheap-or-even-free">6 Ways to Get your Toiletries for Cheap or Even Free!</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Health and Beauty Investment cigarettes compound interest smoking tobacco Tue, 07 Jul 2015 11:00:14 +0000 Alaina Tweddale 1477279 at http://www.wisebread.com 7 Easy Ways to Invest in China http://www.wisebread.com/7-easy-ways-to-invest-in-china <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-easy-ways-to-invest-in-china" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/china_000031662610.jpg" alt="Cool new ways to invest in China" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>China, with its 1.4 billion people, is overwhelming in size. Investing in China can be daunting. But it also poses a huge opportunity.</p> <p>There are a number of good ways for the American investor to benefit from <a href="http://www.wisebread.com/need-a-job-try-searching-in-china">China's economic growth</a>. And you don't need to know Chinese, or even learn a lot about individual companies there to profit.</p> <p>Consider these Chinese investments to add some geographic diversity to your portfolio.</p> <h2>1. Fidelity China Region Fund (<a href="https://fundresearch.fidelity.com/mutual-funds/summary/315910778">FHKCX</a>)</h2> <p>If you're a Fidelity customer, you can buy and sell this fund with no transaction fee. The fund has risen in value more than 20% this year, and has an expense ratio of just 1%, which is relatively low for international funds. Major holdings include Taiwan Semiconductor, AIA Group, and the China Construction Bank. This fund has a coveted five-star rating from Morningstar.</p> <h2>2. iShares MSCI China ETF (<a href="https://www.ishares.com/us/products/239619/ishares-msci-china-etf">MCHI</a>)</h2> <p>This exchange-traded fund from Blackrock will give you exposure to large and midcap firms in China, and is designed to track the MSCI China index. Its expense ratio is just 0.62%, and top holdings including Tencent Holdings, China Construction Bank, and China Mobile. For a different mix of Chinese investments, also consider the <a href="https://www.ishares.com/us/products/239536/ishares-china-largecap-etf">iShares China Large Cap</a>, and the <a href="https://www.ishares.com/us/products/239620/ishares-msci-china-smallcap-etf">iShares MSCI China Small Cap</a> ETFs. This ETF is free to trade through Fidelity.</p> <h2>3. Kraneshares CSI China Internet ETF (<a href="http://kraneshares.com/kweb/">KWEB</a>)</h2> <p>You've heard the buzz about Alibaba, so here's a way to get in on the action. This ETF, which is less than two years old, has risen in value by more than 30% this year. It counts Tencents Holding Co. and Alibaba as its top holdings.</p> <h2>4. Market Vectors China AMC SME-ChiNext ETF (<a href="http://www.vaneck.com/market-vectors/equity-etfs/cnxt/snapshot/">CNXT</a>)</h2> <p>Shares of this ETF have nearly doubled this year, thanks to good performance from its mix of large and medium Chinese stocks. This ETF just began trading in July of last year, and already has assets of nearly $90 million. Top holdings include East Money Information Co., Sunung Commerce Group, and SIASUN Robot and Automation.</p> <h2>5. Guggenheim China Real Estate ETF (<a href="http://finance.yahoo.com/q?s=tao">TAO</a>)</h2> <p>There's been some talk of a real estate bubble in China, but it hasn't popped yet. This ETF is up more than 15% over the last 52 weeks, as the value of Chinese real estate continues upward. You may never get to own a skyscraper in Shanghai, but this is one way to get a piece of the action.</p> <h2>6. Yum! Brands</h2> <p>It's often a wise idea to invest in an American company that has a big presence in the market with which you are seeking exposure. In the case of Yum! Brands, you'd be investing in one of the top retail developers in China, with 6,800 restaurants (mostly Pizza Hut and KFC) and another 700 on the way this year.</p> <h2>7. Ford and General Motors</h2> <p>What? American automakers? Yes, the Chinese are adding new drivers every day, and seem to like U.S. made cars. The Wall Street Journal in May labeled Ford &quot;The big up-and-comer in China,&quot; and the company has doubled its Chinese market share since 2012. GM has also seen increases in sales. Invest in U.S. automakers, and get some indirect exposure to China in the process.</p> <p><em>Are you considering investing in China?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/7-easy-ways-to-invest-in-china">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-ways-to-invest-in-biotech-without-getting-burned">7 Ways to Invest in Biotech Without Getting Burned</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-sneaky-investment-fees-to-watch-for">4 Sneaky Investment Fees to Watch For</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-reasons-july-is-a-great-month-for-stocks">5 Reasons July Is a Great Month for Stocks</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-ways-etfs-can-put-more-money-in-your-pocket-than-mutual-funds">8 Ways ETFs Can Put More Money in Your Pocket Than Mutual Funds</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment China diversity ETFs overseas stocks Mon, 06 Jul 2015 11:00:12 +0000 Tim Lemke 1475624 at http://www.wisebread.com Start Investing Today: Acorns Lets You Invest Your Change While You Shop http://www.wisebread.com/start-investing-today-acorns-lets-you-invest-your-change-while-you-shop <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/start-investing-today-acorns-lets-you-invest-your-change-while-you-shop" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/investment_000039524102.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>What if you were able to automatically invest some money, every day, in small stress-free amounts? Could investing be that simple? Yep. Just <a target="_blank" href="http://track.linkoffers.net/a.aspx?foid=26166697&amp;fot=9999&amp;foc=1" rel="nofollow">sign up for Acorns</a>.</p> <p>Acorns' message is simple: plant your acorns of pocket change today for steady investment growth and wealth in the future. Their app allows users to invest small amounts of money frequently in one of its diversified portfolios.</p> <h2>Steps to Investing with Acorns</h2> <p>Intrigued? Here&rsquo;s how investing with Acorns works.