Investment http://www.wisebread.com/taxonomy/term/4808/all en-US Are You Choosing the Right Fund for Your Portfolio? http://www.wisebread.com/are-you-choosing-the-right-fund-for-your-portfolio <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/are-you-choosing-the-right-fund-for-your-portfolio" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_reading_newspaper_75921495.jpg" alt="Learning if mutual funds are better than ETFs" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>With a market of over $30 trillion, mutual funds are some of the most popular investments. But the $3 trillion ETF (<a href="http://www.wisebread.com/the-10-weirdest-etfs-you-can-buy" target="_blank">Exchange Traded Fund</a>) market is catching up quickly. So, what <em>are </em>ETFs? How do they differ from mutual funds? And are they right for you? Here's what you need to know:</p> <h2>Mutual Funds 101</h2> <p>When you invest in an individual stock, the success of your investment is completely dependent upon the success of that one company. But when you invest in a mutual fund, your money is diversified. It's pooled with many other investors' money and then invested in many companies, based on the design of the fund or the decisions of the fund manager.</p> <p>It's the same with bonds and bond funds, or real estate and real estate funds.</p> <p>Think of an exchange-traded fund as a close cousin of a mutual fund. It, too, manages a pool of money from many investors, spreading it among many investments. But there are some very important differences between ETFs and mutual funds.</p> <h3>ETFs Are Priced Throughout the Day</h3> <p>When you enter an order to purchase a mutual fund, the order will fill at the end of the day, after the value of all of its underlying assets are tallied.</p> <p>ETFs, on the other hand, can be bought and sold throughout the day like stocks. When you enter an order to purchase an ETF, your order will typically be filled very soon after entering the order at a price very close to the price you saw when you placed the order.</p> <p>That's one of the main reasons why ETFs were created. On October 19, 1987, a day now known as &quot;Black Monday,&quot; the U.S. stock market fell by nearly 23%. Mutual fund investors who wanted to sell their shares couldn't until all the damage had been done. Three years later, the first ETF was launched, giving investors all of the diversifying benefits of a mutual fund but the flexibility to buy or sell throughout the trading day.</p> <h3>ETFs Have Lower Expenses</h3> <p>Exchange-traded funds tend to have lower operating expenses than mutual funds, and that lower cost structure is passed along to investors in the form of lower expense ratios. For example, Vanguard's S&amp;P 500 index <em>mutual fund</em> (ticker symbol VFINX) has an expense ratio of .16%. If you invest $1,000 in the fund, $1.60 will go toward fund expenses. That's already very low. However, if you invest in Vanguard's S&amp;P 500 <em>exchange-traded fund</em> (ticker symbol VOO), you'll pay an even lower expense ratio of .05% &mdash; or 50 cents per $1,000 invested.</p> <h3>ETFs Have Lower Minimums</h3> <p>Many mutual funds have minimum initial investment amount requirements. Common amounts range from $250 to $3,000, but some funds require as much as $10,000.</p> <p>With ETFs, the minimum investment amount required is the cost of one share. If you wanted to invest in Vanguard's VFINX mutual fund, you'd need to come up with at least $3,000 for your initial investment. However, getting started with what, in essence, is the ETF version of the same fund, VOO, would cost only about $190 &mdash; the price of one share when this article was written.</p> <h2>Which Is Better?</h2> <p>There are three main factors that can help you decide whether to go with a mutual fund or an exchange-traded fund.</p> <h3>Availability</h3> <p>You may not have a choice. Some 401K plans don't yet include ETFs in the investment options they make available to participants. If that's true with your workplace plan, you'll have to go with one or more of the available mutual funds.</p> <h3>Strategy</h3> <p>While the ETF universe is growing rapidly, there are still many more mutual funds. So, it could be that the investment strategy you're following calls for the use of a particular mutual fund and there are no suitable ETF substitutes.</p> <h3>Cost</h3> <p>If you're following an investment strategy that calls for the use of a particular fund that's available as a mutual fund or an ETF, check on each one's expense ratio. It's very likely that the ETF will cost less, making it the better choice.</p> <h2>One Last Consideration</h2> <p>Some critics say ETFs can get investors in trouble by encouraging more trading. They argue that because the funds can be bought and sold throughout the day, they'll tempt otherwise conservative investors to take undue risk and turn them into roll-the-dice day-traders.</p> <p>But that's like arguing that because <em>some </em>people get into car accidents, <em>no one </em>should be allowed to drive. If you follow the rules of the road for wise investing &mdash; if you're a long-term investor, not a short-term trader &mdash; ETFs can be a very efficient, cost-effective investment vehicle.</p> <p><em>So, which is it for you? Mutual fund or ETF?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/are-you-choosing-the-right-fund-for-your-portfolio">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-weirdest-etfs-you-can-buy">The 10 Weirdest ETFs You Can Buy</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-etfs-can-put-more-money-in-your-pocket-than-mutual-funds">8 Ways ETFs Can Put More Money in Your Pocket Than Mutual Funds</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-things-everyone-should-know-about-the-commodities-markets">8 Things Everyone Should Know About the Commodities Markets</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-investment-mistakes-we-all-make">11 Investment Mistakes We All Make</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment bonds commodities comparisons ETFs exchange traded funds mutual funds portfolio stock market Wed, 27 Jul 2016 09:30:36 +0000 Matt Bell 1757851 at http://www.wisebread.com 7 Money Moves to Make as Soon as You Conquer Debt http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-money-moves-to-make-as-soon-as-you-conquer-debt" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_happy_sunset_79384959.jpg" alt="Woman making moves after conquering debt" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Congratulations &mdash; you're debt free! Now what?</p> <p>The road to debt elimination was long and treacherous, but just because the black cloud of lingering bills is no longer hanging over your head, that doesn't mean your financial house is in order. It's in better shape, sure, but you've still got a ways to go. To continue working toward that goal, here are a few smart moves you should make as soon as you get out of the red:</p> <h2>1. Rearrange and Trim Your Budget</h2> <p>Your top priority when getting out of debt is to not get back into debt. To accomplish that, you'll need to make changes to your spending and savings habits. You'll also need to revisit your budget and rearrange your priorities. Now that you don't have credit card or loan payments bleeding you dry every month, you'll have more disposable income &mdash; and you need to decide what you'll do with it to improve your quality of life and set yourself up for the future. Cut out anything that's unnecessary: Maybe it's the cable that you don't watch much of, the gym membership you don't use, or subscriptions to services you can live without. Whatever is it, cut the fat and don't look back.</p> <h2>2. Get Back to Building Your Emergency Fund</h2> <p>If you've been digging yourself out of a negative-money pit, chances are you don't have much of an emergency fund &mdash; and that needs to change ASAP. Building an emergency fund is the best way to avoid a potential debt scenario in the future. You'll be able to draw from that account to pay off life's little surprises in full, so you're not constantly treading water every time something unexpected happens.</p> <p>&quot;I recommend having an emergency fund saved up equal to six months' worth of expenses,&quot; says financial planner Russell Robertson of Alidade Wealth Partners in Atlanta, GA. &quot;This will give you time to get back on your feet if something unforeseen happens without completely disrupting everything in your life.&quot;</p> <h2>3. Check in on Your Credit Situation</h2> <p>Brace yourself. If you've been battling debt for an extended period of time &mdash; especially if you've only being sending in minimum payments &mdash; your credit situation is likely less than ideal. The good news, however, is that you're in the clear now (debt-wise, anyway), and this is the best time to <a href="http://www.wisebread.com/what-does-your-credit-score-mean-good-bad-or-excellent?ref=internal">start rebuilding your credit</a>.</p> <p>Having a solid credit score puts you in a strong position when you need to finance a purchase, like a house or car, or apply for a new line of credit. It's always a good idea to know where you stand with credit and take steps to improve it.</p> <h2>4. Max Out Your Matching-Dollar Opportunities for Retirement</h2> <p>Like your emergency fund, contributions to your 401K and IRA were probably low (or perhaps even nonexistent) while you concentrated on paying down your debt. With more funds freed up now, it's important to start concentrating on your future &mdash; especially your retirement goals &mdash; and that includes maxing out dollar-matching opportunities to take full advantage of free money.</p> <p>&quot;401K plans in 2016 have a contribution limit of $18,000 a year, plus an extra $6,000 for people over 50, so with no debt to pay, you might have the opportunity to reach that limit now,&quot; says financial planner and investment adviser Jaycob Arbogast of Arbogast Advisers. &quot;Similarly, an IRA has a $5,500 limit for people under 50 and a $6,500 limit for people 50-plus, so maxing out those plans might be a good idea too. For example, with a 6% return, adding an extra $5,000 each year to your retirement savings from age 50 to 60 could add an additional $65,000 to your retirement savings. That's a great boost that someone in debt might not be able to maintain.&quot;</p> <h2>5. Start Investing With Long-Term Returns in Mind</h2> <p>Personally, I recommend investing in real estate, but what you invest in is up to you, so long as you're investing. Outside of your emergency fund, your money should never sit in a savings account earning fractions of pennies. Instead, you'll be better off putting that money in places that promise bigger returns over the long term, so you can meet your savings goals sooner and continue making more investments for (hopefully) a more prosperous life.</p> <p>Alternatively, Robertson recommends the stock market.</p> <p>&quot;If your budget still has room for more saving, put that money to work by investing in the markets,&quot; he advises. &quot;Exchange-traded funds (ETFs) are a great way to get diversified, low-cost exposure, and many online brokerages will offer commission-free ETF options as well.&quot;</p> <h2>6. Put Money Back Into the Investments You Already Have &mdash; Like Your Home</h2> <p>For many people, their homes are their biggest investments. To ensure that investment pays off the way you want and need it to, you have to maintain it. Thus, when you've paid off your debt, start thinking about home improvement projects that will increase value. Just be careful that you're not taking on projects that cost more than the house is worth. The last thing you need is to dump your savings into your home if the project doesn't enhance the house enough to make it worthwhile in the long run.</p> <h2>7. Open a Money Market Account for Higher Interest on Savings</h2> <p>If you have a substantial amount of savings in your emergency fund &mdash; and you should &mdash; that money shouldn't be in a traditional savings account. Contact your bank, or research others, to find savings accounts that offer the best interest rates, like money market accounts or high yield savings. Bottom line, there's absolutely no reason you shouldn't be getting the most bank for your buck, especially where savings are concerned.