Investment http://www.wisebread.com/taxonomy/term/4808/all en-US 5 Things Newlyweds Must Know About Investing http://www.wisebread.com/5-things-newlyweds-must-know-about-investing <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-things-newlyweds-must-know-about-investing" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/married_couple_monopoly_000017059049.jpg" alt="Newlyweds learning things they must know about investing" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>There's a ton of excitement involved in getting married. There's the big day, which you may have been planning for many months, the honeymoon, and setting up your home together.</p> <p>Before long, though, you have to get down to the business of actually <em>running</em> your household, which includes investing for your future. Here are a few investing essentials every newlywed couple should know.</p> <h2>1. Confidence Is Not the Same as Skill</h2> <p>Men and women tend to come at money from very different perspectives, and that's certainly true when it comes to investing. According to a Merrill Lynch study, 55% of women agreed or strongly agreed with this statement: &quot;I know <a href="https://mlaem.fs.ml.com/content/dam/ML/Articles/pdf/ARTRGVP5.pdf">less than the average investor</a> about financial markets and investing in general.&quot; Just 27% of men agreed or strongly agreed with that statement.</p> <p>This difference in investing confidence leads to notable differences in investing behavior. For example, according to a Barclay's study, men are more likely to attempt the impossible: time the market.</p> <p>While men may have more confidence in their investing abilities, some studies have found women to be more successful investors. The Financial Times reported on a study of hedge funds, finding that those managed by women outperformed those managed by men &mdash; by a large margin.</p> <p>The take-away? Choose which spouse will take the lead with investing based on track record, not confidence.</p> <h2>2. You Probably Have Different Comfort Levels With Risk</h2> <p>One of the most important investing decisions has to do with asset allocation &mdash; that is, how much of your portfolio will you invest in stocks, and how much in bonds?</p> <p>That ratio has to do with your investment time frame and risk tolerance. Each of you should take an <a href="https://personal.vanguard.com/us/FundsInvQuestionnaire">investment temperament quiz</a> and then compare results. If the national studies are reflected in your marriage and he is more comfortable with risk than she is, meet in the middle when making asset allocation decisions.</p> <p>Or, you could take your investment temperaments out of the equation by using target-date funds for your investments. Just make sure you understand <a href="https://www.soundmindinvesting.com/articles/view/how-well-do-target-date-funds-perform-in-a-downturn">how target-date funds work</a>.</p> <h2>3. Your Best First Investment May Have Nothing to Do With the Stock Market</h2> <p>I will always remember a couple that approached me during a break in a financial workshop I was leading for engaged and newly married couples. She had tears in her eyes. He looked irritated.</p> <p>Their wedding was coming up and they couldn't agree on where to live. He was about to graduate from law school, assumed he'd land a job at a large firm, and wanted to buy a nice condo in a trendy part of town. Knowing she was about to marry into six figures' worth of debt, she wanted to rent for a few years in order to aggressively pay off their loans.</p> <p>As diplomatically as I could, I suggested that her plan might be better for their finances and their marriage.</p> <p>You may not have six figures' worth of debt, but if you're like many newlyweds, you likely have debt. One of the best investments you can make is to pay it off as soon as possible.</p> <p>If you're paying 18% on a credit card balance, paying it off would give you a guaranteed 18% return on your money.</p> <p>See also: <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?ref=seealso">When to Do a Balance Transfer to Pay Off Credit Card Debt</a></p> <p>But paying off debt isn't just a good <em>financial </em>investment. A study done by Utah State Assistant Professor Jeffrey Dew, found that &quot;consumer debt fuels a <a href="http://www.stateofourunions.org/2009/bank_on_it.php">sense of financial unease</a> among couples&quot; and increases the likelihood that they will fight more often, and not just about money. On the other hand, Dew found that newly married couples who paid off their debt within the first five years of marriage reported being more satisfied with their marriage than those who did not.</p> <p>So, if you're starting your marriage with debt, pay it all off, with the possible exception of a reasonable mortgage before starting to invest.</p> <h2>4. You Have Some Control</h2> <p>When it comes to investing, there's a lot you can't control. No one knows which way the market will go next, how high inflation will get, or when the next market-moving world crisis will hit. But one factor you <em>can </em>control is how much money you invest.</p> <p>One of the best bits of advice my wife, Jude, and I received before we got married was to base most of our essential living expenses on one income, especially housing costs. So, we bought a condo in what realtors euphemistically described as an &quot;up and coming&quot; neighborhood on Chicago's northwest side. There were no coffee shops nearby, but we could easily afford it on my salary alone. That enabled us to save and invest much of Jude's salary, which gave us a nice head start on our investing by the time our first child arrived four years later and we decided to become a one-income family.</p> <p>As you decide where to live and how much to spend on everything from clothing to vacations, make sure you budget some money to invest.</p> <h2>5. The Future Arrives Faster Than You Can Imagine</h2> <p>Another factor you can control is how soon you start investing. When you're young and newly married, retirement may seem like some vague, distant destination you can worry about later. Besides, you have furniture to buy and trips to take.</p> <p>But consider this. A 30-year-old who invests $400 per month, generates an average annual return of 7%, and stops investing at age 70, will end up with a little over $1 million. If she waits until she's 40 to get started, invests the same $400 per month, and generates that same 7% average annual return, she'll end up with less than $500,000. By waiting 10 years, she will have invested just $48,000 less, but she'll end up with half the money!</p> <p>Compound interest favors the young, so the earlier you start investing the better.</p> <p><em>How are you and your partner managing your investments?</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/5-things-newlyweds-must-know-about-investing">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/stabilize-your-portfolio-with-these-5-bond-funds">Stabilize Your Portfolio With These 5 Bond Funds</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-biggest-myths-about-investing">The 10 Biggest Myths About Investing</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-why-life-insurance-isnt-just-for-old-people">5 Reasons Why Life Insurance Isn&#039;t Just for Old People</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-ways-investing-sucks-and-why-you-should-do-it-anyway">7 Ways Investing Sucks (and Why You Should Do It Anyway)</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-essential-things-women-should-know-about-investing">5 Essential Things Women Should Know About Investing</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment joint finances marriage newlyweds retirement risk tolerance Thu, 11 Feb 2016 22:00:05 +0000 Matt Bell 1654134 at http://www.wisebread.com Stabilize Your Portfolio With These 5 Bond Funds http://www.wisebread.com/stabilize-your-portfolio-with-these-5-bond-funds <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/stabilize-your-portfolio-with-these-5-bond-funds" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_investment_000058699958.jpg" alt="Woman stabilizing her portfolio with bond funds" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Bonds are low-risk investments that can be used to stabilize your portfolio. You may already be familiar with them. Local cities, states, and the federal government are the biggest issuers of bonds, but corporations will also create bond certificates when they're seeking capital. And although they generally carry lower risk than stocks, as an investor you will still need to decide where your comfort level lies. Do you feel secure with corporate bonds, or do you prefer the assuredness that municipal and treasury bonds have to offer?</p> <p>Fortunately, there are a variety of bond funds that allow you to tailor your investment to your risk tolerance and overall needs. Here are six well-performing bond funds to help stabilize your portfolio. (See also: <a href="http://www.wisebread.com/the-most-important-thing-youre-probably-not-doing-with-your-portfolio?ref=seealso">The Most Important Thing You're Probably Not Doing With Your Portfolio</a>)</p> <h2>1. iShares TIPS Bond ETF [<a href="https://www.ishares.com/us/products/239450/ishares-05-year-tips-bond-etf">STIP</a>]</h2> <p>STIP offers exposure to short-term 0-5 years U.S. TIPS, which are government bonds whose value typically rises with inflation. The fund has some growth potential and low volatility. Use it as a short-term hedge against inflation.</p> <ul> <li>Risk: Low</li> <li>Goal: Track index of inflation protected U.S Treasury bonds of less than five years</li> <li>Expense Ratio: .10%</li> <li>Money Manager: BlackRock</li> </ul> <h2>2. iShares National Muni Bond ETF [<a href="https://www.ishares.com/us/products/239766/ishares-national-amtfree-muni-bond-etf">MUB</a>]</h2> <p>Municipalities nationwide fund capital projects with bonds; MUB iShares provides exposure to more than 2,000 U.S. municipal bonds with its top holdings in California and New York, representing 42.97% of its assets. The fund offers tax efficiency for investors in higher tax brackets.</p> <ul> <li>Risk: Moderate</li> <li>Goal: Track index of investment grade U.S. municipal bonds</li> <li>Expense Ratio: .25%</li> <li>Money Manager: BlackRock</li> </ul> <h2>3. Vanguard California Long-Term Tax-Exempt Fund Investor Shares [<a href="https://personal.vanguard.com/us/funds/snapshot?FundId=0075&amp;FundIntExt=INT">VCITX</a>]</h2> <p>This fund aims to create federal and state tax-exempt income and appeals to investors in high tax brackets, particularly those residing within the state of California. This is an intermediate-term bond and more susceptible to inflation.</p> <ul> <li>Risk: Moderate</li> <li>Goal: Long-term tax-free income</li> <li>Expense Ratio: .20%</li> <li>Money Manager: Vanguard</li> </ul> <h2>4. Vanguard Total Bond Market ETF [<a href="https://personal.vanguard.com/us/funds/snapshot?FundId=0928&amp;FundIntExt=INT">BND</a>]</h2> <p>The BND invests in more than 3,000 broad U.S. investment-grade bonds. The fund has relatively high potential for investment income with some volatility. It is appropriate for mid to long-term investors seeking a reliable income stream. Use it to diversify and balance the risks of stocks.