</p> <h3>1. Invest your change and more</h3> <p>Acorns promotes the idea that you can build a portfolio by investing your virtual change from card transactions, similar to Bank of America&rsquo;s <a href="https://www.bankofamerica.com/deposits/manage/keep-the-change.go">Keep-the-Change Savings Program</a>.</p> <p>Charges to your linked credit cards and debit cards are rounded up to the next dollar amount and eventually invested. So, a $5.10 transaction generates a 90-cent investment. Further, whole-dollar transactions generate a $1 investment by default. When the accumulated change equals $5 or more, it is invested in your chosen portfolio.</p> <p>Investments can also be made on a one-time basis or set up to occur on a daily, weekly, or monthly basis. The minimum investment is just $5 and the maximum daily investment is $10,000.</p> <h3>2. Link your accounts</h3> <p>There are two phases to getting started with Acorns. First, sign up for a general account; next, create an investment account.</p> <p>To initiate the investing process, establish your checking account as a funding source from which transfers are made to and from the investment account.</p> <p>You also have the option of setting up linked accounts consisting of credit cards and debit cards. These linked accounts provide the sources of transactions that can be rounded up, accumulated, and then invested when you cross the firm&rsquo;s $5 investment minimum threshold.</p> <p>If you are a customer of a large financial institution, you may be able to establish a connection between Acorns and your bank or credit card company by entering the username and password associated with your account.</p> <h3>3. Choose a portfolio&nbsp;</h3> <p>The investment portfolios offered by Acorns are diversified among stocks, bonds, and real estate. Like many advisory firms, Acorns adheres to the Modern Portfolio Theory (MPT) in constructing its portfolios. Uniquely, the company has engaged the father of MPT on its investment committee, <a href="https://en.wikipedia.org/wiki/Harry_Markowitz">Nobel Prize winning economist Harry Markowitz</a>.</p> <p>Based on your responses to a series of questions, a portfolio is suggested. There are five portfolios for various levels of risk tolerance: conservative, moderately conservative, moderate, moderately aggressive, and aggressive.</p> <p>Each portfolio contains six ETFs representing large company stocks, small company stocks, emerging market stocks, corporate bonds, government bonds, and real estate. The allocation of asset classes among the ETFs varies with the risk profile.&nbsp;Acorns manages your account with the goal of matching your investment portfolio with the model portfolio.</p> <h3>4. Monitor activity through the mobile app</h3> <p>You can monitor and manage investing activity from the firm&rsquo;s mobile app or its computer dashboard.&nbsp;From either location, review activity, monitor account value, link or unlink round-up accounts and sub-accounts (e.g., your Chase account and various credit cards held with Chase), manage account settings, and evaluate portfolio performance.</p> <p>Review and update settings as soon as your account is opened. Specify whether you want your virtual change or round-ups to be invested automatically or manually. Also decide whether you want to invest a full dollar with whole-dollar transactions. Adjust your settings to invest any amount between $0.00 and $1.00.</p> <h3>5. Pay low fees</h3> <p>Acorns charges a flat fee of $1 per month for accounts valued at less than $5,000. For accounts worth $5,000 or more, you are charged .25% of assets under management annually, billed monthly.</p> <p>Dividend reinvestment and rebalancing are included in its fee. There are no transaction fees associated with transferring money or buying and selling the ETFs contained in each portfolio.</p> <h2>Reasons to Embrace or Avoid Acorns</h2> <p>The ability to invest from your phone, easily, quickly, and often is Acorns&rsquo; key selling point. Those who like to invest spontaneously and tend to have extra funds in their checking accounts may especially enjoy interacting with the app on a regular basis.</p> <p>The investment portfolios are designed to be diversified, allowing investors to participate in the market. When (and if) markets trend upward, each portfolio should generate steady investment returns aligned with acceptable levels of risk.</p> <p>Oddly, even though Modern Portfolio Theory is centered on designing portfolios that align expected returns with certain risk levels through asset allocation, I was not asked specifically about my personal risk tolerance when I signed up with Acorns. Based on the firm&rsquo;s white paper, portfolio recommendations are based on age, net worth, income, time horizon, employment status, and need for liquidity, not necessarily how scared, steadfast, or stimulated you are in turbulent market conditions.</p> <p>Fees are low and competitive with advisors in the <a href="http://www.wisebread.com/should-you-trust-your-money-with-these-4-popular-financial-robo-advisers?ref=acorns">automated investing space</a>.</p> <p>Acorns offers regular investment accounts only, not IRAs, IRA rollovers, etc. Because you have a regular taxable account (and not a tax-advantaged one), you can easily withdraw money. However, there are multi-day delays in receiving funds due to standard settlement and bank processing times.</p> <p>I love the idea of investing the change but found the implementation of Acorns&rsquo; concept to be cumbersome. For starters, setting up the account is relatively easy but time consuming. Further, having to wait for virtual change to build to $5 makes sense in terms of controlling transaction-based costs for Acorns. But the accumulation process is counterproductive to fast and easy investing.</p> <p>Acorns offers an innovative way for users to start investing without needing to pull together a large lump sum. If this has been your mental hurtle, Acorns helps you leap over it. For others, it may seem like a lot of effort for small amounts at a time. Invest accordingly.</p> <p><strong><a target="_blank" href="http://track.linkoffers.net/a.aspx?foid=26166697&amp;fot=9999&amp;foc=1" rel="nofollow">Click here to start an Acorns account today!