</p> <p>Robertson agrees, and in this particular case, rescinds his recommendation to invest in stocks.</p> <p>&quot;If there is something specific you are saving up for &mdash; a celebratory trip to Europe? A wedding? &mdash; within the next two to three years, I would recommend keeping that money out of the stock market,&quot; he says. &quot;Instead, consider a money market account or CD from an online bank. In many cases you can get close to 1% interest right now on cash that is still guaranteed up to FDIC limits (currently $250,000). In fact, this is a good idea for that emergency fund as well &mdash; something that earns interest and is separate from your everyday checking account.&quot;</p> <p><em>What else should the newly debt-free do with their money?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-biggest-myths-about-investing">The 10 Biggest Myths About Investing</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-pay-down-debt-first-or-invest">Should You Pay Down Debt First or Invest?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-choosing-the-right-fund-for-your-portfolio">Are You Choosing the Right Fund for Your Portfolio?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/401k-or-ira-you-need-both">401K or IRA? You Need Both</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/best-online-sites-for-building-wealth">Best Online Sites for Building Wealth</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Debt Management Investment 401k advice credit score emergency funds ETFs home improvements IRA money moves retirement stock market Fri, 15 Jul 2016 09:00:17 +0000 Mikey Rox 1752364 at http://www.wisebread.com 401K or IRA? You Need Both http://www.wisebread.com/401k-or-ira-you-need-both <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/401k-or-ira-you-need-both" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/IRA_cash_401k_27036895.jpg" alt="Here&#039;s why you need a 401K and a Roth IRA" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>There are two primary tax-advantaged ways to save for retirement. You could contribute to a workplace retirement plan, such as a 401K plan, or open an Individual Retirement Account (IRA).</p> <p>But which one should you use? In some cases, the answer may be &quot;both.&quot; Here are three considerations as you decide which plan(s) works for you:</p> <h2>1. Does Your Employer Provide Matching Money?</h2> <p>If your employer offers a 401K plan and matches some of the money you contribute, start your retirement savings there. That's the easiest money you'll ever make.</p> <p>Under a typical arrangement, your employer may contribute 50 cents to one dollar for every dollar you contribute, up to 6% of your salary. Even at the low end, that's a guaranteed 50% return on your money. So, at very least, contribute the full amount that's eligible to be matched.</p> <p>At that point, you'll probably have an important decision to make. You very likely need to contribute more than 6% of your salary in order to save enough for retirement. (Do you know <a href="http://www.wisebread.com/one-smart-thing-you-can-do-for-your-retirement-today">how much <em>you </em>should save</a>?)</p> <p>If so, should you simply contribute more to your workplace plan? Or, would you be better off investing those additional dollars through an IRA? Questions two and three will help you decide.</p> <h2>2. Does Your Plan Have What You Need?</h2> <p>Does your workplace plan offer the right investment choices in order for you to follow your strategy of choice? This is especially important if your employer doesn't match contributions, since it means selecting low-cost investments likely to generate strong returns is even more important.</p> <p>If you're keeping it simple by using a target-date fund, it <em>may</em> be fine to use your 401K exclusively for your retirement savings.</p> <p>But what if you're following a more involved strategy &mdash; one that includes the use of a gold fund, for example &mdash; but your 401K plan doesn't offer the necessary investment choices?</p> <p>This would be one good reason make use of an IRA, where you'll have access to a wide range of investment options.</p> <h2>3. How Much Do the Investments in Your Plan Cost?</h2> <p>Even if you're keeping things simple by using a target-date fund offered through your 401K, check on that fund's fees. In particular, find out what its <em>expense ratio</em> is. That's the percentage of the fund's assets deducted each year to cover fund expenses, such as management and administrative costs. If your fund has an expense ratio of .5%, that means for every $1,000 you have invested, $5 is going toward these expenses.</p> <p>Expense ratios vary quite a bit from fund to fund. For example, Vanguard's target-date fund for people planning to retire in 2050 charges just .16%, whereas American Funds' 2050 target-date fund charges .76%.</p> <p>That may not sound like a big deal, but let's say you now have $25,000 in your 401K plan, contribute $500 per month, and earn an average annual return of 7% before expenses, no matter which fund you choose.</p> <p>After 35 years, if you had used the fund charging .16%, you'd end up with more than $1,080,000. If you had used the fund charging .76%, you'd end up with about $150,000 less.</p> <p>So, if the type of fund you'd like to invest in is available for a lower cost outside your 401K plan, that would be another reason to consider an IRA.</p> <h2>Final Factors</h2> <p>Keep in mind that IRA annual contribution limits are much lower than 401K plan limits &mdash; $5,500 vs. $18,000 (or $6,500 versus $24,000 for people age 50 and older). If you contribute 6% of your salary to your 401K in order to take full advantage of your employer's match and then max out an IRA, it's possible you'll still need to invest more. So, head back to your 401K plan and finish out your retirement plan investing there.</p> <p>Also, while a high income will not make you ineligible for your employer's 401K plan, there <em>are&nbsp;</em><a href="https://www.irs.gov/uac/newsroom/irs-announces-2016-pension-plan-limitations-401-k-contribution-limit-remains-unchanged-at-18-000-for-2016">income-based eligibility restrictions for IRAs</a>.</p> <p>There's much to be said for simplicity, but depending on how you answered the questions above, using your workplace plan <em>and </em>an IRA may turn out to be more profitable. Yes, it'll involve a little more work than investing in your workplace plan alone. But being able to follow your strategy of choice and avail yourself of investments with lower fees could pay significant dividends down the road.</p> <p><em>So, which is it for you? 401K or IRA?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/401k-or-ira-you-need-both">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-important-things-to-know-about-your-401k-and-ira-in-2016">5 Important Things to Know About Your 401K and IRA in 2016</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-reasons-why-a-roth-ira-may-be-better-than-your-401k">4 Reasons Why a Roth IRA May be Better Than Your 401(k)</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/403b-vs-401k-how-are-they-different">403B vs. 401K: How Are They Different?</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/should-you-choose-a-roth-401k-or-a-regular-401k">Should You Choose a Roth 401k or a Regular 401k?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/three-easy-steps-to-take-for-a-better-401k">3 Easy Steps to Take for a Better 401k</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement 401k contributions employer matching individual retirement account IRA Thu, 07 Jul 2016 09:01:07 +0000 Matt Bell 1746129 at http://www.wisebread.com 5 Reasons to Stay Away From Penny Stocks http://www.wisebread.com/5-reasons-to-stay-away-from-penny-stocks <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-reasons-to-stay-away-from-penny-stocks" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/penny_stock_investment_407668.jpg" alt="Learning reasons to stay away from penny stocks" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Penny stocks are inexpensive equities trading for as little as pennies per share. Because they do not meet rigorous financial reporting requirements, you won't find these stocks listed on the NYSE or NASDAQ. Instead, they're traded on the over-the-counter market rather than the stock exchanges where more reputable stocks are found. You've probably heard stories about people getting rich from penny stocks, but consider these reasons to stay away. (See also:&nbsp;<a href="http://www.wisebread.com/are-you-making-the-biggest-investment-risk-of-all" target="_blank">Are You Making the Biggest Investment Risk of All?</a>)</p> <h2>1. You Don't Know What You Are Buying</h2> <p>When I look at buying something that is really cheap, my first question is, &quot;Why is that so inexpensive?&quot; Most penny stock is in companies with few or no assets. It's also hard to know what you are getting, since the financial reporting requirements are less rigorous than for other stocks. Without audited financial reports, it is easy to be misled as an investor and buy stock in a company that is basically worthless.</p> <h2>2. Penny Stocks Can Be Difficult to Sell</h2> <p>A big consideration for any investment is your exit strategy &mdash; how will you get your cash out? Since penny stocks are not traded on stock exchanges, it can be difficult to find a buyer when you want to sell. There are just not that many investors looking for stock in companies with low asset value and less than standard financial documentation.</p> <h2>3. Penny Stock Scams and Fraud</h2> <p>Penny stocks are often associated with scams and &quot;pump and dump&quot; schemes. Some penny stock investors will buy lots of shares of worthless stock, promote it through mass email as the next &quot;hot stock,&quot; and then sell it when the stock price peaks. The stock price then goes back down and everyone who thought they were buying a hot stock is left with a loss and a stock that is hard to sell.</p> <h2>4. Like Day Trading, But Worse</h2> <p>Many people who invest in penny stocks are not investing based on the value of the business, but are trying to make money from the volatility of penny stocks &mdash; buying a stock when the price is moving up, and selling it within a few days before the price goes back down. But you know that trying to time the market is always risky. Doing this with penny stocks is even riskier than with other assets, since limited financial information is available.</p> <h2>5. You Will Likely Lose Money</h2> <p>Since penny stock companies have low asset value, there is significant risk that the company could go bankrupt and leave you with worthless stock. A buy and hold strategy for penny stocks may leave you with zero value instead of growth in the stock price. Even if you don't plan to hold a penny stock for long, you are most likely to notice a penny stock while it is &quot;hot,&quot; meaning you are buying near the peak price and will probably lose money by the time you can sell it.</p> <p><em>Have you ever been burned playing with penny stocks?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dr-penny-pincher">Dr Penny Pincher</a> of <a href="http://www.wisebread.com/5-reasons-to-stay-away-from-penny-stocks">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/womanhood-microscopic-and-other-hot-stock-tips">Womanhood microscopic and other hot stock tips</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt">7 Money Moves to Make as Soon as You Conquer Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-choosing-the-right-fund-for-your-portfolio">Are You Choosing the Right Fund for Your Portfolio?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-to-do-when-you-suspect-a-scam">What to Do When You Suspect a Scam</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/learn-how-to-invest-with-these-5-stock-market-games">Learn How to Invest With These 5 Stock Market Games</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment day trading fraud losing money over the counter penny stocks scams stock market Mon, 04 Jul 2016 10:00:04 +0000 Dr Penny Pincher 1743167 at http://www.wisebread.com 10 Stocks Every Recent Grad Should Own http://www.wisebread.com/10-stocks-every-recent-grad-should-own <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-stocks-every-recent-grad-should-own" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/new_grad_happy_20845110.jpg" alt="Woman buying stocks every recent grad should own" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you're just fresh out of college, you may be broke and not yet in a position to invest. But if you find a little extra cash, or are fortunate enough to be gifted some stock as a graduation gift, there are a number of great options that have a great track record of solid performance.