</p> <ul> <li>Risk: Low to moderate</li> <li>Goal: Track U.S. bond market returns</li> <li>Expense Ratio: .09%</li> <li>Money Manager: Vanguard</li> </ul> <h2>5. Vanguard Total International Bond ETF [<a href="https://personal.vanguard.com/us/funds/snapshot?FundId=3711&amp;FundIntExt=INT">BNDX</a>]</h2> <p>With its eyes on the world's bond markets, BNDX employs hedging strategies to protect against uncertainty in exchange rates. The fund offers broad exposure to non-US dollar denominated investment grade bonds. Use it to hedge against inflation.</p> <ul> <li>Risk: Low to moderate</li> <li>Goal: Track Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index</li> <li>Expense Ratio: .20%</li> <li>Money Manager: Vanguard</li> </ul> <p><em>Do you have any bond funds in your portfolio?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/qiana-chavaia">Qiana Chavaia</a> of <a href="http://www.wisebread.com/stabilize-your-portfolio-with-these-5-bond-funds">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-to-prepare-for-a-stock-market-dive">8 Ways to Prepare for a Stock Market Dive</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/11-investment-mistakes-we-all-make">11 Investment Mistakes We All Make</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-easy-ways-to-start-green-investing">5 Easy Ways to Start Green Investing</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment balancing portfolio bonds ETF municipal bonds risk tolerance stocks Fri, 05 Feb 2016 14:00:04 +0000 Qiana Chavaia 1650901 at http://www.wisebread.com 4 Ways to Reduce Your Tax Bill With Bonds http://www.wisebread.com/4-ways-to-reduce-your-tax-bill-with-bonds <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-ways-to-reduce-your-tax-bill-with-bonds" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/father_daughter_computer_000082622141.jpg" alt="Man finding ways to reduce his tax bills with bonds" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Financial advisors recommend bonds to investors for portfolio diversification, as a fixed income investment strategy, and to hedge against inflation. Even better, some major bond classes can help you reduce your tax bill, too.</p> <p>What's more, they are low-risk investments. Here's how you can reduce your tax bill with bonds. (See also:&nbsp;<a href="http://www.wisebread.com/9-tax-friendly-ways-to-save-beyond-your-retirement-fund">9 Tax-Friendly Ways to Save Beyond Your Retirement Fund</a>)</p> <h2>1. Invest in Municipal Bonds</h2> <p>Municipal bonds have long garnered the attention of high-earners seeking to minimize their tax obligations. Muni bonds are tax-exempt at the federal level and, in some cases, local and state tax exempt as well, especially if the investor resides in the issuing state or municipality.</p> <p>Though munis faced some scrutiny during the financial crisis, many &mdash; if not most &mdash; munis deserve a second look now that local government finances are on much more stable footing.</p> <h2>2. Buy U.S. Treasury Bonds</h2> <p>U.S. Treasury bonds pay interest income once every six months. That income is exempt from state, local, and the alternative minimum tax. Some treasury bonds can also <a href="https://www.fidelity.com/fixed-income-bonds/individual-bonds/us-treasury-bonds">reduce your tax bill</a>, even if investing outside of a retirement account.</p> <h2>3. Purchase Zero Coupon Bonds</h2> <p>Zero coupon bonds are exempt from state and local tax. As their name suggests, these government bonds pay no interest, but often offer higher yields. Investors beware, however: Zero coupon bonds come with higher risks than their traditional counterparts, so consider the risk-reward trade-offs before investing in this asset class.</p> <h2>4. Put Bonds Inside Tax-Free and Tax-Deferred Accounts</h2> <p>Investors can defer any taxes owed on interest income by delaying distributions and holding these investments in a tax-deferred retirement account, such as an IRA or 401K. Once the money is withdrawn at retirement age, it'll be taxed based on the individual's tax bracket. Using the same strategy, if they are kept in a tax-free account, such as a Roth IRA or Roth 401K, distributions taken at retirement are tax-free.</p> <p><em>Are bonds in your portfolio? </em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/qiana-chavaia">Qiana Chavaia</a> of <a href="http://www.wisebread.com/4-ways-to-reduce-your-tax-bill-with-bonds">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/a-simple-guide-to-series-i-savings-bonds-i-bonds">A Simple Guide to Series I Savings Bonds (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/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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/stabilize-your-portfolio-with-these-5-bond-funds">Stabilize Your Portfolio With These 5 Bond Funds</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-to-prepare-for-a-stock-market-dive">8 Ways to Prepare for a Stock Market Dive</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Taxes 401 k bonds IRA municipal tax-deferred treasury Tue, 02 Feb 2016 22:00:06 +0000 Qiana Chavaia 1649194 at http://www.wisebread.com 7 Things Your Financial Advisor Wishes You Knew http://www.wisebread.com/7-things-your-financial-advisor-wishes-you-knew <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-things-your-financial-advisor-wishes-you-knew" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_thinking_money_000035721100.jpg" alt="Woman realizing what her financial advisor wished she knew" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The cat's out of the bag: You don't need boatloads of money to invest like the super rich &mdash; you just need to understand the ins-and-outs of investing well enough. And who better than financial advisors to share the secrets that can help you succeed as an investor? Read on for the coveted tricks of the trade that your financial advisor wishes you already knew. (See also: <a href="http://www.wisebread.com/investment-advice-you-should-never-hear-from-your-financial-advisor">Investment Advice You Should Never Hear From Your Financial Advisor</a>)</p> <h2>1. Start Early and Stick With It</h2> <p>Believe it or not, the best time to start investing is during your 20s. Yes, it's true that you probably won't have much money to speak of during these years, as you're just getting your feet wet. Nonetheless, your 20s are the ideal decade to start building your wealth, because the compounding power of time is on your side. You may not have access to much in terms of disposable income during these years, but odds are that you have access to something. Even if the spare change you have to work with totals no more than $100 a month, invest it. By the time you're ready to retire, you well may have racked up close to $200,000, assuming a 6% return.</p> <h2>2. Think Long-Term</h2> <p>Generally speaking, wealth generates slowly. So don't pass up opportunities to win small gains. The road to riches will have ups and downs, but there will always be ways to turn around your losses. The trick is to create and maintain a financial safety net, and play within those means. It will take time to build. But your safety net should ultimately be large enough to cover the risk you take on. It's true that big risk leads to big rewards. But it's important to refrain from taking on any risk that's bigger than your safety net. As your safety net grows, you'll be able to shoulder increasingly bigger risks responsibly.</p> <h2>3. Don't Panic</h2> <p>You're playing the long game, remember? Ignore Wall Street's daily temper tantrums. Avoid knee-jerk investments. And, above all, know your risk tolerance. The market recovers from even the biggest of crashes. Just keep your eye on the end game, and don't put all your eggs in one basket. Selling during a market panic is a financial mistake most advisors warn against.</p> <h2>4. Watch Out for Fees</h2> <p>There are few certainties in the world of investment &mdash; one of them is fees. Brokerage fees. Financial advisory fees. Investment service fees. Think of them as money out the window. And, while largely unavoidable, it is indeed within your power to monitor the fees you're paying for investment products and services and make sound decisions based on them. A good advisor will help you minimize these, by selecting low-fee investments and avoiding trading too frequently. The less you spend on fees, the more money you'll have invested that's actually working for you.</p> <h2>5. Don't Get Suckered by Big Names</h2> <p>Don't invest in companies simply because they are well-known as great companies. Invest in those that are great companies and also have stock shares selling at a great price. A good advisor knows that ideally, you want the stocks you buy to be under-priced &mdash; or at least priced fairly. This will give you the leeway you need to actually turn a profit.</p> <h2>6. Max Out Your Retirement Contribution</h2> <p>You can now invest more money into your 401K than ever. The IRS last year raised the maximum limit to $18,000, plus another $6,000 in annual catch-up contributions if you're older than 50. That means you could save for retirement while saving thousands on federal income taxes. But most Americans won't take advantage of it. In 2013, just 12% of folks with 401K plans contributed up to <a href="https://pressroom.vanguard.com/content/nonindexed/How_America_Saves_2014.pdf">the maximum limit</a>. Even if you can't afford to make the maximum contribution, you can still reduce your taxes by boosting your contribution by any amount. Investing in your 401K may not be sexy. But it's smart. And if your employer matches your contribution, you've just doubled your money.</p> <h2>7. Bolster Your Investment Income</h2> <p>The average American worker pays $16,000 a year in federal and state <a href="http://taxfoundation.org/blog/average-us-worker-pays-over-16000-income-and-payroll-taxes">income and payroll taxes</a>. That's a huge and (largely) unavoidable tax burden of 31%! But there's another type of income &mdash; investment income &mdash; that's generally taxed at a lower rate than employment income. Investment income is also exempt from state and local taxes, which means you can rack up significant savings if you live in a high-tax state or municipality. It can be intimidating to think that a significant portion of your total income can be derived from investments. But even if you start small, over time, it can.</p> <p><em>How many of these truths do you stick to?</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/7-things-your-financial-advisor-wishes-you-knew">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-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/the-6-best-financial-news-sites-for-investors-in-a-hurry">The 6 Best Financial News Sites for Investors in a Hurry</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-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-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-biggest-myths-about-investing">The 10 Biggest Myths About Investing</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-choose-a-roth-401k-or-a-regular-401k">Should You Choose a Roth 401k or a Regular 401k?