</a></strong></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/julie-rains">Julie Rains</a> of <a href="http://www.wisebread.com/start-investing-today-acorns-lets-you-invest-your-change-while-you-shop">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-9"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/top-seven-reasons-why-i-use-my-credit-card-for-everything">Top Seven Reasons Why I Use My Credit Card for Everything</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-ways-your-credit-card-will-save-you-money-while-holiday-shopping">11 Ways Your Credit Card Will Save You Money While Holiday Shopping</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-loyalty-rewards-programs-you-didnt-know-existed">12 Loyalty Rewards Programs You Didn&#039;t Know Existed</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-frugal-rules-you-must-follow-when-shopping-at-costco">5 Frugal Rules You Must Follow When Shopping at Costco</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-easy-ways-to-save-money-with-twitter">3 Easy Ways to Save Money With Twitter</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Shopping credit cards Wed, 01 Jul 2015 06:35:13 +0000 Julie Rains 1475942 at http://www.wisebread.com 3 Pearls of Financial Wisdom From Alan Greenspan http://www.wisebread.com/3-pearls-of-financial-wisdom-from-alan-greenspan <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/3-pearls-of-financial-wisdom-from-alan-greenspan" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/Alan_greenspan_000018959048.jpg" alt="Alan Greenspan sharing pearls of financial wisdom" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Known as the Oracle, Alan Greenspan is one of the most widely respected Federal Chairmen of all time due to both his economic knowledge and political savvy.</p> <p>A familiar face throughout two decades of U.S. history, Greenspan is the second-longest serving Federal Reserve Chairman (1987&ndash;2006), just four months behind the top spot. Throughout his long tenure in public service and his prolific career in economic consulting, he accumulated a thorough understanding of how markets work.</p> <p>Here are the three best <a href="http://www.wisebread.com/the-5-best-pieces-of-financial-wisdom-from-warren-buffett">pearls of financial wisdom</a> from Alan Greenspan.</p> <h2>1. Beware &quot;Home Bias&quot; in Investments</h2> <p>In his memoir <a href="http://www.amazon.com/gp/product/0143114166/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0143114166&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=NT6Q75GRUYLG7HXO">The Age of Turbulence</a>, Greenspan warns investors about their tendency to invest their savings in their home country, even though this could mean passing up more profitable foreign opportunities.</p> <p>The problem with having a narrow geographical scope for your investment portfolio is that you may undervalue its actual risk. &quot;When people are familiar with an investment environment, they perceive less risk than they do for objectively comparable investments in distant, less familiar environs,&quot; he points out in his book.</p> <p>Diversification is key in order to spread out and minimize your investment risk. Just like you wouldn't put your entire nest egg in a single stock, you shouldn't limit your investments only to the U.S. economy. By including exposure to both domestic and foreign markets, you may be able to ride out bumps in the U.S. economy with price gains in foreign markets, and vice versa.</p> <p>To keep transaction costs predictable and reduce special risks in international investing, such as currency exchange rates, political events, and different market operations, the SEC suggests you consider the following <a href="http://www.sec.gov/investor/pubs/ininvest.htm">foreign investment options</a>:</p> <ul> <li>Mutual funds, such as global funds, international index funds, and regional/country funds;<br /> &nbsp;</li> <li>Exchange-traded funds, which unlike an international index mutual fund, trade on a stock exchange;<br /> &nbsp;</li> <li>American depositary receipts, which are certificates issued by U.S depositary banks providing ownership interest in foreign corporations;<br /> &nbsp;</li> <li>U.S. traded foreign stocks, such as Canadian (e.g. <a href="http://finance.yahoo.com/q?d=t&amp;s=BMO">NYSE:BMO</a>) or Chinese stocks (e.g. <a href="http://finance.yahoo.com/q?s=BIDU">NASDAQ:BIDU</a>).</li> </ul> <p>Consult with your financial planner or retirement plan administrator to find out more details about your options in foreign investments and to determine whether or not those options make sense for your portfolio.</p> <h2>2. Keep &quot;Irrational Exuberance&quot; in Check</h2> <p>You can't talk about Alan Greenspan without touching on the topic of &quot;irrational exuberance.&quot;</p> <p>He coined this term during his keynote address &quot;The Challenge of Central Banking in a Democratic Society&quot; at the American Enterprise Institute's annual dinner in December 1996. Greenspan prepared a pretty dense speech and he wasn't sure what part of it would make the news. The day after his speech the media focused on this bit, &quot;How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions?&quot;</p> <p>For the average investor, the main takeaway is that we have to leave emotions out of investing. When you can't support your investment decisions through cold hard numbers or market fundamentals, then you become a victim of an investment bubble of your own creation. Unsustainable investor enthusiasm often takes place during periods of economic boom. For example, Forbes has called 2015 the &quot;age of unicorns&quot; because there are more than 80 startups with $1 billion or higher market valuation.</p> <p>When it comes to investing you have to do your due diligence, you can't just wing it or play it by ear.</p> <p>Greenspan believes that the best way to keep irrational exuberance in check is to study the history of financial markets and learn from the experience of past generations. Improving your financial literacy is a common suggestion from past chairs of the Federal Reserve because &quot;Bearnanke&quot; also stands behind that recommendation. (See also: <a href="http://www.wisebread.com/the-5-best-pieces-of-financial-wisdom-from-ben-bernanke?ref=seealso">The 5 Best Pieces of Financial Wisdom From Ben Bernanke</a>)</p> <h2>3. Hold Stocks Beyond Your &quot;Sleeping Point&quot;</h2> <p>Given that Warren Buffett is not only one of history's most successful investors but also one of his dearest friends, Greenspan pays close attention to the investing lessons from the <em>Oracle of Omaha</em>.