</p> <p>These are stocks that have rarely let investors down over the course of decades, and they often pay great dividends, too.</p> <p>If there's a list of stocks that recent grads should consider owning, these 10 should be included.</p> <h2>Microsoft [<a href="http://www.nasdaq.com/symbol/msft">Nasdaq: MSFT</a>]</h2> <p>Bill Gates' old company made headlines recently when it bought the professional networking site LinkedIn. It's now a massively diverse tech firm with PCs, tablets and phones, software, and a popular video game system.</p> <h2>Coca-Cola [<a href="http://www.google.com/finance?cid=6550">NYSE: KO</a>]</h2> <p>Yes, we know that America is supposed to be moving away from sugary drinks. But this company has managed to sell a ton of Coke while diversifying its product line to include everything from Dasani water, to Powerade and Honest Tea. Coca-Cola shares have been in positive territory for eight straight years, and with a market cap of nearly $200 billion, it's likely a long-term winner.</p> <h2>Apple [<a href="http://www.nasdaq.com/symbol/aapl">Nasdaq: AAPL</a>]</h2> <p>Shares of this technology company have dipped about 20% in the last year, but that's all the more reason to consider buying now. This is still one of the largest, most influential and inventive companies out there. Chances are, if you are a recent college grad, you use Apple products. So go with what you know, and reap the financial rewards. (Disclosure: I own some shares of Apple.)</p> <h2>Facebook [<a href="http://www.nasdaq.com/symbol/fb">Nasdaq: FB</a>]</h2> <p>Okay, full disclosure: I bought some shares of Facebook stock a while back, and I have no complaints. Shares are up more than 40% in the last year, as the company continues to bust through earnings predictions. Facebook has 1.65 billion active users, and the company could vault to new heights with recent investments into virtual reality. <a href="http://www.wisebread.com/6-ways-social-media-can-save-you-money" target="_blank">Social media</a> may be a fad, but Facebook will be here to stay.</p> <h2>Procter and Gamble [<a href="http://finance.yahoo.com/q?s=PG">NYSE: PG</a>]</h2> <p>Do you wash your clothes and your dishes? Do you brush your teeth? Do you use paper towels? P&amp;G sells products that people all over the world use every day. This is one of those stocks you can practically &quot;set and forget&quot; and see a very solid return nearly every year. A dividend yield of more than 3% doesn't hurt, either.</p> <h2>AT&amp;T [<a href="http://finance.yahoo.com/q?s=T">NYSE: T</a>]</h2> <p>Admittedly, this is not the most exciting stock in the universe. But it's reliable, with a good dividend and not much volatility. AT&amp;T recently hit a 52-week high amid reports that it's bidding for some of Yahoo's assets. But any share growth is a bonus for this company that's now dishing out a 4.8% dividend yield. (Disclosure: I own shares of AT&amp;T, gifted to me in the 1990s!)</p> <h2>Johnson &amp; Johnson [<a href="http://finance.yahoo.com/q?s=JNJ">NYSE: JNJ</a>]</h2> <p>Like P&amp;G, Johnson &amp; Johnson is a dividend aristocrat, meaning that it has paid out and increased its dividend every year for 25 straight years. This is a big company that's neck deep in the growing health care sector, and it sells a lot of products, including shampoo, soap, and hand lotion, that people use all the time. JNJ shares are up 18% this year, and has had just 13 down years since 1975. A 2.7% dividend yield is also a selling point.</p> <h2>Wal-Mart [<a href="http://finance.yahoo.com/q?s=WMT">NYSE: WMT</a>]</h2> <p>When you have revenue approaching half a trillion dollars (yes, trillion with a &quot;t&quot;), you are a company worth investing in. Wal-Mart does well when the economy is doing well and folks are spending money. Wal-Mart does well in slow economic times, when shoppers are looking for low prices. There is some concern about the long-term future of brick-and-mortar retail, but Wal-Mart right now has more than four times the revenue of Amazon.</p> <h2>Sysco Foods [<a href="http://finance.yahoo.com/q?s=SYY">NYSE: SYY</a>]</h2> <p>If you've ever eaten at a restaurant, you've probably gotten food from Sysco. This is another dividend aristocrat that has seen shares rise 19% in 2016, while boasting a healthy dividend yield of 2.5%. It's been one of the most reliable stocks for decades, and people aren't going to stop eating at restaurants anytime soon.</p> <h2>Amazon [<a href="http://www.nasdaq.com/symbol/amzn">Nasdaq: AMZN</a>]</h2> <p>The world's top online retailer can be frustrating, because founder and owner Jeff Bezos has always focused more on growing his company than worrying about profitability. Some shareholders got frustrated with Amazon and left last year, but now shares are up over $700, nearing an all-time high. In addition to massive online sales revenue, Amazon has made a killing from its web services subsidiary, which pulled in $604 million in profits last year. One of these days, all of Amazon's reinvestment will likely pay off with massive profits that will send shares to even bigger heights.</p> <p><em>Have you ever been gifted (or given) shares? What stocks were they?</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-stocks-every-recent-grad-should-own">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-ways-to-invest-50-500-or-5000">The Best Ways to Invest $50, $500, or $5000</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/save-your-retirement-by-avoiding-these-10-risky-investments">Save Your Retirement by Avoiding These 10 Risky Investments</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-only-8-rules-of-investing-you-need-to-know">The Only 8 Rules of Investing You Need to Know</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/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/158-free-investment-classes-from-morningstar-earn-rewards-while-you-learn">158 Free Investment Classes From Morningstar: Earn Rewards While You Learn</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Amazon apple Coke Facebook gifts graduation market Microsoft profits stocks Fri, 24 Jun 2016 09:30:19 +0000 Tim Lemke 1736531 at http://www.wisebread.com Ask the Readers: What Has Been Your Best Investment Yet? http://www.wisebread.com/ask-the-readers-what-has-been-your-best-investment-yet <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/ask-the-readers-what-has-been-your-best-investment-yet" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_woman_cash_88256101.jpg" alt="Man and woman sharing their best investments yet" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p><em>Editor's Note: Congratulations to <a href="http://www.wisebread.com/ask-the-readers-what-has-been-your-best-investment-yet#comment-792927">Elle</a>, Martha, and Natasha for winning this week's contest!</em></p> <p>We make many investments throughout our lives &mdash; many require money, time, effort, or some combination of all three. The big ones are education, career, and retirement, but the small investments like a weekend getaway with your friends or weekly dinner-dates with your spouse are no less valuable.</p> <p><strong>What has been your best investment yet?</strong> What did you have to put in, and what did you get out of it? What big investments are you working on now?</p> <p>Tell us about your best investment and we'll enter you in a drawing to win a $20 Amazon Gift Card!</p> <h2>Win 1 of 3 $20 Amazon Gift Cards</h2> <p>We're doing three giveaways &mdash; here's how you can win!</p> <h3>Mandatory Entry:</h3> <ul> <li>Post your answer in the comments below. One commenter will be randomly selected to win a $20 Amazon Gift Card!</li> </ul> <h3>For Extra Entries:</h3> <ul> <li>You can tweet about our giveaway for an extra entry. Also, our Facebook fans can get an extra entry too! Use our Rafflecopter widget for your chance to win one of the other two Amazon Gift Cards:</li> </ul> <p><a id="rcwidget_kt6a0txr" data-template="" data-theme="classic" data-raflid="79857dfa250" rel="nofollow" href="http://www.rafflecopter.com/rafl/display/79857dfa250/" class="rcptr">a Rafflecopter giveaway</a> </p> <script src="https://widget-prime.rafflecopter.com/launch.js"></script></p> <p>If you're inspired to write a whole blog post OR you have a photo on flickr to share, please link to it in the comments or tweet it.</p> <h4>Giveaway Rules:</h4> <ul> <li>Contest ends Monday, June 27th at 11:59 p.m. Pacific. Winners will be announced after June 27th on the original post. Winners will also be contacted via email.<br /> &nbsp;</li> <li>You can enter all three drawings &mdash; once by leaving a comment, once by liking our Facebook update, and once by tweeting.<br /> &nbsp;</li> <li>This promotion is in no way sponsored, endorsed or administered, or associated with Facebook.<br /> &nbsp;</li> <li>You must be 18 and US resident to enter. Void where prohibited.</li> </ul> <p><strong>Good Luck!</strong></p> <p><strong>$1,500 Giveaway!</strong> Don't forget to enter before June 30th for your chance to win $1,500 in prizes in our Rutgers Giveaway! If you are a young adult, take a quick survey on your financial decisions and you could win a $500 or one of five $200 Amazon gift cards. For more information and to enter, check out our <a href="http://www.wisebread.com/rutgers-is-giving-away-1500-to-wise-bread-readers">giveaway article</a>!</p> <div class="field field-type-text field-field-blog-teaser"> <div class="field-items"> <div class="field-item odd"> Tell us about your best investment and we&#039;ll enter you in a drawing to win a $20 Amazon Gift Card! </div> </div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-jacobs">Ashley Jacobs</a> of <a href="http://www.wisebread.com/ask-the-readers-what-has-been-your-best-investment-yet">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/ask-the-readers-what-is-your-new-years-resolution">Ask the Readers: What Is Your New Year&#039;s Resolution?</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/ask-the-readers-whats-the-biggest-item-in-your-budget">Ask the Readers: What&#039;s the Biggest Item in Your Budget?</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/ask-the-readers-would-you-relocate-for-the-perfect-job-chance-to-win">Ask the Readers: Would You Relocate for the Perfect Job? (Chance to win!)</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/ask-the-readers-name-your-favorite-moment-of-2010">Ask the Readers: Name Your Favorite Moment of 2010</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/ask-the-readers-how-do-you-care-for-your-pet-affordably">Ask the Readers: How Do You Care For Your Pet Affordably?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Giveaways Investment Ask the Readers best investment Tue, 21 Jun 2016 10:00:05 +0000 Ashley Jacobs 1733468 at http://www.wisebread.com Best Online Sites for Building Wealth http://www.wisebread.com/best-online-sites-for-building-wealth <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-online-sites-for-building-wealth" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/smartphone_wealth_building_55483540.jpg" alt="Man finding the best sites for wealth building" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Managing your money has never been easier with the influx of countless online sites to help you build wealth. In the past, your options were limited to either hiring a financial planner, or going at it on your own and hoping you were on track to reach your goals.</p> <p>But now there are online companies for building wealth that offer many of the services that you would receive if you hired a financial planner for a fraction of the price. After all, everyone should have the <a href="http://www.wisebread.com/the-surprising-true-source-of-wealth-creation-that-you-probably-already-have" target="_blank">opportunity to build wealth</a>, not just those who already have a lot of zeros in their bank account.