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment 401k advice contributions fees financial advisors Secrets wealth building Tue, 02 Feb 2016 14:00:15 +0000 Brittany Lyte 1649367 at http://www.wisebread.com 4 Ways "Boring" Investments Make Life Exciting http://www.wisebread.com/4-ways-boring-investments-make-life-exciting <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-ways-boring-investments-make-life-exciting" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_reading_newspaper_000051430362.jpg" alt="Man learning ways boring investments make life exciting" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>To jump-start 2016, I resolved to get physically fit by joining DailyBurn with celebrity trainer Bob Harper. Based on my target goals, the program began with BlackFire, a strategic fitness program of diverse routines designed to make your muscles burn and push your body beyond its limits. But exotic training programs like these can deplete you and only work when balanced by proper nutrition and diet.</p> <p>The same is true for investing &mdash; going too exotic is not good for your portfolio and can throw you off balance. Mixing things up by adding in some &quot;boring&quot; investments can offer steady growth and offset the possibility of market volatility. And if you're like most of us, keeping and growing your money can provide more real excitement than any fad or risky investment.</p> <p>Here are four ways &quot;boring&quot; investments make life more exciting.</p> <h2>1. Less Market Volatility</h2> <p>The markets are down these days and some investors are in a frenzy. But instead of abandoning ship, like many people do, try balancing your portfolio with asset classes that carry less risk. This is the number one way boring investments are more exciting &mdash; because during times of panic, you don't have to. Review your allocation strategy accordingly.</p> <p>Another plus: When you avoid assuming unnecessary investment risks, you'll have more money on hand to take calculated risks and profit when riskier investments fall.</p> <h2>2. Cost-Efficient</h2> <p>Boring investments cost less due to their lower total expense ratios. Traditional mutual funds are actively managed and indexed mutual funds have administrative fees costing slightly more than ETFs, but both are substantially more cost-efficient in comparison to individual stocks. Morningstar Investment Research estimates the average asset-weighted mid-growth index mutual fund costs 0.39%, while ETFs average 0.23%. (See also: <a href="http://www.wisebread.com/the-top-5-etfs-you-should-buy-now?ref=seealso">The Top 5 ETFs You Should Buy Now</a>)</p> <p>This cost efficiency adds up over time, saving you thousands of dollars over a lifetime of investing. And you know what's exciting? Having more money at the end of the day.</p> <h2>3. Tax-Efficient</h2> <p>Maximizing your portfolio's tax efficiency can save you big bucks. As an example, one common strategy to offset capital gains is tax-loss harvesting, which offsets profits with tax deductions on losses (up to $3,000 annually). Another &quot;boring&quot; investment that can help you save on taxes is municipal bonds. The income payouts from muni bonds are exempt from federal, state, and city tax. And &quot;boring&quot; investments like ETFs and mutual funds have less turnover since they are passively managed, making them tax-efficient.</p> <p>(For 2016, the maximum capital gains tax is 20%. How much you pay depends on your income. If you're in the 10% to 15% marginal tax bracket, or a person who has earned below $50,400 (head of household) or $75,300 (joint filers), you will owe zero tax on income derived from the sale of securities.)</p> <h2>4. Hands-Free Investments</h2> <p>Don't find investing all that exciting, in general? Then consider hands-off investments such as target-date ETFs or mutual funds which free you to do whatever really excites you with your time. Or, consider using a low-cost robo-advisor to manage your money for you. Then all you have to do is sit back and watch your money grow. (See also: <a href="http://www.wisebread.com/should-you-trust-your-money-with-these-4-popular-financial-robo-advisers?ref=seealso">Should You Trust Your Money With These 4 Popular Financial Robo-Advisers?</a>)</p> <p><em>What boring investments do you find thrilling?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/qiana-chavaia">Qiana Chavaia</a> of <a href="http://www.wisebread.com/4-ways-boring-investments-make-life-exciting">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/11-investment-mistakes-we-all-make">11 Investment Mistakes We All Make</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-ways-to-invest-in-biotech-without-getting-burned">7 Ways to Invest in Biotech Without Getting Burned</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-etfs-can-put-more-money-in-your-pocket-than-mutual-funds">8 Ways ETFs Can Put More Money in Your Pocket Than Mutual Funds</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-duel-etfs-vs-mutual-funds">The Duel: ETFs vs. Mutual Funds</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment ETFs low risk market volatility municipal bonds mutual funds stability Mon, 01 Feb 2016 14:00:04 +0000 Qiana Chavaia 1647738 at http://www.wisebread.com 6 Sobering Facts About the Stock Market http://www.wisebread.com/6-sobering-facts-about-the-stock-market <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-sobering-facts-about-the-stock-market" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_reading_paper_000053942274.jpg" alt="Man learning sobering facts about the stock market" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The market's downright disappointing start to 2016 (the worst yearly start since 1928), demonstrates that putting money in the market can be a sobering experience. Even when things are moving in a favorable direction, investing is not for the faint of heart. Here are six inconvenient truths about the stock market.</p> <h2>1. The Market Doesn't Always Go Up</h2> <p>While the stock market's long-term trend has been upward, its path has been neither straight nor smooth. Instead, it's been marked by many twists and turns, with some scary downturns thrown in for good measure.</p> <p>It's easy to make the mistake of hearing about the market's performance for a given year &mdash; say it grew by 14% &mdash; and assume it moved from January 1st to December 31st in a straight, smooth upward path. But it doesn't usually work that way.</p> <p>Let's look at 2013 to illustrate the point. That was a year when the S&amp;P 500 generated a remarkable return of <em>nearly 30%</em>. But there were quite a few downturns along the way, including a more than 2% decline on April 15th, the day of the Boston Marathon bombing. Each time the market slipped, you can be sure many investors wondered whether it would continue to fall, and if so, how far.</p> <p>Those who stayed invested were handsomely rewarded, but the ride got a bit scary at numerous times throughout the year.</p> <h2>2. The Market Regularly Goes Down</h2> <p>From 1900 through 2013, there were 123 corrections (about one per year) and 32 bear markets (one every 3.5 years), according to Ned Davis Research.</p> <p><em>Correction</em> is a deceptively neutral-sounding term. When it comes to the stock market, a correction doesn't mean a mistake was found and fixed. It refers to a market decline of at least 10% from its most recent high.</p> <p>Bear markets are even more severe. They're defined as a decline of at least <em>20%</em> from the market's most recent high.</p> <p>Downturns of any kind can be scary. But if you come to expect them from time to time, it can take away some of the fear.</p> <h2>3. No One Knows Which Way the Market Will Go Next</h2> <p>Every January, without fail, stock market prognosticators come out of the woodwork, gaze into their crystal balls, and tell all who will listen where the market will be 12 months later and what sectors will be especially hot. Most fail.</p> <p>Among recent examples, the consensus forecast called for high single digit market growth in 2015. It ended the year flat. Merrill Lynch thought energy stocks looked promising for 2015. The sector fell 25%.</p> <h2>4. You Can't Time the Market</h2> <p>There are countless studies that demonstrate the impossibility of determining the best times for investors to get in and out of the market. For example, a Morningstar study found that in a 10-year period through the end of 2013, the average mutual fund investor underperformed the average fund performance by <a href="http://news.morningstar.com/articlenet/article.aspx?id=637022&amp;sr=wt0110">2.5% per year</a>. &quot;In 2009,&quot; the company noted, &quot;money flew out of stock funds, but that proved to be the bottom of the market and a great spot to get in.&quot;</p> <p>Even if you are able to get out of the market right before a big decline, chances are you'll be unable to get back in at the right time. Once fear has driven you out, that same fear will make you hesitant to get back in.</p> <p>The good news is that you don't have to pull off the impossible task of perfectly determining the <em>best </em>time to invest. Consistently investing at the <em>same </em>time each month (which is called &quot;dollar-cost averaging&quot;) has proven very effective over time.</p> <h2>5. The Biggest Threat to Successful Investing Is You</h2> <p>There are numerous risks investors face: inflation risk, longevity risk (the ironically-named fear of living a long life, which can be a problem if you don't have enough money saved to cover your costs of living), and market risk, just to name three of the biggest. But an even greater risk is the possibility that you will do something to run your portfolio off the rails.</p> <p>In addition to ill-advised attempts at market timing, some investors become over-confident during times of rising markets and take on more risk than they should. For others, lethargy is the problem. According to a UBS study, the average Millennial has over half of his or her <a href="https://www.ubs.com/content/dam/WealthManagementAmericas/documents/investor-watch-1Q2014-report.pdf">investment portfolio in cash</a>! Such investors are squandering their unique advantage of having time to maximize the impact of compound interest.</p> <h2>6. You Need the Stock Market</h2> <p>Perhaps most sobering of all, the stock market represents your best opportunity to generate the sort of gains required in order for you to afford all that you'll need and want in your later years. Over the long haul, the <a href="http://investmentsillustrated.com/clients/crsp/bigpicture/">stock market has outperformed</a> inflation, cash, bonds, gold, and real estate.</p> <p>So, make peace with the market. Learn some of the essentials &mdash; such as the power of compound interest, how to determine your optimal <a href="http://www.wisebread.com/the-basics-of-asset-allocation">asset allocation</a>, and the importance of adopting the mindset of a long-term investor, not a short-term trader. Then find and implement a strategy you can stay with no matter how sobering market conditions are at the moment.</p> <p><em>How have you come to terms with the risks of 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/6-sobering-facts-about-the-stock-market">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/learn-how-to-invest-with-these-5-stock-market-games">Learn How to Invest With These 5 Stock Market Games</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-6-best-financial-news-sites-for-investors-in-a-hurry">The 6 Best Financial News Sites for Investors in a Hurry</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/who-cares-about-where-the-stock-market-is-headed">Who Cares About Where The Stock Market Is Headed?