</p> <p>In <em>The Age of Turbulence</em>, Greenspan points out that Buffett's favorite holding period is <em>forever</em>. The main reason is that several studies have pointed out the historical average market return of 8.5%. Many investors miss out on that potential return because they sell their positions in times of recession for purely emotional reasons.</p> <p>&quot;The market pays a premium to those willing to endure the angst of watching their net worth fluctuate beyond what Wall Streeters call the 'sleeping point,'&quot; writes Greenspan. There are many valid reasons to sell your stocks, such as rebalancing your portfolio back to its target asset allocations or materializing losses to offset big income gains for tax purposes.</p> <p>However, selling down to the sleeping point &mdash; taking only the risk that still allows you to sleep at night &mdash; shouldn't be relied on to emotionally nix your stocks. Take a cue from both Greenspan and Buffet and remember that the well-documented higher rate of return of equities, even adjusted for risk, exceeds that of alternative investments, provided you're willing to buy and hold stocks for the very long run.</p> <p>Investing can feel sometimes as the most unpredictable thing in the world. &quot;Markets do very weird things because it reacts to how people behave, and sometimes people are a little screwy,&quot; warns Greenspan.</p> <p>By having an understanding of the concepts of home bias, irrational exuberance, and sleeping point, you're better equipped to keep a methodical investment strategy.</p> <p><em>What are other great pearls of financial wisdom from Alan Greenspan?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/3-pearls-of-financial-wisdom-from-alan-greenspan">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-10"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-best-websites-to-help-you-retire-early">5 Best Websites to Help You Retire Early</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/womanhood-microscopic-and-other-hot-stock-tips">Womanhood microscopic and other hot stock tips</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/i-am-doing-well-financially-now-what">I Am Doing Well Financially. Now What?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-post-really-suk-kuks-examining-islamic-finance">This Post Really Suk-kuks: Examining Islamic Finance</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-3-best-pieces-of-financial-wisdom-from-oprah-winfrey">The 3 Best Pieces of Financial Wisdom From Oprah Winfrey</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment advice alan greenspan bias finance sleeping point Mon, 22 Jun 2015 13:01:11 +0000 Damian Davila 1460512 at http://www.wisebread.com If You'd Held These 10 Stocks Instead of Sold, You'd Be Rich Now http://www.wisebread.com/if-youd-held-these-10-stocks-instead-of-sold-youd-be-rich-now <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/if-youd-held-these-10-stocks-instead-of-sold-youd-be-rich-now" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_reading_newspaper_000033450380.jpg" alt="Man realizing why it&#039;s good to hold onto a stock" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You've heard this advice before: Buy and hold &mdash; <a href="http://www.wisebread.com/7-dumb-stock-picking-mistakes-even-smart-investors-make">invest for the long term</a>. But it's hard to do when you see some of your investments languish near all-time lows. Patience is challenging, but if you can find a way to stay strong, there's a good chance you'll be rewarded in the long run.</p> <p>Here are 10 recent examples that show how investors with long time horizons will eventually reap great financial benefits.</p> <h2>1. Apple [AAPL]</h2> <p>After the death of Steve Jobs, everyone wondered if the iconic company would return to being the most innovative brand around. It went through a lull, but thanks largely to <a href="http://www.wsj.com/articles/apple-earnings-iphone-powers-results-1430166629">sales of the iPhone</a>, Apple is now the most valuable company in the world and shares are trading near all-time highs. Shares are up more than 20% in 2015 and 50% since this time last year.</p> <h2>2. Amazon [AMZN]</h2> <p>For years now, many observers have complained about Amazon's thin or even non-existent profits. Shares tumbled badly last fall after the <a href="http://time.com/3536969/amazon-fire-phone-bust/">troubled launch of the Amazon Fire Phone</a>. But they rebounded to new heights at the end of April after reports of strong earnings from Amazon's web services business. Shares have risen more than 40% in the last 52 weeks, rewarding those investors who hung in there.</p> <h2>3. Netflix [NFLX]</h2> <p>The company made what was widely regarded as a massive blunder back in 2011 when it announced it would split into separate services for streaming movies and DVDs. It was an unpopular move that led the company's stock price to drop by more than 60%. But Netflix quickly fixed the mistake and is now a leader in the streaming media business, and its stock price has jumped nearly ten-fold.</p> <h2>4. AOL, Inc. [AOL]</h2> <p>For many people, AOL may be a symbol of the old dot-com era, complete with dial-up Internet access and romantic comedies featuring Tom Hanks and Meg Ryan. But the reality is that the company has quietly transformed itself into a content provider and key player in the web ad space. Shares shot up recently when Verizon announced it would buy AOL for more than $4 billion. If the sale goes through, AOL shareholders will end up with $50 a share &mdash; a 37% increase over the last year and 80% jump in the last three years. (Disclosure: I own some shares of AOL.)</p> <h2>5. Boeing [BA]</h2> <p>Shares of this major aerospace company languished as the government announced cuts in defense spending &mdash; and the troubled rollout of the 787 &quot;Dreamliner&quot; plane in 2013 did not help. Then came the disappearance of Malaysian Airlines Flight 370 &mdash; a Boeing plane. But anyone who unloaded their Boeing shares would have missed out on a big rise in share value. Boeing shares are up 40% in the last two years, and up 12% since the start of 2015. The company delivered a record 723 airplanes in 2014 and expects to deliver another 755 this year.