</p> <h2>Betterment</h2> <p>Based off your age and your income, <a href="http://track.flexlinks.com/a.ashx?foid=1029882.2101559&amp;fot=9999&amp;foc=1">Betterment</a> helps you dial in your financial goals and create a solid plan around those goals. The three primary goals that Betterment helps you reach are Safety (with adequate emergency fund savings), Retirement (making sure you are on target to achieve your retirement goals), and Investing (growing and preserving your capital over time). Through the use of technology and automation, Betterment can offer very low fees to manage your money, starting at .35% annually. Most traditional investment advisers would charge fees upwards of 1% a year. Saving money in fees means that you get to put more money in your pocket, and achieve all of your awesome goals much sooner.</p> <h2>Personal Capital</h2> <p>When was the last time you took a look at your net worth? If you're like most people, you've probably never taken the time to figure out your net worth and analyze your current and future financial road map. <a href="http://track.linkoffers.net/a.aspx?foid=26123426&amp;fot=9999&amp;foc=1">Personal Capital</a> offers an all-in-one wealth dashboard with robust financial tools to keep you informed and on track. On top of their net worth planner, Personal Capital also provides tools to analyze your investment portfolio with their Investment Checkup as well as a retirement planner and wealth management (for a fee). Signing up is free, and you can access all your information on their mobile app or desktop version. One of their most popular tools is the Cash Flow Analyzer, which gives details about your weekly, monthly, and annual spending habits so you can dive deep into what you are spending on things like eating out, entertainment, and travel.</p> <h2>GoldBean</h2> <p><a href="http://www.hellogoldbean.com">GoldBean</a> believes that investing should be easy, fun, and approachable. Geared toward the beginner investor, GoldBean uses their technology to analyze your bank statements to find investment options based around the companies that you love. They believe that you should always invest in what you know &mdash; the companies that you already love and trust. Once they've analyzed your current spending, they create a customized portfolio, provide ongoing financial advice, and offer the ability to buy funds as your experience and confidence in investing grows. Annual membership starts at $50 a year, and trading fees are low at $4.95 per trade after two month's free trading.</p> <h2>Sprinklebit</h2> <p>Stock investing can be scary for anyone, but especially a beginner. There are so many choices, and it's hard to figure out what is best for your situation. <a href="https://www.sprinklebit.com">Sprinklebit</a> believes in demystifying stock investing by using the same principles of Facebook &mdash; social sharing &mdash; and the notion that you should never trade alone. When you sign up for Sprinklebit, you have access to all the other Sprinklebit customers and their portfolios to help you make better investing decisions. You can see which stocks are performing well and which ones are the losers before you put a dime of your money into the stock. Sprinklebit doesn't just stop there. They believe in education and have created 24 chapters of in-depth material to take you through all the different steps of investing for free.</p> <p>You can also set up a mock portfolio with their Market Simulator and use $5,000 free &quot;Sprinklebucks&quot; to give a portfolio a test drive before you pony up any of your real money. With the market simulator, you have access to real-time trading data just like you would in a real portfolio. Once you get your confidence, you can move over into a live portfolio and begin trading. Each trade costs $8, and if you're more advanced, you can move up to their premium option which gives you some advanced trading tools.</p> <h2>Blooom</h2> <p>If you're one of those set-it-and-forget-it types who chose your 401K funds years ago and has never taken a second look, <a href="http://www.blooom.com">Blooom</a> is going to become your best friend. Blooom was created as an easy and affordable way to fix and manage your 401K to meet your needs. Their promise is &quot;No more pie charts, line graphs, or nausea,&quot; but simple, easy to understand knowledge, and tips about how to maximize your 401K funds. You can use their free analysis tool to find out if your 401K is positioned properly (many aren't), and then sign up and pay $1 per month for accounts under $20,000 and $15 per month for accounts over $20,000. There are no other hidden fees, and you can cancel your membership at any time. Professional advisory would cost you a lot more if you turned to an individual broker for assistance. With Blooom, you don't need to be a finance whiz create a 401K portfolio that puts you ahead of the retirement game.</p> <p><em>What's your favorite online company for building wealth?</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/best-online-sites-for-building-wealth">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/7-investment-accounts-all-30-somethings-should-have">7 Investment Accounts All 30-Somethings Should Have</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt">7 Money Moves to Make as Soon as You Conquer Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-only-8-rules-of-investing-you-need-to-know">The Only 8 Rules of Investing You Need to Know</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-financial-moves-you-will-always-regret">9 Financial Moves You Will Always Regret</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-things-your-financial-advisor-wishes-you-knew">7 Things Your Financial Advisor Wishes You Knew</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment 401k betterment blooom online companies personal capital retirement stocks trading wealth building Tue, 21 Jun 2016 09:31:25 +0000 Shannah Game 1728677 at http://www.wisebread.com Are You Making the Biggest Investment Risk of All? http://www.wisebread.com/are-you-making-the-biggest-investment-risk-of-all <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/are-you-making-the-biggest-investment-risk-of-all" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_watering_plants_9791310.jpg" alt="Man making biggest investment risk of all" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When you're young, you're full of bravado. You're willing to step out on the skinny branches and take some risks. At least, that's the stereotype.</p> <p>When it comes to investing, though, it turns out that today's young adults are anything <em>but</em> risk takers. According to a recent study by UBS, Millennials (people ages 21&ndash;36) are almost as likely as people age 68 and older to describe their <a href="https://www.ubs.com/us/en/wealth/news/wealth-management-americas-news.html/en/2014/01/27/ubs-investor-watch-report-reveals-millennials.html">risk tolerance as <em>conservative</em></a>. And they're putting their money where their cautious mouths are. The average Millennial investor has more than half his or her portfolio in cash!</p> <p>The problem is, when you're young, one of the riskiest things you can do with your investments is to play it too safe.</p> <p>That's because, over time, inflation eats away at your buying power. Even in today's low-inflation environment, the cost of living is growing faster than money in bank savings accounts. You simply need to earn a better rate of return, and that means being willing to accept more risk.</p> <p>If you're young and feeling hesitant about investing, here are two factors that may be holding you back, along with some suggested solutions.</p> <h2>Lose Your Fear of Losing Money</h2> <p>In 2008, the U.S. stock market tanked by 37%. Imagine having $100,000 invested at the start of that year and ending up with a mere $63,000.</p> <p>Whether you were just a kid at the time or a young worker, that's a frightening bit of market history. But keep this in mind: Since bottoming out in March of 2009, the market came roaring back, nearly tripling in value by the end of 2015.</p> <p>The best way to overcome a fear of investing is to set your expectations by gaining some understanding about the market. Long-term, the stock market has outperformed bonds, real estate, gold, and cash. However, what many people fail to take into account is how bumpy the ride can be at times.</p> <p>To be successful as an investor, you have to expect some ups and downs. If you're a Millennial, you have time to ride out the ebb and flow of bull markets and bear markets. So you can afford to invest aggressively. What you may need to develop is the stomach to handle the ride.</p> <p>Knowing a little stock market history, and expecting some downturns along the way, will help you accept an <a href="http://www.wisebread.com/2-investing-concepts-everyone-should-know">age-appropriate level of risk</a> in your portfolio (if you're young, think mostly equities), and then stay invested no matter what's happening in the market.</p> <h2>Develop Your Sense of Urgency</h2> <p>It's easy to think, &quot;I'm young. I can afford to wait a while before I start investing. Right now, I have other priorities, like making my student loan payments.&quot;</p> <p>But there's a high price to be paid for waiting. Consider this. If you invested $200 a month for 40 years, that would amount to $96,000. And if you earned a very realistic average annual return of 7%, you'd end up with about $525,000. That's what happens when you combine periodic investments with a decent rate of return and then allow time to work its magic through the power of compound interest.</p> <p>But what if you waited 10 years? Investing $200 a month for <em>30 </em>years would amount to $72,000. However, because of this late start, you'd end up with less than $245,000.</p> <p>Wow. You only invested $24,000 fewer dollars, but you ended up with nearly a whopping $300,000 less!</p> <p>That should motivate you to find the money to invest now. Keep your housing costs reasonable. See if you can get by without a car or, if you're a two-car family, consider becoming a one-car family. Freeing up a couple of hundred dollars a month could make hundreds of thousands of dollars of difference long-term.</p> <p>If your employer provides a match for some of the money you put into its 401K plan, that's the easiest money you'll ever make. You have to take full advantage of that. So, at the very least, invest enough to get the full match.</p> <p>Remember, if you're a Millennial or younger, you have an asset many older people wish they had. You have time. Make the most of it by getting started as a stock market investor as soon as you can.</p> <p><em>What's holding you back from investing?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/are-you-making-the-biggest-investment-risk-of-all">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt">7 Money Moves to Make as Soon as You Conquer Debt</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-steps-to-starting-a-retirement-plan-in-your-30s">8 Steps to Starting a Retirement Plan in Your 30s</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-pay-down-debt-first-or-invest">Should You Pay Down Debt First or Invest?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/youre-wasting-up-to-42532-by-not-investing-your-gasoline-savings">You&#039;re Wasting Up to $42,532 by Not Investing Your Gasoline Savings</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-choosing-the-right-fund-for-your-portfolio">Are You Choosing the Right Fund for Your Portfolio?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment 401k compound interest conservative millennials risk tolerance stock market Tue, 14 Jun 2016 09:00:06 +0000 Matt Bell 1730337 at http://www.wisebread.com What Are Hedge Funds, Anyway? http://www.wisebread.com/what-are-hedge-funds-anyway <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-are-hedge-funds-anyway" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_investing_79064077.jpg" alt="Man learning what hedge funds are" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Few of us have the savvy &mdash; or the scratch &mdash; to invest in hedge funds, but they are still key players in the world of investing. So, what are they, and why do they matter?