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-stocks-to-invest-in-during-the-holidays">10 Stocks to Invest in During the Holidays</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-deliciously-profitable-food-and-beverage-stocks">10 Deliciously Profitable Food and Beverage Stocks</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment bear markets corrections predicting stock market timing Thu, 28 Jan 2016 14:00:05 +0000 Matt Bell 1643288 at http://www.wisebread.com The 6 Best Financial News Sites for Investors in a Hurry http://www.wisebread.com/the-6-best-financial-news-sites-for-investors-in-a-hurry <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-6-best-financial-news-sites-for-investors-in-a-hurry" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_using_tablet_000058336726.jpg" alt="Man using best financial news sites as an investor in a hurry" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Good investment decisions start with industry knowledge, information, and research. And as an investor, you probably already understand that news moves markets. But being the busy person you are, you're probably already inundated with tasks, making sifting through the plethora of information feel like a job in itself.</p> <p>Not sure where to get your investing news and information in a pinch? For our most time-conscious investors, here are the six best investments sites. (See also:&nbsp;<a href="http://www.wisebread.com/find-the-investing-style-thats-right-for-you">Find the Investing Style That's Right for You</a>)</p> <h2>1. Yahoo! Finance</h2> <p><a href="http://finance.yahoo.com/">Yahoo! Finance</a> aggregates the latest financial news stories and market data onto a single platform, including the latest in international news and markets. Users can create a watchlist to follow their favorite stocks, and when they login, they can view all market updates and news for stocks they follow. I particularly like how this site also pulls the latest news stories pertaining to stocks that may have a positive or negative correlation to those you follow.</p> <h2>2. CNBC</h2> <p>The CNBC TV network delivers real-time financial market data and updates, all day. That same news, information, and more is also available at your fingertips online over at <a href="http://www.cnbc.com/">CNBC.com</a>. I recommend that busy investors find time to tune-in to CNBC's programming and watch shows like Fast Money, Jim Cramer's Mad Money, Power Lunch, and others. These shows offer some of the most up-to-date coverage available and will help improve your analysis of markets. But if time's short, you can get video clips, articles, and other updates from those same shows' experts on the website.</p> <h2>3. Bloomberg</h2> <p>Bloomberg L.P. is where seasoned investors turn for some of the most trusted financial information. <a href="http://www.bloomberg.com/markets">Bloomberg Markets</a> keeps you informed by broadcasting news and analysis all day. For investors on the go, try any of <a href="http://www.bloomberg.com/mobile/">Bloomberg's mobile apps</a>, like Bloomberg TV, Bloomberg Business, Bloomberg Businessweek, and more. For professional investors whose employers are footing the bill, Bloomberg also offers <a href="http://www.bloomberg.com/professional/">Bloomberg Professional</a>, a subscription service featuring Bloomberg Terminal.</p> <h2>4. TheStreet</h2> <p>Created by CNBC's Mad Money host Jim Cramer (and Marty Peretz), <a href="http://www.thestreet.com/">TheStreet</a> is a leading financial news site. But the real attraction to the site is founder Jim Cramer and his expert investment knowledge, from the Cramer Stock Picks Newsletter and blog to his investment portfolio and insights. I've watched him since 2007 and have been successful with many stock picks adapted from his show (your performance may vary, of course). The site's <a href="https://secure2.thestreet.com/cap/login/aa_mbp_ft_video-wc_button_autoplay-on.jsp?CREATIVECODE=cr-0012&amp;PPOID_1=400041&amp;flowid=11fde9d41a2&amp;url=http%3A%2F%2Fwww.thestreet.com%2Fk%2Faap%2F_tscnav%2Findex.html">Action Alert PLUS</a> is a subscription service that grants subscribers access to research provided by TheStreet's team of analysts for $349.95 per year.</p> <h2>5. Zacks</h2> <p>Founded in 1977, Zacks Investment Research is another leading financial news and research site committed to helping investors reach their investment goals. Some of the site features include <a href="http://www.zacks.com/stocks/zacks-rank">Zacks Ranks</a>, a list of the company's top stock picks, <a href="http://www.zacks.com/education/stock-education">Zacks Education</a>, a series of readings and video, and <a href="http://www.zacks.com/portfolios/my-stock-portfolio/create-new-portfolio.php">Portfolio Tracker</a>, a service that lets you add holdings to your portfolio and receive free broker recommendations, company updates, email alerts, and more. And one of the main features of the site is its extensive Earning Per Share (EPS) data and analysis.</p> <h2>6. The Motley Fool</h2> <p>Like all of our best investment sites, <a href="http://www.fool.com/">The Motley Fool</a> offers news, insights, and analysis. The site also offers virtual advisor services for an annual premiums of $149 to $2,000. Another feature of the site is its forum of individual investors sharing insights and tips through its various discussion boards.</p> <p>The Wall Street Journal Digital Network (WSJDN) is also worth mentioning. The network includes the <a href="http://www.wsj.com/">WSJ</a>, of course, <a href="http://www.barrons.com/">Barron's</a> (which has been around as a leading financial news service since 1921), and <a href="http://www.marketwatch.com/">MarketWatch</a>, which offers several subscription-based financial newsletters such as <a href="http://www.marketwatch.com/premium-newsletters/hulbert-financial-digest">Hulbert Financial Digest</a>, <a href="http://www.marketwatch.com/premium-newsletters/marketwatch-options-trader">Options Trader</a>, <a href="http://www.marketwatch.com/newsimages/support/marketing/retirementweekly/20070703/drjuly07p3h.html">Retirement Weekly</a>, and <a href="http://www.marketwatch.com/premium-newsletters/etf-trader">ETF Trader</a>.</p> <p>Note: The sites suggested in this article were recommended in consideration of equity investors. Where you turn for market news and information should depend on your investment strategies.</p> <p><em>Where do you go for investing news and resources?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/qiana-chavaia">Qiana Chavaia</a> of <a href="http://www.wisebread.com/the-6-best-financial-news-sites-for-investors-in-a-hurry">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-best-websites-to-help-you-retire-early">5 Best Websites to Help You Retire Early</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-things-your-financial-advisor-wishes-you-knew">7 Things Your Financial Advisor Wishes You Knew</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/6-sobering-facts-about-the-stock-market">6 Sobering Facts About the Stock Market</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/learn-how-to-invest-with-these-5-stock-market-games">Learn How to Invest With These 5 Stock Market Games</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/who-cares-about-where-the-stock-market-is-headed">Who Cares About Where The Stock Market Is Headed?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment advice blogs finance sites newsletters stock market websites Thu, 21 Jan 2016 18:01:02 +0000 Qiana Chavaia 1642420 at http://www.wisebread.com Learn How to Invest With These 5 Stock Market Games http://www.wisebread.com/learn-how-to-invest-with-these-5-stock-market-games <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/learn-how-to-invest-with-these-5-stock-market-games" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_investment_tablet_000044888130.jpg" alt="Woman learning how to invest with stock market games" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Have you ever wondered how you can learn to invest without risking your hard-earned cash? Stock market simulators may be the magic ticket. Most major brokerages offer online stock trading simulators that allow you to invest with pretend money, helping you learn the ropes before you plunk down real cash.</p> <p>Your account comes preloaded with a lump sum of pretend money, and your trades and investments fluctuate based on real market conditions, allowing you to see how they'd actually perform. Ready to get started? Try one of these five stock market simulators, and get comfortable with investing without risking a single hard-earned dollar. (See also:&nbsp;<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>)</p> <h2>1. TD Bank Wow!Zone</h2> <p><a href="http://virtualstockmarket.tdbank.com/">TD Bank's Fantasy Stock Market</a> game is designed for kids and young adults, but its stock market simulator is a useful tool for all beginner investors. Players start with a $100,000 play money portfolio balance and can trade on any of the U.S. stock exchanges.</p> <h2>2. optionsXpress by Charles Schwab</h2> <p>If you have more advanced market knowledge and want to test a new trading strategy before risking your own investments, try <a href="http://www.optionsxpress.com/">optionsXpress</a> by Charles Schwab. Here you can trade stocks, options, and futures, place advanced orders, and play around with 40 trading tools to help you analyze market conditions. Your account comes preloaded with $25,000 in virtual cash. Sign up for your <a href="http://www.optionsxpress.com/tools_research/virtual_trade.aspx">free optionsXpress account</a> to get started.</p> <h2>3. ScottradeELITE</h2> <p>Similar to optionsXpress, the <a href="https://research.scottrade.com/knowledgecenter/Public/help/Article?docId=767460b36aa84c2f8117fc6b92d0d876">ScottradeELITE</a> virtual trading platform allows users to place mock trades, access research tools, and test trading strategies. Accessing the platform requires software installation.</p> <h2>4. Wall Street Survivor</h2> <p><a href="http://www.wallstreetsurvivor.com/">Wall Street Survivor's</a> interactive platform has been recommended by Forbes, and it promises to teach users the fundamentals of personal finance, trading stocks, bonds, mutual funds, futures, currencies, and options. Users gain access a full suite of online resources, including virtual leagues, courses, videos, and article archives on investing topics and ideas.</p> <h2>5. Investopedia</h2> <p><a href="http://www.investopedia.com/simulator/">Investopedia's stock simulator</a> is one of the most robust platforms available for those just starting out. The website also offers free basic investing education via Investopedia University, along with thousands of insightful articles, and in-depth &quot;how to&quot; guides ranging from <a href="http://www.investopedia.com/university/beginner/?header_alt=true">Investing 101: Introduction</a> to advanced trading strategies. All users start out with an account balance of $100,000 in virtual capital.