</p> <h2>6. Facebook [FB]</h2> <p>Despite considerable hype, Facebook's initial public offering did not go particularly well. And things got worse, as shares of the social networking company traded at about half their original value for much of 2012. Eventually, Facebook CEO Mark Zuckerberg went all in with a mobile advertising strategy that paid off for the company and investors. Shares now trade at about $80, near an all-time high. (Disclosure: I own some shares of Facebook.)</p> <h2>7. Rite Aid [RAD]</h2> <p>For a long time, investors in this pharmacy chain were the ones buying heavy doses of stomach and headache medicine, as the company was practically near bankruptcy during the economic downturn. But a restructuring plan has helped Rite Aid shed debt and increase sales, to the benefit of investors. Shares have nearly doubled since the fall of 2014 and are up 15% year to date.</p> <h2>8. Goldman Sachs [GS]</h2> <p>Of course, anyone invested in bank stocks in 2008 would have lost some serious dough. But despite some major problems with some of its peers and the industry as a whole, Goldman's viability as a company was never really questioned. Shares dropped to about $50 in the fall of 2008, but then rose back to $189 by the following year once investors realized that Goldman wasn't going anywhere. After another tough year in 2011, shares are now trading at more than $200.</p> <h2>9. Starbucks [SBUX]</h2> <p>The coffee chain is seemingly ubiquitous, but that doesn't mean it has always been a great performing stock. During the financial downturn, shares got battered as customers cut back on pricey vanilla lattes. Starbucks shares traded below $4 in the fall of 2008, but then began a steady climb as the company did the tough work of closing underperforming stores and laying off workers. Shares topped $93 in April of this year and then split. Kudos to those investors who hung in there.</p> <h2>10. The S&amp;P 500</h2> <p>No doubt, it was tough times in 2008, when the S&amp;P 500 fell more than 36%. But those investors with the intestinal fortitude to hang in there were rewarded with nice returns every year since. The average annual return from 2009&ndash;2014 was 17.4%, more than recouping any losses from the period of the Great Recession. To invest in the S&amp;P 500 or broader U.S. stock market, look at low-cost mutual funds or ETFs, such as Vanguard's S&amp;P 500 Index Fund (VFINX) or iShares Total Market ETF (ITOT).</p> <p><em>Do you have any tales of stocks you're grateful to have kept?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/if-youd-held-these-10-stocks-instead-of-sold-youd-be-rich-now">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-11"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-debate-between-buy-and-hold-vs-timing-the-market">The Debate Between Buy and Hold vs Timing The Market</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/survive-the-bear-market-10-steps-to-ride-the-downturn">Survive The Bear Market: 10 Steps To Ride The Downturn</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/buy-and-hold-investing-four-ways-to-make-it-more-effective">Buy-and-Hold Investing: 4 Ways to Make It More Effective</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-sneaky-investment-fees-to-watch-for">4 Sneaky Investment Fees to Watch For</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-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment buy and hold stock market stocks Fri, 12 Jun 2015 11:00:11 +0000 Tim Lemke 1451212 at http://www.wisebread.com 7 Ways to Invest in Biotech Without Getting Burned http://www.wisebread.com/7-ways-to-invest-in-biotech-without-getting-burned <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-ways-to-invest-in-biotech-without-getting-burned" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/pills_and_money_000037331956.jpg" alt="How to invest in biotech and not get burned" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Investors looking for large returns may be tempted to check out the biotech sector, in hopes that the next big cancer drug will also mean big revenue potential. It's easy to be lured by the possibility of fast dollars, but there is also a high level of risk.</p> <p>But it's also quite possible a company will never develop products that will reach the market. It often takes years to learn if a biotech company's <a href="http://www.wisebread.com/9-safe-investments-that-arent-bonds">investments</a> pay off, and there are many obstacles to turning research and development into a marketable, revenue-producing product. On the flipside, an investor can see massive returns very quickly if a biotech firm is successful.</p> <p>Here are some strategies for investing in the biotech sector without losing your shirt.</p> <h2>1. The Bigger, the Better</h2> <p>One of the risky things about investing in biotech companies is that many of them are quite small, and their fortunes can depend heavily on the success of one or two products. A bigger company will be able to withstand the blow of poor results from one clinical trial. Look to large biotech players such as <a href="http://finance.yahoo.com/q?s=GILD">Gilead [GILD]</a>, <a href="http://finance.yahoo.com/q?s=AMGN">Amgen [AMGN]</a>, or <a href="http://finance.yahoo.com/q?s=CELG">Celgene [CELG]</a>, which each have market capitalizations of $100 billion or more.</p> <h2>2. Go With a Fund or ETF</h2> <p>Rather than place a bet on a single company, consider putting your money in the broader biotech market. There are several well-performing mutual funds and exchange-traded funds that give you biotech exposure but across a diverse set of players in the healthcare industry. The Vanguard Health Care Index Fund [VHT] is a solid fund offering a consistent track record of growth with relatively low fees. Also consider the <a href="https://www.spdrs.com/product/fund.seam?ticker=xbi">SPDR S&amp;P BioTech ETF [XBI]</a> and the <a href="https://www.ishares.com/us/products/239511/ishares-us-healthcare-etf">iShares U.S. Healthcare ETF [IYH]</a></p> <h2>3. Invest in Pharma, Rather Than Pure Biotech</h2> <p>In many cases, there is not much difference between biotech companies and pharmaceutical firms. Both types of companies engage in research and development, but pharmaceutical firms also get involved in manufacturing and marketing drugs themselves. Thus, pharmaceutical firms tend to be larger and their stock performance will be less volatile. Johnson &amp; Johnson, GlaxoSmithKline, and Pfizer have been consistently solid performers for decades.