</p> <p>Here's the long and short of it: A hedge fund is a limited partnership of investors that uses advanced (often risky) methods, such as investing with borrowed money, in an attempt to realize large gains. They matter because they are a <a href="https://www.preqin.com/docs/samples/2016-Preqin-Global-Hedge-Fund-Report-Sample-Pages.pdf?rnd=1">$3.2 trillion dollar industry</a>. Anything that huge has the potential to make big waves in the global economy &mdash; for better or for worse.</p> <h2>Less Gamble, More Skill</h2> <p>Most hedge funds are, by design, limited partnerships. The hedge fund management group functions as the general partner, while third party investors, such as uber-wealthy individuals and banks and institutional investors, serve as limited partners.</p> <p>It shakes out like this: The hedge fund management group invests the limited partner's pooled monies using a variety of clever tactics aimed at realizing big returns. Rather than solely relying on the movement of the stock market, however, profits are made due to the manager's skill.</p> <p>The hedge fund was born out of the desire of large investment companies to mitigate market risks through exposure to alternative assets. For example, if the market were to take a dramatic plunge, hedge funds could minimize their losses by investing in assets that perform well in such an economic rut.</p> <p>Hedge fund managers use a <a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000" target="_blank">diverse set of investment vehicles</a>, including investments in debt, stocks, bonds, commodities, and complex derivatives. Some hedge funds buy up shares in businesses, invest in crude oil, spend on collectables such as valuable art, or flip real estate. Sometimes a manager bets on these things, while at other times he or she might bet against them. In all cases, these investments are bought and sold to maximize returns.</p> <p>Notably, most people don't qualify to invest in a hedge fund. Only those individuals who have an annual income above $200,000 or a net worth that tops $1 million, excluding a primary residence, can join as a limited partner. Many folks who meet these thresholds, however, might balk at the fees. Hedge funds typically charge limited partners about 20% of all gains and about 2% of assets.</p> <h2>Hedge Funds Are Big Business</h2> <p>Originally, hedge funds were almost exclusively the province of the uber-wealthy, but institutional investors have also been increasingly using hedge funds in the last 15 years. Many public pension funds, banks, endowments, and trusts now invest in hedge funds. The industry is ballooning, growing by more than $70 billion in 2015.</p> <p>A whopping 60% of all hedge fund managers are based in North America, where New York City and Connecticut lead the way. Europe has 19% of the world's hedge fund managers, with the majority located in the UK. Asia-Pacific hedge fund managers constitute 17% of all firms within the industry, with major hubs in Hong Kong, Singapore, and Australia.</p> <p>All this is to say that the hedge fund industry is big, it's global, and it has the potential to make investors huge gains in a short amount of time. Interestingly, the act of &quot;hedging,&quot; which lends the industry its name, refers the minimization of risk. However, the aim of just about any hedge fund is to maximize returns on investment. And that usually requires relatively risky investment strategies.</p> <h2>Hedge Funds Today</h2> <p>Last year turned out to be a tough year for hedge funds, despite the fact that the industry made gains during the first five months of 2015. That winning streak was sharply reversed by four months of losses from June to September, the longest losing streak for hedge funds since 2008. Some of the best-known names in the industry lost their investors <a href="http://www.nytimes.com/2015/12/29/business/dealbook/hedge-funds-struggle-with-steep-losses-and-high-expectations.html?version=meter+at+1&amp;module=meter-Links&amp;pgtype=article&amp;contentId=&amp;mediaId=&amp;referrer=https%3A%2F%2Fwww.google.com%2F&amp;priority=true&amp;action=click&amp;contentCollection=meter-links-click">billions of dollars</a>. Global events including declining oil prices, the collapse of commodity prices, and the Greek debt crisis are partially to blame.</p> <p>Despite the industry's lackluster performance of late, the top hedge fund managers continue to take home billions of dollars. The 25 top-paid hedge fund managers <a href="http://www.institutionalinvestorsalpha.com/HedgeFundRichList.html?version=meter+at+1&amp;module=meter-Links&amp;pgtype=article&amp;contentId=&amp;mediaId=&amp;referrer=https%3A%2F%2Fwww.google.com%2F&amp;priority=true&amp;action=click&amp;contentCollection=meter-links-click">earned a collective $13 billion</a> in income last year, according to an annual ranking. Some of these top earners actually lost money for investors, but still personally profited.</p> <p>Also notable is that David Tepper, the hedge fund billionaire behind Institutional Investor's Alpha, put the <a href="http://www.nytimes.com/2016/05/01/business/one-top-taxpayer-moved-and-new-jersey-shuddered.html">entire New Jersey state budget</a> in peril this year when he moved out of the state to Florida, taking his hedge fund headquarters with him. Tax experts say his relocation could cost New Jersey hundreds of millions of dollars in lost payments.</p> <p>It's just another example of how this powerful industry can affect all of us.</p> <p><em>Anything we've missed? What are hedge funds, anyway?</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/what-are-hedge-funds-anyway">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/10-stocks-every-recent-grad-should-own">10 Stocks Every Recent Grad Should Own</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-ways-to-invest-50-500-or-5000">The Best Ways to Invest $50, $500, or $5000</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/self-made-billionaires-investment-lessons-from-their-success">Self-Made Billionaires: Investment Lessons From Their Success</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt">7 Money Moves to Make as Soon as You Conquer Debt</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-only-8-rules-of-investing-you-need-to-know">The Only 8 Rules of Investing You Need to Know</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment billionaires gains global economy hedge funds profits Mon, 13 Jun 2016 09:30:18 +0000 Brittany Lyte 1728608 at http://www.wisebread.com 7 Investments That Usually Soar During the Summer http://www.wisebread.com/7-investments-that-usually-soar-during-the-summer <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-investments-that-usually-soar-during-the-summer" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_carousel_000036168672.jpg" alt="Couple finding investments that soar during summer" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It's often said that investors should &quot;sell in May and go away,&quot; but that doesn't mean you can't make money in summertime. There are plenty of sectors and industries that do well in the warm months and can generate solid returns.</p> <p>Let's take a look at the investments that will keep your portfolio growing even while you're basking on the beach.</p> <h2>1. Theme Park Stocks</h2> <p>Gas prices are still low, so that means people will drive places this summer. And they'll head to parks owned by companies like Cedar Fair [<a href="http://finance.yahoo.com/q?s=FUN">NYSE: FUN</a>], Six Flags [<a href="http://finance.yahoo.com/q?s=SIX">NYSE: SIX</a>], and Disney [<a href="http://finance.yahoo.com/q?s=DIS">NYSE: DIS</a>]. All three of these companies hit their 52-week highs between May and August last year, and shares have been creeping up again in recent weeks. A strong summer for these properties could mean good growth for their share prices.</p> <h2>2. Airlines</h2> <p>People travel during the summer, so it's make or break time for most airlines. And there's some evidence suggesting that airline stocks do well between June and September. The Dow Jones U.S. Airlines Index rose 5% last summer, 2% in 2014, and 15% in 2013. The airline industry has gotten through much of the turbulence of years past, and the low cost of fuel now means there are some solid stocks including Southwest [<a href="http://finance.yahoo.com/q?s=LUV">NYSE: LUV</a>] and Delta Airlines [<a href="http://finance.yahoo.com/q?s=DAL">NYSE: DAL</a>].</p> <h2>3. Athletic Apparel</h2> <p>If people are getting outside, they're spending money on workout clothes and shoes. Last year, shares of Under Armour [<a href="http://finance.yahoo.com/q?s=UA">NYSE: UA</a>] rose nearly 8% during the summer months, while Nike shares rose 20%. Other sportswear companies including Columbia, VF, and Foot Locker had very good summers.</p> <h2>4. Food and Beverage Stocks</h2> <p>The S&amp;P 500 Food and Beverage Select Industry Index has seen gains in three of the last four years. Consider Coca-Cola, which saw shares rise more than 20% between June and September last year. Monster Beverage has had consistent gains during the summer, including a 24% increase in share value during the summer of 2014.</p> <h2>5. Biotechnology</h2> <p>It's one of the market's more volatile sectors, but it has historically done quite well in the summer. The NASDAQ Biotechnology Index rose about 8% between June and September in 2014, a whopping 25% in 2013, and more than 12% in 2012. The index did drop during the summer of 2015, but that was just the third summer decline since 2005. You can invest in a broad array of biotech firms by investing in the SPDR Biotech Select Index ETF [<a href="http://finance.yahoo.com/q?s=XBI">NYSE: XBI</a>] or a healthcare fund such as Vanguard's Health Care Index Fund [<a href="http://finance.yahoo.com/q?s=VHCIX">NYSE: VHCIX</a>]. Individual stocks worth a look include Gilead Sciences [<a href="http://www.nasdaq.com/symbol/gild">NASDAQ: GILD</a>] and Amgen [<a href="http://finance.yahoo.com/q?s=AMGN">NASDAQ: AMGN</a>].</p> <h2>6. Technology</h2> <p>Plain old technology stocks don't take a break in summer. Facebook [<a href="http://www.nasdaq.com/symbol/fb">NASDAQ: FB</a>] went up 11% last summer and 15% during the same period in 2014. Amazon [<a href="http://www.nasdaq.com/symbol/amzn">NASDAQ: AMZN</a>] saw shares go up 24% in the summer of 2015. Online auction company eBay has also been a solid summer performer, once outperforming the S&amp;P 500 for five straight years.</p> <h2>7. Real Estate</h2> <p>No one goes house hunting when it's cold outside. But when the weather's nice, the buyers come out. And that's when <a href="http://www.wisebread.com/the-only-5-rules-you-need-to-know-about-investing-in-real-estate" target="_blank">home prices increase</a> due to increased competition. A chart of median home prices by month almost always looks like a roller coaster, with prices rising in June and then falling back down in the fall and winter. So if you own property now, the summertime is a good time to sell.</p> <p><em>Any summer month stock winners we've missed? Let us know in comments!</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-investments-that-usually-soar-during-the-summer">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-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-2 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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/tesla-six-flags-and-9-other-adventure-stocks-worth-investing-in">Tesla, Six Flags and 9 Other Adventure Stocks Worth Investing In</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-only-8-rules-of-investing-you-need-to-know">The Only 8 Rules of Investing You Need to Know</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <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> </ul> </div> </div> </div> </div><br/></br> Investment airlines biotech real estate stocks summer theme parks Thu, 02 Jun 2016 10:00:08 +0000 Tim Lemke 1721736 at http://www.wisebread.com The Only 5 Rules You Need to Know About Investing in Real Estate http://www.wisebread.com/the-only-5-rules-you-need-to-know-about-investing-in-real-estate <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-only-5-rules-you-need-to-know-about-investing-in-real-estate" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/000074853063.