</p> <p><em>What's your favorite investing simulator or game? </em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/qiana-chavaia">Qiana Chavaia</a> of <a href="http://www.wisebread.com/learn-how-to-invest-with-these-5-stock-market-games">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-much-can-you-afford-to-risk-in-a-play-money-account">How Much Can You Afford to Risk In a Play Money Account?</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/6-sobering-facts-about-the-stock-market">6 Sobering Facts About 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/the-6-best-financial-news-sites-for-investors-in-a-hurry">The 6 Best Financial News Sites for Investors in a Hurry</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/who-cares-about-where-the-stock-market-is-headed">Who Cares About Where The Stock Market Is Headed?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-stocks-to-invest-in-during-the-holidays">10 Stocks to Invest in During the Holidays</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment play money risk simulators stock market Fri, 08 Jan 2016 14:00:03 +0000 Qiana Chavaia 1634306 at http://www.wisebread.com Find the Investing Style That's Right for You http://www.wisebread.com/find-the-investing-style-thats-right-for-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/find-the-investing-style-thats-right-for-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_piggy_bank_000009343524.jpg" alt="Woman finding the investing style that&#039;s right for her" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>No matter how carefully you invest, there will always be some level of risk involved. But by choosing an investing style that works for your risk/reward preferences, age, and investment timeline, you can help manage how well your investment portfolio will perform.</p> <p>We've created this primer on investing strategies to help you better understand which investing style may be right for you.</p> <h2>Active vs. Passive</h2> <p>How determined are you to outperform the market? This will help you answer the question of whether you prefer an active vs. passive investment strategy.</p> <h3>Active</h3> <p>An active investor generally wants to exceed the performance of a benchmark index (such as the S&amp;P 500). They're typically more aggressive and willing to accept more risk for potential greater reward.</p> <p>Thus, they either trade more frequently, or choose to invest in actively managed funds featuring portfolio managers who are consistently trading and working to increase investor returns. This means that actively managed funds typically charge higher fees than passively managed funds, since the costs of more frequent trades, staff, and other needs add up. Keep in mind, however, that research indicates few active traders or fund managers beat the market consistently.</p> <h3>Passive</h3> <p>A passive investor is typically less concerned about outperforming the market. Instead, they simply want to achieve returns that match their benchmark index. Why would anyone not try to beat the market, you might ask? For starters, it's nearly impossible to do so on a consistent basis, which means your returns might suffer. And active investing incurs more fees, further eroding the returns on your money.</p> <p>For this reason, passively managed funds tend to be more affordable &mdash; they don't require a full-time team of researchers, nor are they placing frequent trades. Most experts suggest that for most investors, passive investing generates the greatest returns over time.</p> <h2>Growth vs. Value</h2> <p>Both growth and value investing strategies focus on choosing stocks that provide the best possible returns. However, their underlying philosophies and approaches differ significantly.</p> <h3>Growth</h3> <p>Growth investing focuses on companies with faster than average projected growth (better known as &quot;growth stocks&quot;). In most cases, these companies are growing very quickly and reinvesting most of their earnings back into the business to encourage continued future growth. They tend to have higher price-to-earnings ratios, making them more expensive than value stocks.</p> <p>The benefit of investing in growth funds is they have a greater potential for higher returns, but consider that this also means that you are willing to accept more risk. This means that when stock prices are rising, you will likely do better than the overall market, and when stock prices are falling, you will likely do worse. But if you are willing to accept higher risk for potentially greater returns, than growth funds may be right for you.</p> <h3>Value</h3> <p>Value investing focuses on companies whose stock prices don't necessarily reflect their worth. There are a number of reasons why these stocks may be undervalued (such as negative publicity or lower-than-projected earnings), and you may be able to benefit from this. In order to find these types of funds, investors will look for a security that has been discounted so much that its market value is less than its intrinsic value.</p> <p>Value funds tend to be safer than growth funds and generally have the potential for both current income (such as dividends) as well as long-term appreciation. These types of funds are ideal for risk-averse investors.</p> <h3>Blend</h3> <p>Blended funds invest in both growth and value stocks. This is ideal if you are willing to accept some risk and want to invest in growth companies, but also want to enjoy the lower price-to-earnings and price-to-growth ratios of value companies.</p> <h2>Market Capitalization Matters, Too</h2> <p>Have you ever wondered what the difference is between large value funds and small value funds? This has to do with market capitalization (or the size of the companies in which the fund invests). Market capitalization classes are defined as follows:</p> <ul> <li>Large-cap companies have a total share value over $10 billion<br /> &nbsp;</li> <li>Mid-cap companies have a total share value between $2 billion&ndash;$10 billion<br /> &nbsp;</li> <li>Small-cap companies are those with a total share value under $2 billion</li> </ul> <p>In most cases, more risk-averse investors will want to look for dependable large-cap stocks or stock funds, such as industrial stalwarts like Coca-Cola or IBM. Small-cap stocks or funds tend to have more risk, but also the potential for greater returns.</p> <p>If you're still learning about investing, do your research. There are various <a href="http://events.snwebcastcenter.com/manulife-gsrs/Prod/Quizzes/PortfolioOptionsWorksheet/EN/index.html">online financial tools</a> that can help you determine which investment strategy and types of funds are right for you. Most investing experts would agree that you should naturally reduce your investment risk tolerance as you age so that you aren't left with high risk investments right before retirement. Your needs &mdash; and investing style &mdash; may change over time, so re-assess your portfolio and investment style as your financial picture evolves. (See also: <a href="http://www.wisebread.com/8-steps-to-starting-a-retirement-plan-in-your-30s?ref=seealso">8 Steps to Starting a Retirement Plan in Your 30s</a>).</p> <p>For more information and specific investment and asset allocation advice, consider consulting with a <a href="http://www.wisebread.com/do-you-need-a-financial-planner">financial planner</a>.</p> <p><em>Do you have other tips for choosing the right investing style? Please share your thoughts in the comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/andrea-cannon">Andrea Cannon</a> of <a href="http://www.wisebread.com/find-the-investing-style-thats-right-for-you">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-things-your-financial-advisor-wishes-you-knew">7 Things Your Financial Advisor Wishes You Knew</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/stabilize-your-portfolio-with-these-5-bond-funds">Stabilize Your Portfolio With These 5 Bond 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/4-ways-to-reduce-your-tax-bill-with-bonds">4 Ways to Reduce Your Tax Bill With Bonds</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-sobering-facts-about-the-stock-market">6 Sobering Facts About the Stock Market</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/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 active growth market capitalization passive strategies value Tue, 05 Jan 2016 14:00:03 +0000 Andrea Cannon 1630353 at http://www.wisebread.com The Best Ways to Invest $50, $500, or $5000 http://www.wisebread.com/the-best-ways-to-invest-50-500-or-5000 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-best-ways-to-invest-50-500-or-5000" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_holding_cash_000076050947.jpg" alt="Woman finding best ways to invest $50, $500, or $5000" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Investing isn't just for your dad and the super rich folks down the block. Anyone can &mdash; and should &mdash; put a portion of those hard-earned dollars to work. The prospect of reaping additional profits by committing capital to stocks, bonds, mutual funds, real estate, and more might seem sort of scary. But it's an exercise everyone can benefit from &mdash; people with slim pockets included. It's all about weighing potential gains with potential risk, and then zeroing in on an investment vehicle that caters to you.</p> <p>Read on for our <a href="http://www.wisebread.com/11-investment-mistakes-we-all-make">investment guide for the newbies</a> and dabblers. Whether you've got $50, $500, or $5,000 to spare, there's a wealth-growing opportunity waiting for you.</p> <h2>1. $50</h2> <p>Fifty smackers won't make you rich. But that doesn't mean you can't transform a $50 bill into an opportunity to build up your wealth. Often the key to growing small sums is getting creative, so now's the time to channel your inner artist.</p> <p>Why not flip furniture on Craigslist? Think about it: There's a deluge of couches, end tables, stools, and vintage tea carts on the buy-and-sell site. Often, when it comes to furniture listings, one of four things is the case: The seller doesn't know what the item is worth; the seller is moving and just needs to get rid of things quickly; the seller can't take a good photo of a coffee table for the life of him; or the furniture piece needs just a little TLC to realize its potential worth. Here's where you swoop in to remedy the situation.</p> <p>If the seller undersold you a sofa, it's not your duty to inform him that he could have made an arm and a leg rather than $25. Seize this as an opportunity to resell the item you got a steal for at a better price. If the seller has a nice wooden chair, but posted a dim-lit, fuzzy photo of it positioned in the middle of a messy living room overrun with cats, you've just scored yourself a chance to buy the chair and market it in a way that reflects its true worth.</p> <p>Another option for folks with $50 to invest: Build up your savings account. It's not sexy. But if you're able to sock away $50 every once in a blue moon, you'll eventually have a nice little safety net. What's more, you'll be on your way to building up enough money to do some more progressive investing (think bonds and stocks). After all, you've got to have a little to make a little. But you certainly don't need a lot to grow your pot.</p> <h2>2. $500</h2> <p>A $500 investment gives you a little bit more flexibility. While it's hard to grow that amount quickly and substantially &mdash; ahem, unless you've perfected your poker face &mdash; there are lots of ways to make $500 work for you without risking big losses on the betting machines.