</p> <h2>4. Look for FDA Approval</h2> <p>Every biotech company will claim that it's on the verge of a breakthrough, but only those with government approvals have something that's truly worth investing in. If a company recently got approval from the Food and Drug Administration for a drug, then it has something tangible that could bring in revenue. Without an approval, you're only investing in possibilities.</p> <h2>5. Seek the Rarest and Worst Diseases</h2> <p>This may seem macabre, but the biotech companies that will reap the largest returns are those developing drugs to tackle the most deadly medical conditions. And if the company is testing drugs for something rare, there's a chance the drug could be developed without a competitor. In these cases, seek companies that have at least put a drug through Clinical Phase II or III.</p> <h2>6. Find an Acquisition Target</h2> <p>Rather than try to guess which companies might get approval for a drug, consider looking for those that could be bought by bigger players. Bloomberg News reported in January that biotech firms could be <a href="http://www.bloomberg.com/news/articles/2015-01-14/biotech-s-hot-ipo-market-creates-next-takeover-targets-real-m-a">hot targets for larger pharma companies</a> this year. For big pharmaceutical companies, buying young biotech companies is a way for them to spark growth.</p> <h2>7. Be Diversified</h2> <p>It always makes sense for your investment portfolio to have a wide array of stocks and other investments from different industries and asset classes. This is especially important when investing in biotech stocks, because they are so volatile. If biotech stocks or funds are a relatively small part of a large and diverse set of investments, then you need not worry too much if some investments don't work out.</p> <p><em>Do you invest in biotech? Why or why not?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/7-ways-to-invest-in-biotech-without-getting-burned">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-12"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-sneaky-investment-fees-to-watch-for">4 Sneaky Investment Fees to Watch For</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-etfs-can-put-more-money-in-your-pocket-than-mutual-funds">8 Ways ETFs Can Put More Money in Your Pocket Than Mutual Funds</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-easy-ways-to-invest-in-china">7 Easy Ways to Invest in China</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-best-online-brokerages-for-your-ira">5 Best Online Brokerages for Your IRA</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment biotech ETFs mutual funds pharmaceuticals stocks Wed, 10 Jun 2015 11:00:11 +0000 Tim Lemke 1451218 at http://www.wisebread.com Best Money Tips: Amateur Investing Mistakes You Can Avoid http://www.wisebread.com/best-money-tips-amateur-investing-mistakes-you-can-avoid <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-amateur-investing-mistakes-you-can-avoid" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple-iStock_000054013060_Small.jpg" alt="couple thinking about the future" title="couple thinking about the future" class="imagecache imagecache-250w" width="250" height="146" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="http://www.wisebread.com/topic/best-money-tips">Best Money Tips</a> Roundup! Today we found some great articles on beginner investing mistakes you can avoid, reasons why being cheap is bad, and frugal ways to relax on a stressful day.</p> <h2>Top 5 Articles</h2> <p><a href="http://www.currentoncurrency.com/10-amateur-investing-mistakes-to-avoid/">10 Amateur Investing Mistakes You Can Avoid</a> &mdash; Don't expect the stock market to make you a millionaire overnight. [Current on Currency]</p> <p><a href="http://www.creditdonkey.com/cheap-bad.html">23 Reasons Why Being Cheap is Bad</a> &mdash; Having a cheap-is-better mindset can cause you to buy things even when you don't need them. [Credit Donkey]</p> <p><a href="http://www.popsugar.com/smart-living/Ways-Relieve-Stress-31075809">Gimme a Break: 101 Frugal Ways to Relax</a> &mdash; Have a piece of dark chocolate, which relieves stress and lowers blood pressure. [PopSugar Smart Living]</p> <p><a href="http://couplemoney.com/frugal-fun/52-frugal-and-fun-date-ideas/">52 Frugal and Fun Date Ideas</a> &mdash; Take a bike tour around your city! [Couple Money]</p> <p><a href="http://www.lazymanandmoney.com/how-much-emergency-fund-should-you-have/">How Much Emergency Fund Should You Have?</a> &mdash; You'll need to consider several factors, including your job security and your assets. [Lazy Man and Money]</p> <h2>Other Essential Reading</h2> <p><a href="http://www.artofmanliness.com/2015/05/29/how-to-get-your-car-unstuck-from-anything-an-illustrated-guide/">How to Get Your Car Unstuck From&hellip;Anything: An Illustrated Guide</a> &mdash; Stuck in a ditch? Try taking these steps first before you call a tow truck. [The Art of Manliness]</p> <p><a href="http://wealthyturtle.com/fun-staycation-activities/">Fun Family Staycation Activities That Won&rsquo;t Break Your Budget</a> &mdash; Allow yourself to splurge a little and try out a must-go restaurant in your city. [Wealthy Turtle]</p> <p><a href="http://www.dontpayfull.com/blog/11-genius-ways-to-organize-your-closet-on-a-budget">11 Genius Ways To Organize Your Closet On a Budget</a> &mdash; User your closet doors to hang accessories that are not too heavy, like purses, ties, hats, and scarves. [Don't Pay Full]</p> <p><a href="http://www.dumblittleman.com/2015/06/5-tricks-overcome-anxiety-fears.html">5 Tricks How to Overcome Anxiety and Fears</a> &mdash; Try one of these techniques to work through your feelings of anxiety and fear.