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The numbers are impressive: The median existing home price for homes across the United States stood at $232,500 in April, according to the National Association of Realtors. That's up 6.3% from the same month one year earlier, and marks the 50th consecutive month in which median housing prices have increased from one year to the next.</p> <p>This steady rate of appreciation might inspire you to invest in residential real estate. After all, the performance of the housing market during the last four years has been far steadier than that of the stock market. But be careful: Sure, investing in real estate can be profitable &mdash; but it can also be risky. Investors who don't do their homework before sinking their dollars into homes could lose a bundle of money.</p> <p>Here are five rules you must know before <a href="http://www.wisebread.com/real-estate-investing-is-cheaper-and-easier-than-you-think" target="_blank">investing in real estate</a>.</p> <h2>1. Don't Let Your Emotions Betray You</h2> <p>Jamal Asskoumi, owner of the online real estate agency CastleSmart, says that too many inexperienced investors make the mistake of falling in love with a property for the way it looks. They then invest in it without running the numbers to make sure that the home has real potential to increase in value enough to make it a sound investment.</p> <p>Falling in love with a property can also cause investors to spend too much on it upfront, making it nearly impossible for them to make a profit after their purchase.</p> <p>&quot;Unlike stocks that are numbers on a screen, property must be liked and appreciated before it can be invested in, and this is the downfall of many investors,&quot; Asskoumi said. &quot;When visiting a property, investors sometimes become attached and feel as though they have to have it, regardless of the price. They end up paying more than what is necessary and lose on the investment.&quot;</p> <h2>2. Have Enough Money to Cover Both Known and Unknown Losses</h2> <p>Investing in real estate isn't cheap. You are buying a home, after all. But the real trouble spot for investors are the unexpected costs: If you rent out your investment, you never know what damage your tenants might cause. Fixing that damage could cost thousands of dollars.</p> <p>You also have to be prepared for possible losses. Housing values can go down as well as up. You need the financial cushion to handle these fluctuations, said Rocky Lalvani, a financial coach and founder of the Richer Soul financial blog.</p> <p>You also need the money to cover possible monthly losses until your property does appreciate enough in value for you to sell it and earn a big profit. Maybe your mortgage on the property you bought is $2,000 a month but you can only rent the home for $1,800 a month. You'll essentially be losing $200 a month while you wait for your investment to appreciate.</p> <p>&quot;Be prepared for losses; it's a cost of business,&quot; Lalvani said. &quot;Real estate may lose money in the short term while your asset is building over the long term.&quot;</p> <h2>3. Don't Rent to Just Anyone</h2> <p>Finding good tenants is one of the biggest challenges in investing in real estate. The wrong tenants could damage your property, stop paying their monthly rent, and force you to evict them, a process that is long and costly.</p> <p>That's why it's so important to do your research before renting out your home. Run the credit of potential tenants to determine if they've struggled to pay their bills before. Run criminal background checks, too, on potential tenants.</p> <p>Above all, never simply buy into the promises that potential tenants make to you.</p> <p>&quot;Tenants will literally lie about anything and everything,&quot; said Eric Bowlin, a real estate investor and founder of the real estate investing blog EricBowlin.com. &quot;Assume everyone has no job, no income, and a long eviction record, until otherwise proven.&quot;</p> <h2>4. Invest in the Right Neighborhood</h2> <p>You want to invest in an area in which homes are most likely to increase in value. Unfortunately, there is no guarantee that any home, even if located in a desirable neighborhood, will be worth more 10 years from now than it is today.</p> <p>But investing in the right neighborhood can at least increase the odds.</p> <p>Study what homes are selling for in any neighborhood in which you want to invest. Study, too, the average monthly rents that homes and apartments in a neighborhood fetch.</p> <p>A neighborhood that is dotted with new restaurants and shops might be a good investment. So might be one that is gaining the reputation as being an up-and-coming area. Be careful, though: It's easy to spend too much upfront in these hotter neighborhoods.</p> <p>Paul Ullman, founder and chief investment officer of Asset Based Lending in Hoboken, New Jersey, says that the key is to look at the strength of nearby schools and to target areas that have positive job growth. It helps, too, to know the neighborhood in which you are going to invest.</p> <p>&quot;Ideally, invest close to home, at least initially,&quot; Ullman said.</p> <h2>5. Know Your Limits</h2> <p>Before investing in real estate, be honest about what you can and can't do. If you're not particularly handy, you might not be able to repair that leaking dishwasher on your own, for instance, and might need a plumber to resolve the problem. That will add to the costs of your real estate investment.</p> <p>You might also want to avoid 2:00 a.m. calls from tenants complaining that the heat in their apartment isn't working. To avoid these calls, you can hire a professional property management company to take over the daily operations of your real estate investment. Hiring such a company, though, costs money, and will eat into your profits.</p> <p>&quot;I always tell people who are interested in getting into investment real estate to consider how comfortable they are with doing any kind of repairs or construction to a house or rental property,&quot; said Todd Barton with the Atlanta office of Renters Warehouse. &quot;You'll have to budget in the costs of contractors or professional property managers. Be honest with yourself upfront so that you don't get into a situation where you are overwhelmed with projects and mounting debts.&quot;</p> <p><em>Have you taken the plunge and invested in real estate? What other rules should new investors stick to?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/the-only-5-rules-you-need-to-know-about-investing-in-real-estate">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/20-tips-for-getting-your-security-deposit-back">20 Tips for Getting Your Security Deposit Back</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/dont-worry-about-missing-the-bottom-in-houses">Don&#039;t worry about missing the bottom in houses</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/so-you-want-to-be-a-landlord-part-i">So You Want to be a Landlord? Part I</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/should-you-sell-your-home-to-pay-down-debt">Should You Sell Your Home to Pay Down Debt?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-dumb-ways-to-scare-off-potential-homebuyers">10 Dumb Ways to Scare Off Potential Homebuyers</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Real Estate and Housing appreciation housing market landlord neighborhoods property management renting residential real estate risks tenants Thu, 26 May 2016 09:30:22 +0000 Dan Rafter 1717920 at http://www.wisebread.com Invest Your Rewards With the Fidelity Rewards Visa Signature Card http://www.wisebread.com/fidelity-rewards-credit-card-review <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/fidelity-rewards-credit-card-review" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/saving-for-iStock_000009334078Small.jpg" alt="savings piggy bank" title="savings piggy bank" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>When it comes to cash rewards, your options are usually credit cards that award specific types of purchases like <a href="http://www.wisebread.com/5-best-gas-rewards-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=review">gas</a> or <a href="http://www.wisebread.com/5-best-credit-cards-for-travel-purchases?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=review">travel</a>, or those that award a lower flat-rate of 1% or 1.5% cash back. The<a href="http://ct.wisebread.com/click.php?pg=208&amp;pid=124&amp;pp=0&amp;uv=sname&amp;fot=1351"> Fidelity&reg; Rewards Visa Signature&reg; Card</a>, however, awards one of the <a href="http://www.wisebread.com/best-credit-cards-that-offer-flat-rate-rewards-for-all-spending?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=review">highest flat-rate cash back</a> among any rewards credit card, without the burden of special spending categories. Further, if you need a little help making sure you save for your retirement or your child&rsquo;s college education, using this card can help you build those accounts. If you&rsquo;re looking for a strong <a href="http://www.wisebread.com/5-best-cash-back-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=review">cash back rewards credit card</a> that offers an opportunity for saving and investing your rewards, this card is worth considering.</p> <h2>Why We Like This Card</h2> <ul> <li>2% cash back on all purchases</li> <li>Invest rewards in multiple accounts</li> </ul> <h2>How This Card Works</h2> <p>This card awards 2 points for every dollar. There is no limit to the number of points you can earn, and points do not expire. To receive a deposit you must link your eligible Fidelity account to your card. You can deposit your points into one account or divide them among several, up to five eligible accounts including a brokerage account, Fidelity Cash Manage Account, Fidelity-managed 529 College Savings plan, and retirement accounts. There is no annual fee for this card.</p> <h2>Other Benefits</h2> <p><strong>Easily invest your rewards</strong>. For many consumers, saving and planning for the future can be difficult and is often forgotten about. This card allows you to invest the rewards you earn from your purchases into different investment accounts, including retirement accounts and college savings accounts, quickly and easily.</p> <p><strong>Mobile purchases</strong>. This card is Digital Wallet-enabled for Apply Pay, Samsung Pay, and Android Pay, making it easier to use your card with your mobile phone.</p> <p><strong>Visa Signature Benefits</strong>. Enjoy all the benefits Visa Signature cards offer, including concierge and specific offers.</p> <h2>Costs</h2> <ul> <li>$0 Annual Fee</li> <li>14.24% variable APR for purchases and balance transfers</li> <li>3% Balance Transfer Fee (minimum $5)</li> <li>1% Foreign Transaction Fee</li> </ul> <p><a rel="nofollow" href=" http://ct.wisebread.com/click.php?pg=208&amp;pid=124&amp;pp=0&amp;uv=sbutton2&amp;fot=1351" target="_blank"><img width="154" height="50" class="img-exempt" alt="" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/apply-now.png" /></a></p> <h2>Considerations</h2> <p><strong>No sign-up bonus or intro APR offer</strong>. Most rewards credit cards offer new cardholders a <a href="http://www.wisebread.com/5-best-sign-up-bonuses-for-airline-miles-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=review">sign-up bonus</a> if you meet a certain spending requirement when you first open the account. If not, there is often a <a href="http://www.wisebread.com/5-best-credit-cards-with-0-apr-for-purchases?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=review">0% introductory APR on purchases</a> and balance transfers that can help new cardholders save money on interest payments. This card, however, does not offer either type of promotion for new cardholders. If you plan to make a large purchase right away, you can earn a bonus worth hundreds with cards that offer sign-up bonuses and possibly avoid paying interest for a limited time. (See also: <a href="http://www.wisebread.com/5-best-credit-cards-that-offer-bonus-cash-for-sign-up?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=5x">Best Credit Cards that Offer Sign-Up Cash Bonuses</a>)</p> <p><strong>Limited redemption opportunities</strong>. Although the rewards program is a great way to save and plan for the future, it doesn&rsquo;t provide other ways to redeem your points. If you prefer to redeem rewards for cash, gift cards, or merchandise, without first depositing them into a Fidelity account, you might be better off with a card that offers more options for redemption. (See also: <a href="http://www.wisebread.com/5-best-cash-back-credit-cards?