</p> <p>In fact, you won't wager <em>any</em> losses if you invest in a certificate of deposit. Popularly known as a CD, this special type of deposit account offers a higher rate of interest than a standard savings account. The catch is that you can only deposit money into it for a specified length of time. During that time &mdash; six months, 18 months, two years, etc. &mdash; your fixed investment generates interest, which you can cash out, along with your original $500, when your CD reaches maturity.</p> <p>A CD is a safe investment &mdash; an ideal option for folks amenable to slow growth and low risk. Unlike a savings account, a CD can help prevent you from burning through your hard-earned dollars (but if you're in a jam, you can easily access it for a small penalty). And unlike stocks and many other forms of investment, CDs come with federal deposit insurance, so there's zero risk of losing your money. National rates for a one-year CD currently hover around 1.25% at the moment. Not great, but be sure to shop around.</p> <p>Another great option is hooking up with an online financial advisor. They're truly all the rage. You can open an account with <a href="http://track.flexlinks.com/a.ashx?foid=1029882.1538723&amp;fot=9999&amp;foc=1">Betterment</a>, for example, even if you have no money. (The company recommends a monthly deposit of $100, which is just enough to waive the $3 fee per month for accounts less than $10,000). Dubbed &quot;the easiest investment site you'll ever use&quot; by Slate, Betterment is just one of <a href="http://www.wisebread.com/should-you-trust-your-money-with-these-4-popular-financial-robo-advisers">several robo-advisors</a> offering services that were at one time a privilege of the uber-rich. (Thanks, Internet.) Some of these companies will even make the trades for you, suggest ways to minimize your taxes, and rebalance your accounts. There's more risk involved in investing with an online financial advisor, but there's also more opportunity for gains.</p> <h2>3. $5000</h2> <p>One of the biggest misconceptions about investing is that you need a lot of money to jump in the game. Not so. By sinking $5,000, a relatively modest sum, into a quality mutual fund, you'll gain access to a stock portfolio that's diversified and professionally managed. Another benefit: Investors in mutual funds can cash in their shares at any time, giving you more flexibility should you endure some sort of financial emergency.</p> <p>Sure, there's risk involved. Some of the investments in your portfolio will falter. But others are bound to flourish. Some years will be losers. During others, your earnings might grow by 8%. Bottom line: If you choose a mutual fund that's high-performing, there's ample opportunity to grow your investment into a bigger sum. You've just got to come to terms with that fact that every year won't be a good one. And so, notably, the $5,000 you invest shouldn't be money that you're hoping to spend next year. Rather, view this investment as your pot of gold for sometime down the road.</p> <p>If you're wary of risk, consider investing, say, $3,000 in mutual funds. Then pour the remainder into bonds. Bonds won't bring home the big returns, but they'll give you reliable ones, providing you with a solid footing on which to weather the uncertainty of an investment in stocks.</p> <p>Rome wasn't built in a day, and neither were most sizeable portfolios. Even a modest start is a good start &mdash; and a big step forward toward financial security.</p> <p><em>How have you invested a windfall?</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/the-best-ways-to-invest-50-500-or-5000">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/11-investment-mistakes-we-all-make">11 Investment Mistakes We All Make</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-easy-ways-to-start-green-investing">5 Easy Ways to Start Green Investing</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/stabilize-your-portfolio-with-these-5-bond-funds">Stabilize Your Portfolio With These 5 Bond Funds</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-to-prepare-for-a-stock-market-dive">8 Ways to Prepare for a Stock Market Dive</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment bonds earnings mutual funds profits stocks windfalls Mon, 04 Jan 2016 14:00:02 +0000 Brittany Lyte 1630352 at http://www.wisebread.com 10 Stocks and Bonds That Will Profit From the Fed Rate Hike http://www.wisebread.com/10-stocks-and-bonds-that-will-profit-from-the-fed-rate-hike <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-stocks-and-bonds-that-will-profit-from-the-fed-rate-hike" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/interest_rate_increase_000020286301.jpg" alt="Finding stocks and bonds that will profit from the fed rate hike" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The Federal Reserve finally did what it's been hinting at for some time, and raised the target on its benchmark rate by a quarter of a percentage point. It's the first interest rate hike after spending much of the last decade with interest rates near zero.</p> <p>Interest rates are still going to be historically quite low, but some investments may decline in value in the short term. After all, it's the low interest rate environment that has <em>partly </em>fueled the rise in stock prices in recent years.</p> <p>That said, it's still very possible to profit even as interest rates go up. There are some market sectors that love higher rates, and in general, a rise in rates is a signal from the Fed that the nation's economy is healthy. (See also:&nbsp;<a href="http://www.wisebread.com/this-is-how-much-the-feds-interest-rate-hike-might-cost-you">This Is How Much the Fed's Interest Rate Hike Might Cost You</a>)</p> <p>Here are ten investments that might respond well as interest rates go up.</p> <h2>1. SPDR S&amp;P Regional Bank ETF [<a href="http://finance.yahoo.com/q?s=KRE">NYSE: KRE</a>]</h2> <p>When interest rates rise, small banks do quite well because more people are willing to increase their cash holdings. This ETF counts many strong small banks in its portfolio, including Bank of the Ozarks and Great Western Bancorp. This ETF has seen a return of more than 13% over the last year, suggesting that the anticipation of higher rates may already be baked into the price. But it's still worth buying.</p> <h2>2. Wells Fargo [<a href="http://finance.yahoo.com/q?s=WFC">NYSE: WFC</a>]</h2> <p>If smaller banks aren't your thing, then take a look at some big banks. Billionaire investor Warren Buffett owns more shares of Wells Fargo than any other company. New loans made by the bank will benefit from the higher rates, as will any existing variable rate loans. Other big banks worth a look include US Bancorp and BNY Mellon.</p> <h2>3. Schwab Short-Term U.S. Treasury ETF [<a href="http://finance.yahoo.com/q?s=SCHO">NYSE: SCHO</a>]</h2> <p>The conventional wisdom is that a hike in interest rates make long-term bonds less attractive, but short-term bonds perform well. Consider that the yield on a two-year treasury note hit a year high recently. Charles Schwab reported that during the three periods when the Fed rose rates since 1990, short-term bonds were the only sector that saw increases each time. This ETF from Schwab has some of the lowests fees on the market, so it's likely a good buy if you're interested in fixed income investments. The iShares Short Treasury Bond ETF is also well regarded.</p> <h2>4. Apple [<a href="http://finance.yahoo.com/q?s=AAPL">NYSE: APPL</a>]</h2> <p>It's the biggest company in the world. It has a very healthy balance sheet. In a time of raising rates and general uncertainty, it's good to hang with companies that have solid margins, lots of cash, and low volatility. Any blue chip stock with a long track record of steady growth is a good buy in this environment.</p> <h2>5. Alphabet [<a href="http://finance.yahoo.com/q?s=GOOGL">NYSE: GOOGL</a>]</h2> <p>Another one of the largest and most stable companies in the world, most likely unaffected by a rise in interest rates. Investing in Google's parent company can help keep you insulated from any market uncertainty over the next few months.</p> <h2>6. MetLife [<a href="http://www.google.com/finance?cid=664378">NYSE: MET</a>]</h2> <p>There are few sectors clamoring for an interest rate hike more than life insurers. These companies rely on interest income to boost their margins, so they generally have not been fans of the low interest rate environment. MetLife is the a largest company in this sector. Prudential and New York Life are also worth a look.</p> <h2>7. Accushares VIX Index ETF [<a href="http://finance.yahoo.com/q?s=VXUP">NYSE: VXUP</a>]</h2> <p>It's not entirely clear how the markets will react to the news of the interest rate bump, but most observers predict some amount of volatility in the short term. You can capitalize on that volatility by buying shares of this ETF that is based on the most common volatility index. It's an esoteric product, and I wouldn't invest my life savings into it, but it may be one way to capitalize on investor uncertainty.</p> <h2>8. Starbucks [<a href="http://finance.yahoo.com/q?s=SBUX">NYSE: SBUX</a>]</h2> <p>If the Fed is raising interest rates, it's sending a signal that it believes the economy is in good shape. And a strong economy means people are doing well enough to afford discretionary items, including that morning cup of coffee. Starbucks is a leader in the restaurant/food area, and should benefit from a strong economy overall.</p> <h2>9. Mastercard [<a href="http://www.google.com/finance?cid=299286">NYSE: MA</a>]</h2> <p>Goldman Sachs put this credit card company on its list of &quot;quality&quot; stocks worth buying in advance of a rate hike, and its reasoning is sound. If the economy is strong in the Fed's eyes, then it's strong enough for people to be buying more goods and services. Companies like Mastercard do better when people go shopping.</p> <h2>10. Chipotle Mexican Grill [<a href="http://finance.yahoo.com/q?s=CMG">NYSE: CMG</a>]</h2> <p>Shares of this burrito eatery have tumbled in the last few months, in part due the company being linked to cases of <em>e.coli</em> around the country. But assuming that the cases aren't indicative of a larger problem with the restaurant, this is a well-regarded company with a solid balance sheet. Chipotle shares should be poised for a rebound with the Fed showing confidence in the nation's economy.</p> <p><em>Will your portfolio be helped or hurt by the Fed's recent rate increase?