&nbsp;[Dumb Little Man]</p> <p><a href="http://parentingsquad.com/working-dads-7-steps-to-make-your-health-a-priority">Working Dads: 7 Steps to Make Your Health a Priority</a> &mdash; Listen to your brain and body when something feels off, so you can catch a problem before it becomes a bigger issue. [Parenting Squad]</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/amy-lu">Amy Lu</a> of <a href="http://www.wisebread.com/best-money-tips-amateur-investing-mistakes-you-can-avoid">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-13"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-dumb-investments-smart-people-make">5 Dumb Investments Smart People Make</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-beginning-investor-mistakes-ive-made-and-you-dont-have-to">5 Beginning Investor Mistakes I&#039;ve Made (And You Don&#039;t Have To)</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-sneaky-investment-fees-to-watch-for">4 Sneaky Investment Fees to Watch For</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-july-is-a-great-month-for-stocks">5 Reasons July Is a Great Month for Stocks</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment best money tips investing mistakes Fri, 05 Jun 2015 19:00:08 +0000 Amy Lu 1447873 at http://www.wisebread.com 9 Safe Investments That Aren't Bonds http://www.wisebread.com/9-safe-investments-that-arent-bonds <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-safe-investments-that-arent-bonds" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_holding_piggy_bank_000021177412.jpg" alt="Man making safe investments that aren&#039;t bonds" title="" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>So you have a good nest egg built up and you want to protect it. Bonds are a popular choice for those looking for stability, but these days, they are being viewed with more skepticism as interest rates may soon be on the rise.</p> <p>What to do? There are plenty of other places to put your money with relatively low risk. Consider these investments that offer predictable returns and some peace of mind for investors.</p> <h2>1. Cash</h2> <p>I know, it's boring. But if you truly don't want to see your nest egg decline, there are worse things than placing your money in a bank. Interest rates are near historic lows, so you won't be getting much of a return, but inflation is also pretty low right now, so cash isn't really losing value, either. To get a <em>slightly </em>higher return than a run-of-the-mill savings account, consider looking into certificates of deposit, some of which allow you to withdraw money without penalty.</p> <h2>2. REIT Stocks</h2> <p>Shares of real estate investment trusts, or REITs, can be a stable part of an investment portfolio because they're known for high dividends (though not necessarily growth in share value). REITs are a way for <a href="http://www.wisebread.com/the-3-best-books-to-start-investing-today">an individual investor</a> to have real estate in their portfolio without needing to buy property. They are furthermore required to pay out all of their taxable income in the form of dividends. This makes them a great option for income investors, though it's still important to diversify your portfolio to protect against a crash in the real estate sector (like we saw in 2008). Remember that REIT dividends also count as ordinary income for tax purposes.</p> <h2>3. Lending Club</h2> <p><a target="_blank" href="http://track.linkoffers.net/a.aspx?foid=22948877&amp;fot=9999&amp;foc=1" rel="nofollow">Lending Club</a> is an increasingly popular investment vehicle that allows an individual to invest in other people's debt. You can build a portfolio of loans based on your own risk tolerance, and there's a good chance you'll make money because Lending Club only approves applications from borrowers with solid credit. Lending Club claims that 99% of account holders with more than 100 notes earn positive returns. (See also: <a href="http://www.wisebread.com/everything-you-need-to-know-about-peer-to-peer-investing-with-lending-club?ref=seealso">Everything You Need to Know about Investing with Lending Club</a>)</p> <h2>4. Your Electric Company</h2> <p>Investing in utilities such as your electric provider will historically bring you steady, if unspectacular, returns. Generally, utilities pay above-average dividends and are a reliable bet because they provide products and services that we all use. If you are unsure of what specific companies to invest in, consider buying into the Vanguard Utilities Index Fund (VPU) or the iShares US Utilities ETF (IDU).</p> <h2>5. Annuities</h2> <p>There are many different types of annuities, but most of them operate on the principle of paying out a steady stream of income for a set period of time &mdash; or even the rest of your life. Some annuities are designed to give you maximum payments each month, while others are designed to offer additional tax-deferred savings if you've already maxed out your other retirement contributions.</p> <h2>6. Preferred Stock</h2> <p>Shares of preferred stock can go up and down just like common shares, but offer some advantages for those looking for more stability. Generally, preferred stocks offer a fixed dividend, and owners of these have priority over the owners of common shares if a company goes bankrupt. If you're interested in preferred stock, but unclear on what company to invest in, consider a mutual fund or ETF, such as the iShares U.S. Preferred Stock ETF.</p> <h2>7. Consumer Goods</h2> <p>Everyone needs food and clothing. And our economy is built on the idea of people buying stuff, after all. That's why if you invest in consumer goods, you'll probably see a steady and solid investment return even when the rest of the stock market is all over the place. Companies like Procter &amp; Gamble are good bets, or you could invest in a vehicle such as the iShares Dow Jones U.S. Consumer Goods Sector Index Fund (IYK.)</p> <h2>8. Health Care and Pharmaceuticals</h2> <p>People aren't getting any younger, and Americans are going to need health care regardless of the economic environment. The Vanguard Health Care Fund (VGHCX) has generated a 13% return over the last decade and nearly 30% over the last year. Companies like Johnson &amp; Johnson and Pfizer have been some of the most reliable performers in the stock market for decades.</p> <h2>9. The Broader Stock Market</h2> <p>Yes, the conventional wisdom is that you should avoid investing in equities if you want to protect your assets. But there is an argument to be made that investing in the S&amp;P 500 is as safe an investment as anything else. Consider that the value of the S&amp;P 500 has risen every year in the last decade, except for one (2008). In fact, since 1980, the market has <a href="http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html">brought positive returns</a> in all but six years. Investing in index funds or ETFs such as the iShares Total Market ETF is anything but a risky move.