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=5x">5 Best Credit Cards for Cash Back</a>)</p> <p><strong>Foreign transaction fee</strong>. Although it is one of the lowest foreign transaction fees, if you frequently travel abroad or make foreign purchases with the card, the 1% will add up. For foreign transactions, it&rsquo;s best to use a card that has no foreign transaction fee at all. (See also: <a href="http://www.wisebread.com/smarter-security-and-no-foreign-transaction-fees-the-best-credit-cards-to-use-while-on-vacation?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=review">Credit Cards with No Foreign Transaction Fees</a>)</p> <h2>Competitors</h2> <p><strong>Citi&reg; Double Cash Card - 18 month BT offer:</strong>&nbsp;The <a href="http://www.wisebread.com/citi-double-cash-rewards-card-pays-you-to-pay-off-your-debt-or-does-it?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=review">Double Cash Card</a> from our partner Citi offers 1% cash back when you make a purchase, and 1% cash back when you pay off those purchases. This card offers similar rewards to the Fidelity Rewards card but allows redemption via direct deposit, statement balance, or check. There is no annual fee.</p> <p><strong>Capital One&reg; Quicksilver&reg; Cash Rewards Credit Card</strong>: The <a href="http://www.wisebread.com/unlimited-cash-back-the-quicksilver-cash-rewards-credit-card?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=review">Quicksilver Cash Rewards</a> card offers unlimited 1.5% cash back. Rewards don't expire and there is no minimum redemption amount. In addition, there are no foreign transaction fees. Finally, get $100 cash after you spend $500 on purchases within the first 3 months of account opening.</p> <h2>Who This Card Is Best For</h2> <p>This card is best for Fidelity account holders who want an easy way to contribute to their investment accounts. It provides an attractive cash back rate and the rewards structure is simple and straightforward.&nbsp;</p> <p style="text-align: center;"><strong><a href="http://ct.wisebread.com/click.php?pg=208&amp;pid=124&amp;pp=0&amp;uv=send&amp;fot=1351">Click here to learn more and apply for the Fidelity&reg; Rewards Visa Signature&reg; Card today!</a></strong></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/christina-majaski">Christina Majaski</a> of <a href="http://www.wisebread.com/fidelity-rewards-credit-card-review">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-secured-credit-cards">The 5 Best Secured Credit Cards</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-credit-cards-for-people-with-fairaverage-credit">The 5 Best Credit Cards for People With Fair/Average Credit</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/3-ways-technology-makes-personal-finances-easier">3 Ways Technology Makes Personal Finances Easier</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/nfl-extra-points-credit-card-review">NFL Extra Points Card: Fumble or Touchdown?</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/tips-for-increasing-your-financial-literacy">Tips for Increasing Your Financial Literacy</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards Investment credit card review Fidelity Wed, 25 May 2016 21:41:11 +0000 Christina Majaski 969941 at http://www.wisebread.com A Simple Guide to Socially Responsible Investing http://www.wisebread.com/a-simple-guide-to-socially-responsible-investing <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/a-simple-guide-to-socially-responsible-investing" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/piggy_bank_terrarium_000085064581.jpg" alt="Learning the simple guide to socially responsible investing" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You may have heard that Stanford, Harvard, and other universities have divested certain stocks from their endowments, such as coal and oil companies. The idea is to make an anti-climate-change statement and deprive such industries of capital.</p> <p>Increasingly, individuals are also realizing that their investments aren't just a way to <a href="http://www.wisebread.com/one-smart-thing-you-can-do-for-your-retirement-today" target="_blank">save for retirement</a> &mdash; but a way to boost companies we like, and withhold support from companies we don't.</p> <p>But can you afford to think about the social impact of your investments? Before you decide whether socially responsible investing is for you, learn what it's about.</p> <h2>It's Not New</h2> <p>Socially responsible investing, also referred to as &quot;green investing,&quot; &quot;sustainable, responsible, and impact investing,&quot; or just plain &quot;sustainable investing,&quot; was around long before we had these names for it. As far back as 1700s, some American churches urged their parishioners not to invest in <a href="http://sustainability.thomsonreuters.com/2013/08/09/history-of-socially-responsible-investing-in-the-u-s/">slavery, alcohol, or war</a>. During the Vietnam War, thousands divested from Dow Chemical after seeing a <a href="http://www.theguardian.com/us-news/2015/oct/26/vietnam-wars-napalm-girl-kim-phuc-has-laser-treatment-to-heal-wounds">horrifying image</a> of a Vietnamese child being burned by napalm. In the 1980s, investor pressure was a major force in ending South African apartheid.</p> <h2>It's Growing</h2> <p>Since the 1980s, socially responsible investing has become a greater part of mainstream investing, with mutual funds, index funds, and other vehicles available to the average investor. From 2012 to 2014, the number of assets managed using these strategies <a href="http://www.ussif.org/Files/Publications/SIF_Trends_14.F.ES.pdf">increased by 75% to $6.57 trillion</a>, according to The Forum for Sustainable and Responsible Investment. That's about a buck out of every $6 invested in the United States.</p> <h2>It Screens Out Companies Based on Set Principles</h2> <p>An SRI fund manager doesn't simply decide what constitutes a &quot;good&quot; company based on their personal values. Based on a few main categories &mdash; such as environmental impact, social behavior, corporate governance, and the type of product or service offered &mdash; managers screen out companies that don't measure up to predetermined standards.</p> <p>For instance, the <a href="https://www.tiaa.org/public/pdf/ffs/87244W300.pdf">TIAA-CREF Social Choice Equity Fund</a> favors &quot;companies that are strong stewards of the environment; devoted to serving local communities; committed to higher labor standards; dedicated to producing high-quality and safe products; and those managed in an exemplary or ethical manner.&quot; The <a href="http://trilliummutualfunds.com/mutual-funds/portfolio21-global-equity-fund/">Portfolio 21 Global Equity Fund</a> &quot;excludes companies directly engaged in fossil fuel exploration and production, weapons manufacturing, egregious labor practices,&quot; and other behaviors.</p> <h2>SRI Doesn't Mean Sacrificing Returns</h2> <p>&quot;You do not have to assume you are making a financial sacrifice if you use mutual funds that do socially responsible investing screening,&quot; said J. Patrick Costello, founder of Green River Financial Services.</p> <p>Socially responsible funds apply similar strategies to those of mainstream funds, with the same goal of maximizing returns. The only difference is that the SRI funds are picking their winners out of a pre-screened pool of companies they consider to be more responsible than the rest.</p> <p>&quot;Sustainable investing does not attempt to select just a few obscure companies that get a perfect record. We just try to narrow the group of companies, exclude the companies with the worst behaviors, and emphasize the companies with the better behaviors, within realistic bounds,&quot; Costello said.</p> <p>In fact, there is evidence that some socially responsible moves, such as including more women in the corporate ranks, make for better returns, Costello said.</p> <h2>You Probably Don't Need to Change Investment Providers to Try It</h2> <p>If your retirement fund is with Vanguard, TIAA-CREF, or another large investment firm, they probably have one or more socially responsible funds to choose from.</p> <h2>It May Not Be for You</h2> <p>Despite the win-win appeal of doing good without giving up financial returns, not every investor buys into the promise of socially responsible investing. One problem with such funds is that the definition of socially responsible can vary, and any fund available may well include some companies that you personally find objectionable. For example, some funds <a href="http://time.com/money/3951822/socially-responsible-investing-mutual-funds-problem/">include McDonald's</a>, a company whose labor practices and history of pushing high-calorie, low-nutrient foods on children turn many socially conscious folks off.</p> <p>If you choose to pursue socially responsible investing, you still have to do the standard due diligence that you would do before investing in any fund. Ultimately, the decision of how and where to invest remains yours alone.</p> <p><em>Are you a socially responsible investor? How do you choose your investments?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carrie-kirby">Carrie Kirby</a> of <a href="http://www.wisebread.com/a-simple-guide-to-socially-responsible-investing">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/socially-responsible-investing-goes-green">Socially Responsible Investing Goes Green</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/investing-with-your-values">Investing With Your Values</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/15-investing-tips-from-a-1-wall-street-stock-picker">15 Investing Tips From A #1 Wall Street Stock Picker</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt">7 Money Moves to Make as Soon as You Conquer Debt</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-you-choosing-the-right-fund-for-your-portfolio">Are You Choosing the Right Fund for Your Portfolio?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment climate change environmental impact personal values social impact socially responsible investing SRI Wed, 25 May 2016 09:30:26 +0000 Carrie Kirby 1717159 at http://www.wisebread.com The Only 8 Rules of Investing You Need to Know http://www.wisebread.com/the-only-8-rules-of-investing-you-need-to-know <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-only-8-rules-of-investing-you-need-to-know" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/money_tree_change_000067145743.jpg" alt="Learning the only rules of investing you need to know" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Investing may seem complicated. But it really isn't once you realize that most of what you need to know can fit on a fairly small list.</p> <p>No matter what your investing goal, you can make money just by following some simple rules. Here are eight rules that will get you on the path to investing success.</p> <h2>1. Invest as Much as You Can</h2> <p>It's very simple. The more you invest, the more you end up with over time. The stock market's S&amp;P 500, which tracks the performance of the largest American companies, <a href="http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html">averaged a 7.25% annual return</a> between 2006 and 2015, according to figures tracked by New York University's Stern School of Business. And it's averaged more than 9% annually since 1928. You won't get better returns on your money <em>anywhere </em>else. Even small increases in your investment contributions can make a big difference. A $5,000 annual investment would turn into $74,000 in 10 years, based on a 7% return. A $6,000 annual investment would be worth $88,000. A $7,000 investment would become $103,000.</p> <h2>2. Start Early</h2> <p>One of the most important things to know about investing is that the earlier you start, the more you'll end up with in the long run. There are many people who don't start investing for retirement until very late in life, and they end up with a far smaller nest egg than they first imagined. That's because they were unable to take advantage of the phenomenon of compounded returns. Let's say that you begin saving for retirement at age 40, putting aside $1,500 monthly. Assuming a 7% annual return, by age 60, you'll have about $789,000. But if you started at age 30, you'd end up with $1.8 million after the same period. Start at age 20, and it's a very comfortable $3.84 million.