</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-and-bonds-that-will-profit-from-the-fed-rate-hike">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-crucial-things-you-should-know-about-bonds">5 Crucial Things You Should Know About Bonds</a></span> </div> </li> <li class="views-row views-row-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/stabilize-your-portfolio-with-these-5-bond-funds">Stabilize Your Portfolio With These 5 Bond Funds</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-to-prepare-for-a-stock-market-dive">8 Ways to Prepare for a Stock Market Dive</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 bonds borrowing Fed interest rates investing stocks Thu, 17 Dec 2015 12:00:08 +0000 Tim Lemke 1622171 at http://www.wisebread.com How Much Can You Afford to Risk In a Play Money Account? http://www.wisebread.com/how-much-can-you-afford-to-risk-in-a-play-money-account <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-much-can-you-afford-to-risk-in-a-play-money-account" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_measuring_funds_000068915471.jpg" alt="Man learning how much to keep in his play money account" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Do you have a &quot;play money&quot; account &mdash; a self-directed brokerage account that you invest in for fun or to take greater risks? If you do, you're not alone. But be careful: Don't let the fun of testing out your own investment strategies make you short more important accounts such as your IRA, 401K, or <a href="http://www.wisebread.com/is-building-an-emergency-fund-always-a-good-idea">emergency fund</a>.</p> <p>There's nothing wrong with having such an investment account. Not only can they be fun, but they can also teach consumers whether their investment ideas have merit or if they are more likely to flop. The problem comes when consumers become so focused on their &quot;play money&quot; that they invest to the detriment of their other accounts.</p> <p>So how much is too much to invest in such an account? That depends on your individual financial situation. But here are some guidelines for how much you should be investing in your other, essential accounts before you drop big bucks on &quot;play money.&quot;</p> <h2>Emergency Fund</h2> <p>Life is filled with unexpected expenses, and some of them are big. Your car's transmission fails? That could be a thousand-dollar repair. Your hot water heater goes on the fritz? Get ready for an unexpected multi-hundred-dollar replacement.</p> <p>That's where an emergency fund comes in. As its name suggests, the dollars in this fund are reserved for those unexpected expenses. Not having an emergency fund can be trouble: If you don't have the dollars to cover that new furnace, the odds are high that you'll place that expense on a credit card.</p> <p>And what if you lose your job? An emergency fund can help cover your daily expenses while you search for new work.</p> <p>Financial experts recommend that consumers build an emergency fund that can cover at least six months of normal daily expenses. If your fund is larger, that's even better. The smart move, then, is to make sure that you have a sizable emergency fund saved up <em>before </em>you set aside any dollars for a &quot;play money&quot; account.</p> <h2>Retirement Accounts</h2> <p>How much will you need for retirement? That depends largely on the type of retirement you want to live. If you want to travel the world, you'll need more money than if you simply want to spend more time with your grandchildren. Don't shortchange your retirement years by investing too much in a &quot;play money&quot; account and too little in an IRA or 401K.</p> <p>It can get complicated determining how much money you'll need to save for retirement each year. But there are a few general rules of thumb that you can use to determine how much money you'll need after you leave the workforce.</p> <p>Financial planners have long recommended that retirees plan on spending from 60% to 90% of their most recent after-tax annual income each year of their retirement. As an example, say you were earning $50,000 each year immediately before your retirement at an effective tax rate of 15. You were then living on $42,500 in income after taxes each year.</p> <p>If you decide that you'd like to live on 85% of this amount each year in retirement, you'd need $36,125 in income every year you are not working. You can get this income from a variety of sources, including everything from Social Security payments to pension income to withdrawals from your savings.</p> <p>Again, make sure that you are saving as much as you need for retirement before you start a &quot;play money&quot; account. If your employer offers a 401K plan, withdraw the maximum amount from each of your paychecks to fund it. If you can't afford to do this, then you can't afford a &quot;play money&quot; account, either.</p> <p><em>Do you have a play money account?</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/how-much-can-you-afford-to-risk-in-a-play-money-account">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/learn-how-to-invest-with-these-5-stock-market-games">Learn How to Invest With These 5 Stock Market Games</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/5-ways-to-boost-your-odds-of-retiring-early">5 Ways to Boost Your Odds of Retiring Early</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/whats-the-right-percentage-of-cash-for-your-portfolio">What&#039;s the Right Percentage of Cash for Your Portfolio?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-tell-if-youre-on-track-for-retirement">How to Tell if You&#039;re on Track for Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement emergency funds play money risk savings Mon, 07 Dec 2015 14:00:27 +0000 Dan Rafter 1618545 at http://www.wisebread.com The 10 Biggest Myths About Investing http://www.wisebread.com/the-10-biggest-myths-about-investing <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-10-biggest-myths-about-investing" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_thinking_newspaper_000053925278_0.jpg" alt="Man learning biggest myths about investing" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>There's a lot of information about investing floating around. There are also a lot of bad opinions, misconceptions, and flat-out lies.</p> <p>Knowing the difference between myth and reality is your ticket to hitting your investing goals. Here are 10 of the biggest myths about investing:</p> <h2>1. It's Hard to Get Started</h2> <p>If you've never invested money before, it can seem intimidating &mdash; and you may not even know where to begin. But the reality is that it's never been easier to get started with investing. It's simple to open a brokerage account or Individual Retirement Account (IRA) online, and there's a wealth of great information available to investors for free on the web. If you work for a company that offers a 401K plan, you are usually automatically enrolled. All you have to do is read up on the investment choices and decide how much money you want to put aside.</p> <h2>2. You Need a Lot of Money to Make a Lot of Money</h2> <p>There were days when stock brokers wouldn't even take your calls unless you were willing to invest thousands of dollars. Nowadays, it's possible to open a brokerage account and invest just a share at a time. Granted, transaction fees can make it worthwhile to invest larger sums at a time, and some investment accounts have minimum requirements &mdash; but you generally don't need to be rich to get started. A modest amount of cash set aside at regular intervals can result in a big nest egg upon retirement. Consider that even a person making $30,000 a year and setting aside 5% of their income over 30 years will end up with more than $150,000, based on a 7% annual return.</p> <h2>3. It's Overly Risky</h2> <p>Investing is not without risk, but you are fully in control of how much risk you want to assume. If you're the skittish type, there are plenty of investments, such as bonds and dividend stocks, that will allow you to make money without much risk. And it's important to remember that while stocks can go down in value quickly, they have historically always rebounded. Since the Great Depression, there have been fewer than two dozen down years for stocks.</p> <h2>4. The System Is Rigged</h2> <p>You will often hear this from critics of our financial system. I won't suggest that our system is perfect, but to call something &quot;rigged&quot; is to suggest that the average person can't succeed. The truth is that for the average person, it's easy to buy stocks, bonds, and other investments in a straightforward and transparent way, and make money doing it.</p> <h2>5. Past Performance Indicates Future Returns</h2> <p>It's tempting to buy an investment because it has done well in the past. And it's generally true that if a stock has generated a solid return over a very long period of time, it's a good bet moving forward. But there's absolutely nothing to prevent an investment from tanking even after years of great returns. And it certainly doesn't make sense to invest in something based on the performance of the previous few months.</p> <h2>6. Investment Professionals Know a Lot More Than You</h2> <p>I don't want to disparage fund managers and analysts, but there is a growing body of evidence that no one, not even the most experienced professionals, can consistently beat the performance of the overall stock market. If you put money in an index fund that tracks the overall stock market, there's a good chance you'll do as well or better than the hotshots on Wall Street.</p> <h2>7. You Should Try to Get Stocks During an IPO</h2> <p>Initial public offerings get a lot of headlines, and it may seem desirable to get in at the ground floor. Examples abound, however, of companies that failed to come out of the gate strong. In fact, many companies have seen share prices dip well below IPO levels. (Facebook is the most recent prime example of this.) For most investors, it makes sense to wait after an IPO to see how things go. If you're investing for the long haul, waiting won't hurt you too much. In fact, you may even get a better bargain.</p> <h2>8. You Need to Have [Insert Investment Here] in Your Portfolio</h2> <p>You'll get a lot of advice from people telling you that you need a specific type of investment to optimize your returns. But there is rarely a single investment that should be considered a must-have. There are a million ways to build a collection of investments that will help you get rich; the best advice is to diversify and have a long investment horizon.</p> <h2>9. Gold Is Always Great</h2> <p>You may assume that gold is an amazing investment. I mean, it's <em>gold</em> right? And there has to be some reason there are advertisements for gold on TV all the time. The truth is that gold <em>can</em> be a great investment, but only at certain times. It's worth having some in your portfolio to stay diversified, but gold has taken a beating recently. Shares of the SPDR Gold Trust are down nearly 15% in the last three years.</p> <h2>10. $1 Million Is a Magic Number</h2> <p>One would think that becoming a millionaire means you're set for life. Not these days, however. Thanks to inflation and longer life expectancies, a million bucks may not be enough for most people to live long and retire comfortably. It's a good sum of money, but if you want your money to last 25 to 30 years, you're probably going to want double that &mdash; or even more, if possible. This means saving as much money as you can, as early as you can.</p> <p><em>Do you adhere to these &mdash; or other &mdash; myths about investing?