</p> <p><em>What alternatives to bonds do you use to provide stable returns?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/9-safe-investments-that-arent-bonds">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-14"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-times-you-shouldnt-invest-in-stocks">10 Times You Shouldn&#039;t Invest in Stocks</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-most-important-thing-youre-probably-not-doing-with-your-portfolio">The Most Important Thing You&#039;re Probably Not Doing With Your Portfolio</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-invest-in-the-stock-market">Why invest in the stock market?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-easy-ways-to-start-green-investing">5 Easy Ways to Start Green Investing</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment annuities bonds cash equity stocks Wed, 03 Jun 2015 11:00:10 +0000 Tim Lemke 1438346 at http://www.wisebread.com The 3 Best Books to Start Investing Today http://www.wisebread.com/the-3-best-books-to-start-investing-today <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-3-best-books-to-start-investing-today" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_reading_000027426724.jpg" alt="Man reading three books every beginner investor should read" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Most of us want to start investing. And why not? It can make you solid returns, and it looks easy enough, right? But many beginners make the mistake of rushing into stock investing without properly educating themselves on the subject. Your best strategy is to get educated ASAP, and checking out these three books for <a href="http://www.wisebread.com/the-4-best-investments-for-lazy-investors">beginning investors</a> is a great start.</p> <h2><em>One Up on Wall Street, </em>Peter Lynch</h2> <p>The subtitle of this book tells it all: <em>How to Use What You Already Know to Make Money in the Market</em>. In <a href="http://www.amazon.com/gp/product/0743200403/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0743200403&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=2VO2GCZVK5MXJ5SG">One Up on Wall Street</a>, Fidelity Investments legend Peter Lynch uses an easy-to-follow approach to show readers that you, too, can make money in the market without all the fancy degrees and investment expertise. Learning to read company financials is certainly a mind-numbing experience, but Lynch cuts to the chase and teaches you what you need to know. His wisdom shows readers that all you have to do is invest in the companies and products you already use and know.</p> <h2><em>The Intelligent Investo</em>r, Benjamin Graham</h2> <p>Even Warren Buffet opines that Graham's work is, &quot;By far the best book on investing ever written.&quot; And <a href="http://www.amazon.com/gp/product/0060555661/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0060555661&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=RSUBJGQXKOOXSUZU">The Intelligent Investor</a>, written in 1949, certainly doesn't disappoint. While this book is more technical than <em>One Up on Wall Street</em>, its solid advice to beginners makes it a must on any bookshelf.</p> <p>Graham is interested in what he calls &quot;value investors,&quot; who aren't into speculation or day-trading, but rather willing to learn about stock investing from the ground up, and follow a well-rounded and consistent investment strategy. His book marks a departure from other investment books, mainly because his approach is about limiting losses more than maximizing profits. That's counter-intuitive advice for many.</p> <h2><em>How to Make Money in Stocks,</em> William J. O'Neil</h2> <p>Although more technical than the first two books, <a href="http://www.amazon.com/gp/product/0071752110/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0071752110&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=AVVVVP2EGZ2HCYW3">How to Make Money in Stocks</a> lays out a seven-step plan, CAN SLIM, for minimizing risk and maximizing gain. Stock charts are not an easy read. Full of lines, numbers, and information, stock chart reading is normally reserved for the savvy investor. However, with this book, you can learn how to spot profitable trends in charts. But this book is not just about stock investing &mdash; there's also a thorough discussion on how to use the teachings to score deals in mutual funds and <a href="http://www.wisebread.com/commission-free-etfs-a-great-option-for-cost-conscious-investors">exchange-traded funds</a> (ETFs).</p> <p>O'Neil's information is not for the faint of heart, and it'll take time to really digest and implement his teachings. His seven-step formula is very specific, but will turn you into a great technical stock evaluator along the way.</p> <p>These three books comprise a great starting library for any beginning investor. Start with <em>One Up On Wall Street</em>, and then make your way through the rest. Comparing and contrasting the three will give you a solid base for investing that you can use for a lifetime.</p> <p><em>What investing books do you recommend beginners use?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/shannah-game">Shannah Game</a> of <a href="http://www.wisebread.com/the-3-best-books-to-start-investing-today">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-15"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-7-most-successful-women-investors">The 7 Most Successful Women Investors</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/book-review-game-over">Book review: Game Over</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/book-review-full-of-bull-do-what-wall-street-does-not-what-it-says-by-stephen-mcclellan">Book Review: Full of Bull - Do What Wall Street Does, Not What it Says by Stephen McClellan</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-8-classic-personal-finance-books-you-must-read">The 8 Classic Personal Finance Books You Must Read</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-investors-with-better-returns-than-warren-buffett">5 Investors With Better Returns Than Warren Buffett</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment benjamin graham books investing peter lynch reading Wall Street william j. o'neil Mon, 01 Jun 2015 11:00:08 +0000 Shannah Game 1437166 at http://www.wisebread.com