</p> <h2>3. Look Long Term</h2> <p>The stock market is volatile by nature, but as we indicated above, it generally trends upward over time. If you invest with a short time horizon of less than three years, you may not make any money at all. In fact, you might lose quite a bit. But if you extend your horizon to 10, 20, or 40 years into the future, you'll enjoy solid gains on an average annual basis <em>and</em> see the volatility smooth out.</p> <h2>4. Invest in Similar Amounts Frequently Rather Than in a Lump Sum</h2> <p>You may think you have a good sense of precisely when the markets will go up and when they'll go down. But chances are, you're guessing just like everyone else. &quot;Timing the market&quot; is not something the average investor can successfully do on a regular basis. It makes much more sense to invest a set dollar amount during regular periods, usually monthly or quarterly. This is called &quot;dollar cost averaging,&quot; and it works for investors because you end up buying more shares when prices are low and fewer shares when prices are high.</p> <h2>5. Use Tax-Advantaged Accounts, and Max Them Out</h2> <p>If you're focused on retirement &mdash; and you should be &mdash; there are great advantages to opening 401K and individual retirement accounts, due to tax laws that encourage people to save and invest. With 401K plans offered by your employer, any contributions you make are deducted from your taxable income. With a Roth IRA, your investments grow and you pay no capital gains tax when you withdraw your money when you retire.</p> <p>A 401K lets you deposit up to $17,500 annually. A Roth IRA allows up to $5,500 in annual contributions. If you can max these out, you'll be in great shape.</p> <p>There are other tax-advantaged vehicles, including 529 college savings plans and Coverdell accounts, which allow you to invest money without giving as much to the Internal Revenue Service. In some cases, money can grow tax free and you get a tax credit on top of that. Use these accounts, and your overall investment returns will be higher.</p> <h2>6. Be Aggressive When You're Young, More Conservative When Older</h2> <p>There's no exact consensus on the ideal investment mix, but most financial advisors suggest investing in nearly all stocks and index funds when you're young, because you're a long way from retirement and can make up and money you lose during down years. As you get closer to retirement, gradually shift your portfolio to include less volatile investments like cash and bonds.</p> <h2>7. Focus on Index Funds, Not Individual Stocks</h2> <p>It's fun to own shares of individual companies, and buying a few shares of a company you like is a good way to get started in investing. But trying to <a href="http://www.wisebread.com/stabilize-your-portfolio-with-these-11-dividend-stocks" target="_blank">build a balanced portfolio</a> of companies is very hard, and there's very little evidence that human beings are capable of &quot;beating the market&quot; on a regular basis. That's why for most investors, it's sensible to invest in mutual funds or exchange traded funds that mirror the performance of the overall stock market. This is called &quot;indexing,&quot; and it's a surefire way to make money over time without the volatility of owning individual company shares.</p> <h2>8. Pay Attention to Fees and Commissions</h2> <p>When investing in mutual funds or exchange traded funds, take a hard look a something called an &quot;expense ratio.&quot; That's the amount of money that the mutual fund company takes before you even see a dime in returns. These expenses range from well above 1% to a minuscule .05% by some brokerage houses. One percent may not seem like much, but it can definitely cut into your returns and cost you thousands of dollars over time. Mutual funds that are actively managed, rather than those that simply track an index, generally have higher expense ratios.</p> <p>Keep in mind also that there may be fees every time you buy and sell. Discount brokerage companies will charge between $6&ndash;$10 for every transaction. That can add up if you do a lot of trading.</p> <p><em>Any rules we've overlooked? Share with us in comments!</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-only-8-rules-of-investing-you-need-to-know">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/7-investment-accounts-all-30-somethings-should-have">7 Investment Accounts All 30-Somethings Should Have</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/is-this-hidden-cost-sapping-your-retirement-savings">Is This Hidden Cost Sapping Your Retirement Savings?</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/best-online-sites-for-building-wealth">Best Online Sites for Building Wealth</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-ways-to-invest-50-500-or-5000">The Best Ways to Invest $50, $500, or $5000</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment investing mutual funds retirement rules stocks Mon, 23 May 2016 10:30:12 +0000 Tim Lemke 1713144 at http://www.wisebread.com 7 Cool Things Bonds Tell You About the Economy http://www.wisebread.com/7-cool-things-bonds-tell-you-about-the-economy <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-cool-things-bonds-tell-you-about-the-economy" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/kid_investing_happy_000065886749.jpg" alt="Learning cool things bonds teach us about the economy" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Bonds are often cast as the boring stepchild of investments, but they can actually offer some great insights into the machinations of our economy. Their yields and interest rates that are affected by overall economic conditions, so you can learn a lot by owning them. And they may even predict how certain aspects of the economy will evolve. (See also:&nbsp;<a href="http://www.wisebread.com/5-crucial-things-you-should-know-about-bonds?ref=seealso" target="_blank">5 Crucial Things You Should Know About Bonds</a>)</p> <p>Here are seven things that bonds can tell us.</p> <h2>1. They Can Tell You If the Economy Is Healthy (or Not)</h2> <p>Some bonds perform well when the overall economy is in good shape. Others perform better when times are tough. High-yield bonds, emerging market bonds, and corporate bonds with low ratings tend to perform best when the economy is strong. But U.S. Treasuries &mdash; which are seen as less risky &mdash; don't perform as well when the economy is doing well.</p> <p>So, if you want to get a general sense of how the national or world economy is doing, pay attention to the types of bonds people are investing in. Generally speaking, a rush to riskier bonds means things are going well. But when times are tough, Treasuries are often the place investors flock to. Here's a <a href="http://bonds.about.com/od/bonds101/a/The-Economy-And-Bonds.htm">helpful chart</a> that shows how different bonds perform in various economic conditions.</p> <h2>2. They Can Predict a Recession</h2> <p>In the 1980s, economists began to realize that they could predict economic activity by looking at something called the bond &quot;yield curve.&quot; In simple terms, this is the difference in the interest rates between three-month and 10-year Treasury notes. If the interest rates on 10-year notes are higher than the shorter-term rates, then the <a href="https://www.clevelandfed.org/our-research/indicators-and-data/yield-curve-and-gdp-growth.aspx">chances of a recession</a> in the next 18 months are not very high, according to information published by the Federal Reserve. When the yield curve is inverted &mdash; meaning long-term interest rates are lower &mdash; then look out. This was the case in 2006, and America was in a recession within two years.</p> <h2>3. They Can Predict If You'll Pay More for Stuff</h2> <p>One of the downsides to investing in Treasury bonds is that they can lose value due to inflation. That's why the government introduced something called Treasury Inflation Protected Securities (TIPS). These are like bonds, in that they have a fixed-rate yield and regular interest payments, but the principal is adjusted according to the Consumer Price Index.</p> <p>Generally speaking, you can determine the possible rate of future inflation by examining the spread between the yield in a bond and a TIPS with a similar maturity date. So for instance, if a three-year Treasury note has a yield of 4% and a three-year TIPS note has a yield of 2%, then the expected rate of inflation over the next two years is 2%. This is not an exact science, however, as there are a multitude of factors that can drive inflation.</p> <h2>4. They Can Tell You If Stock Investors Are Skittish</h2> <p>When investors flock to bonds, it's often because they are feeling less confident about riskier investments, such as stocks. Bonds are popular investments among those close to retirement, but when all investors are drawn to bonds, it could be a sign that the stock market has taken a dive or is underperforming. Conversely, less interest in bonds could be a sign that the stock market is doing well.</p> <h2>5. They Can Tell You If Companies Are Investing in Themselves</h2> <p>Corporate bonds can give you a glimpse of what companies are doing with their money, especially whether they are looking to expand. Even large companies with a lot of cash will issue bonds in order to make big capital improvements, fund an acquisition, or invest in research and development. (Even Apple, which reported $55 billion in cash in the last quarter, also reported $10 billion in bond debt.)</p> <p>Be careful, however, as many companies go into debt simply to stay afloat. Pay attention to the ratings on corporate bonds to get a better understanding of how companies may be using debt. A company with a strong credit rating is more likely to be raising funds for investment or expansion rather than to simply fund operations.</p> <h2>6. They Can Impact What You Might Pay for Your House</h2> <p>The government does not set mortgage rates. Banks do that. But banks will often keep mortgage rates in line with those of long-term Treasury notes. That's because Treasuries and mortgages are offered for similar terms, usually in the 10- to 30-year time frame. So when Treasury notes rise, mortgage rates usually rise, as well.</p> <h2>7. They Can Let You Know if Your City Is in Trouble</h2> <p>Municipal bonds can offer insight into the economies of cities and states. Municipalities will sell bonds in order to raise money for capital projects. The size and quality of these bonds are clues into whether a city is investing properly or has too much debt. Bonds with high interest rates may come from cities with less-than-stellar credit &mdash; a sign of a city that has been struggling. (For an example, take a look at Atlantic City, which is struggling to make debt payments after years of declining tax revenue.) Moreover, bonds will tell you whether a municipality is selling bonds just to fund normal operations, or for investments in things like infrastructure that will benefit the city's financial health over the long term.</p> <p><em>Still bored by bonds?</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-cool-things-bonds-tell-you-about-the-economy">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/while-waiting-for-rates-i-bonds">While Waiting for Rates: I-Bonds</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/laddering-for-higher-more-stable-returns">Laddering for higher, more stable returns</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-ways-bonds-can-hurt-your-portfolio">10 Ways Bonds Can Hurt 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/5-latin-american-markets-to-watch">5 Latin American Markets to Watch</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/a-simple-guide-to-series-i-savings-bonds-i-bonds">A Simple Guide to Series I Savings Bonds (I-Bonds)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment bonds Economy inflation interest rates predictions recessions Thu, 12 May 2016 09:00:05 +0000 Tim Lemke 1705414 at http://www.wisebread.com