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/the-10-biggest-myths-about-investing">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/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/whats-the-right-percentage-of-cash-for-your-portfolio">What&#039;s the Right Percentage of Cash 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/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/you-may-be-putting-your-retirement-money-in-the-wrong-place">You May Be Putting Your Retirement Money in the Wrong Place</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment 401k emergency funds IRA retirement Mon, 07 Dec 2015 10:02:20 +0000 Tim Lemke 1618546 at http://www.wisebread.com 5 Latin American Markets to Watch http://www.wisebread.com/5-latin-american-markets-to-watch <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-latin-american-markets-to-watch" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/south_america_globe_000006090971_0.jpg" alt="Learning which Latin American markets to watch" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The <a href="http://www.imf.org/external/pubs/ft/weo/2015/update/02/">International Monetary Fund (IMF)</a> projects that for 2015, the U.S. economy will grow a modest 2.5%. And some analysts predict single digit returns for the S&amp;P 500 for 2016.</p> <p>Emerging economies in Latin America have stronger growth prospects. In general, emerging markets are projected to grow two to three times faster than the U.S. over the next several years. According to the <a href="http://blog-imfdirect.imf.org/2015/11/09/bad-debt-in-emerging-markets-still-early-days/">IMF</a>, from 2009 to 2014 the largest emerging economies grew a total of 48%. As Latin America continues to adapt free-market policies, here are five emerging Latin American <a href="http://www.wisebread.com/10-best-stock-markets-in-the-world-in-2015">markets to watch</a>.</p> <h2>1. Peru</h2> <p>The Peruvian economy is one of the fastest growing economies in Latin America. It is the world's third largest copper producer, and receives a significant portion of its revenue from the mining sector and exportation of metals such as gold, lead, iron, and tin. It also gets about 10% of its revenue from petroleum. While many commodities have taken a hit recently, Peru's current GDP growth of 5.1% is attributed to an expected increase in mining production and infrastructure projects.</p> <p><strong>Projected growth</strong>: 5.0% (2016 est.)</p> <p><strong>GDP Growth (2013 to 2017)</strong>: 27.4%</p> <p><strong>Inflation Rate:</strong> 3.5%</p> <p><strong>Government Debt as % of GDP</strong>: 15.9% (2014 est.)</p> <h2>2. Chile</h2> <p>Chile's moderate growth of 3.3% is attributable to an increase in demand for its exports, thanks to the weakening of the Chilean Peso. But Chile is also an unusually stable economy by Latin American standards, and deserves to be on this list, given the relatively lower risk investors may face. Planned infrastructure deals and changes in business tax policies &mdash; expected to attract outside business investors &mdash; are also good news for the Chilean economy.</p> <p><strong>Projected growth</strong>: 3.3% (2016 est.)</p> <p><strong>GDP Growth (2013 to 2017)</strong>: 24.2%</p> <p><strong>Inflation Rate</strong>: 4.6%</p> <p><strong>Government Debt as % of GDP</strong>: 16.5% (2014 est.)</p> <h2>3. Colombia</h2> <p>Colombia is Latin America's fastest growing economy, thanks in part to a surge in foreign direct investment, and an improving security situation. It's also less dependent on oil than most oil producing countries &mdash; representing only 16% of GDP. Though the Colombian Peso has weakened recently (to approximately 2,900 Pesos per USD), several industries stand to gain from the weaker currency, such as manufacturing, financial services, telecommunications, tourism and transportation.</p> <p><strong>Projected growth</strong>: 3.7% (2016 est.)</p> <p><strong>GDP growth (2013 to 2017)</strong>: 21.9%</p> <p><strong>Inflation rate</strong>: 5.25%</p> <p><strong>Government debt as % of GDP</strong>: 41.9% (2014 est.)</p> <h2>4. Mexico</h2> <p>Mexico has the second largest and strongest economy in Latin America. Its main exports are petroleum, automobiles, and a variety of manufactured parts and electronic equipment. Its expected growth is due to strong U.S. demand for its exports (the U.S. imports 70% of all Mexican exports), and planned spending on infrastructure projects like Mexico City's new international airport.</p> <p><strong>Projected growth</strong>: 3.3% (2016 est.)</p> <p><strong>GDP Growth (2013 to 2017)</strong>: 17.5%</p> <p><strong>Inflation Rate</strong>: 2.88%</p> <p><strong>Government Debt as % of GDP</strong>: 41% (2014 est.)</p> <h2>5. Brazil</h2> <p>Brazil is the largest economy in Latin America, with a population of just over 200 million people. Though corruption scandals have plagued recent governments, foreign direct investment to the South American nation remains strong, and the country's growth prospects reasonable.</p> <p><strong>Projected growth</strong>: 1.0% (2016 est.)</p> <p><strong>GDP Growth (2013 to 2017)</strong>: 22.3%</p> <p><strong>Inflation Rate:</strong> 14.25%</p> <p><strong>Government Debt as % of GDP</strong>: 59.3% (2014 est.)</p> <p><em>Have you added any of these markets to your portfolio?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/qiana-chavaia">Qiana Chavaia</a> of <a href="http://www.wisebread.com/5-latin-american-markets-to-watch">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/9-reasons-why-the-us-economy-is-kicking-the-worlds-butt">9 Reasons Why the U.S. Economy Is Kicking the World&#039;s Butt</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-best-stock-markets-in-the-world-in-2015">10 Best Stock Markets in the World in 2015</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/why-inflation">Why Inflation?</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/tips-and-i-bonds">TIPS and I-Bonds</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/peak-debt-and-income">Peak Debt and Income</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Economy foreign markets GDP inflation latin america market growth Fri, 04 Dec 2015 14:00:03 +0000 Qiana Chavaia 1618127 at http://www.wisebread.com 5 Important Things to Know About Your 401K and IRA in 2016 http://www.wisebread.com/5-important-things-to-know-about-your-401k-and-ira-in-2016 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-important-things-to-know-about-your-401k-and-ira-in-2016" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/2016_money_finances_000078468345.jpg" alt="Learning important changes coming to your 401K in 2016" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We can all agree that investing in a 401K, IRA, or Roth, while being a scary proposition at times, is quite frankly the best use of our money for saving long term. Retirement might be a long way off for you, but it's important to stay on top of the changes that take place for these accounts each year. They could shift your overall direction of planning for your financial future.</p> <p>Here is a list of what will and won't change for your 401K and IRA in 2016.</p> <h2>No Change</h2> <p>Before we look at what's new, let's look at what's staying the same.</p> <h3>1. Contribution Limits</h3> <p>&quot;No change&quot; usually implies something good is happening because it's consistent. In this case, no change for contribution limits means that you are limited to the same amount of money you could put away in 2015 for 2016. In 401K plans, that is $18,000 for people under the age of 50 &mdash; and in IRA and Roth plans, the contribution max will remain at $5,500 for those age 50 or younger.</p> <p>This may not seem like a big deal, but over time the ability to put away less for your retirement means that you will need to earn more on your money that is already invested. According to Vanguard 401K data, only about 10% of participants put away the max every year. There's no escaping the truth that the more you put away, the better off you are going to be in the long run.</p> <h3>2. 401K/IRA Combo</h3> <p>Many people believe that you can only have a 401K or an IRA, but not both. That simply isn't true. In fact, having a separate IRA and a 401K can be a smart financial strategy. The downside of having both is that depending on your income, you may or may not be phased out of deducting your contributions to both plans.</p> <p>In 2016, the income limitations will stay the same. If your adjusted gross income is between $61,000&ndash;$71,000 for single and head of household, or between $98,000&ndash;$118,000 for married couples, your deductible amount for contributions to your IRA will be phased out. If your income is lower, you will receive the full deduction. If your income is over those limits, you won't be able to deduct any portion of your contributions.</p> <h2>Change</h2> <p>And here are the details set to change &mdash; make sure you update your contributions to match.</p> <h3>3. Roth Income Threshold Limits Increase</h3> <p>Roth plans are very popular, especially with the Millennial demographic. They work in reverse of an IRA. Your contributions are made on an <em>after-tax</em> basis, but your distributions in retirement are tax-free. The objective is that you will be in a higher tax bracket when you retire, hence why you will ultimately save money on taxes that would've been due if you had an IRA. Roth plans have their own contribution income limits and are quite generous. In 2016, the contributions income threshold limits will increase by $1,000.</p> <h3>4. IRA for Non-Working Spouse</h3> <p>What about those spouses that don't work, but still want to contribute to an IRA? In 2016, IRA income limits will increase for spouses without retirement accounts by $1,000.</p> <p>If your spouse contributes to a <a href="http://www.wisebread.com/7-penalty-free-ways-to-withdraw-money-from-your-retirement-account">retirement account</a> at work, but <em>you</em> don't work, you can set up your own IRA and contributions will be tax deductible up to $184,000 for couples filing jointly. Your contributions begin to phase out from $184,000&ndash;$194,000, and are completely phased out above that income level (meaning they wouldn't be tax deductible). You can always still contribute up to the IRA contribution max, but you just wouldn't receive the deduction.</p> <h3>5. Saver's Credit</h3> <p>The saver's credit is arguably one of the most overlooked tax credits. It rewards lower income individuals and families for saving for their retirement in any retirement plan. If you qualify for this credit, it is worth anywhere from 10%&ndash;50% of the contributed amount &mdash; up to $2,000 for individuals and $4,000 for couples. The credit is available to singles with an income under $30,750, and for couples, under $61,500.</p> <p>Make sure your accountant is aware if you qualify for this credit so you can take advantage of this great benefit. Consider it the government's matching program for your retirement contributions.</p> <p><em>How's your 401K doing?</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/5-important-things-to-know-about-your-401k-and-ira-in-2016">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/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-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/4-reasons-why-you-must-open-a-roth-ira-before-april-15">4 Reasons Why You Must Open a Roth IRA Before April 15</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/optimize-your-ira-and-401k">Optimize Your IRA and 401(k)</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/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 IRA Roth saver's credit taxes Tue, 01 Dec 2015 14:00:24 +0000 Shannah Game 1617390 at http://www.wisebread.com