Investment https://www.wisebread.com/taxonomy/term/4808/all en-US Investing Is Great, But Saving Is Even Better https://www.wisebread.com/investing-is-great-but-saving-is-even-better <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/investing-is-great-but-saving-is-even-better" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/happy_young_woman_showing_piggy_bank_with_money_0.jpg" alt="Happy young woman showing piggy bank with money" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When people talk about investing, they often emphasize getting the most return for their money. If they are getting a 7 percent return on their stock portfolio, they'll strive to get 8 percent. If they are already at 8 percent, they'll push for 9 percent or more.</p> <p>Shooting for a high return is laudable, but what often gets lost in this discussion is the most powerful element of building wealth: saving as much money as you can in the first place.</p> <p>It's important to remember that individual investors can't control stock market returns. They also can't entirely control the cost of commissions, fees, taxes, and the like. They can, however, control their own rate of savings. And there is ample evidence that it is the initial savings, not investment gains, that determines how much you end up with over time.</p> <p>Let's examine this phenomenon further.</p> <h2>Saving more can offset lackluster returns</h2> <p>If you save as much as you can, you don't have to stress as much about getting the optimal return on your investments. In fact, a boost in savings can often be more powerful than a higher rate of return.</p> <p>Here are two scenarios to illustrate this point.</p> <p>In the first scenario, you save $5,000 per year for 30 years and get a healthy 10 percent annual return. This results in about $900,000.</p> <p>In the second scenario, you save $8,000 per year for 30 years, but you only average an 8 percent annual return. You will end up with around $978,000 in this second scenario. In other words, just $3,000 additional dollars each year (or $250 per month) can more than offset a 2 percent difference in return. Bump the savings up to $10,000 per year, and you're looking at more than $1.2 million in the end. (See also: <a href="http://www.wisebread.com/6-confidence-inspiring-facts-about-the-stock-market?ref=seealso" target="_blank">6 Confidence-Inspiring Facts About the Stock Market</a>)</p> <h2>Saving more can supercharge great returns</h2> <p>In an ideal world, you're able to save a lot and get a great return on your investments. When these things happen together, the results can be amazing.</p> <p>Let's revisit the scenarios above. Imagine if you were able to boost your contributions from $5,000 to $8,000 annually while also getting that great 10 percent return. You'd be looking at $1.44 million 30 years later. In other words, that additional $3,000 each year results in $500,000 more over time.</p> <h2>Saving more can let you be more conservative</h2> <p>Not everyone is entirely comfortable with the notion of investing. There is always an element of risk when you put money in the markets, and everyone's tolerance for this is different. If you don't save a lot of money up front, you may find yourself trying aggressive and risky investing strategies to make up the difference. That cannot only take you out of your comfort zone, but lead to financial disaster.</p> <p>If you save as much as you can, you can afford to be more cautious about what you invest in. This is especially true for older investors who are looking to preserve their savings as they near retirement. (See also: <a href="http://www.wisebread.com/4-simple-ways-to-conquer-your-fear-of-investing?ref=seealso" target="_blank">4 Simple Ways to Conquer Your Fear of Investing</a>)</p> <h2>More savings can mean more matching funds</h2> <p>If you have a 401(k) plan through your employer, you are likely eligible to receive matching contributions from the company. For example, the organization may choose to match all contributions up to 5 percent of your salary. Some match even more than that. It's free money, but you don't get that money unless you contribute yourself.</p> <p>Fidelity reports that one in five 401(k) plan holders don't put in enough to get all potential matching funds. If you are unsure of how much to contribute to your 401(k), the best answer is as much as possible, but at least up to the maximum company match. (See also: <a href="http://www.wisebread.com/7-things-you-should-know-about-your-401k-match?ref=seealso" target="_blank">7 Things You Should Know About Your 401(k) Match</a>)</p> <h2>Saving more can give you a bigger tax break</h2> <p>With traditional IRAs and 401(k) plans, any money you contribute is deducted from your taxable income. So let's say you earn $50,000 annually and contribute $5,000 into your 401(k). That means only $45,000 is taxed; under current tax law, that's $1,100 less you would pay in taxes compared to $50,000.</p> <p>Investors can contribute up to $18,500 annually into a 401(k). With traditional IRAs, you can contribute as much as $5,500 each year. That is a big chunk of money that can grow into an even more massive sum over time and will lead to big tax savings.</p> <h2>You can withdraw Roth IRA contributions early, but not gains</h2> <p>If you have a Roth IRA, it's generally not a good idea to take out money before you retire. But, if you run into a financial crisis, you are permitted to take out <em>your own contributions</em> without paying any penalty or taxes. For this reason, there are some financial advisers who say it's OK to think of a <a href="http://www.wisebread.com/using-your-roth-ira-as-an-emergency-fund-ever-a-good-idea?ref=internal" target="_blank">Roth as an emergency fund</a> if you have nowhere else to turn.</p> <p>If you take out capital gains, however, you must pay tax on that money and a 10 percent early withdrawal penalty. Thus, if you don't put in a lot of money into your Roth to begin with, you may not really have that much available to withdraw. (See also: <a href="http://www.wisebread.com/7-penalty-free-ways-to-withdraw-money-from-your-retirement-account?ref=seealso" target="_blank">7 Penalty-Free Ways to Withdraw Money From Your Retirement Account</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=https%3A%2F%2Fwww.wisebread.com%2Finvesting-is-great-but-saving-is-even-better&amp;media=https%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FInvesting%2520Is%2520Great%252C%2520But%2520Saving%2520Is%2520Even%2520Better.jpg&amp;description=Investing%20Is%20Great%2C%20But%20Saving%20Is%20Even%20Better"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/Investing%20Is%20Great%2C%20But%20Saving%20Is%20Even%20Better.jpg" alt="Investing Is Great, But Saving Is Even Better" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="https://www.wisebread.com/investing-is-great-but-saving-is-even-better">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="https://www.wisebread.com/8-things-millennials-can-do-right-now-for-an-early-retirement">8 Things Millennials Can Do Right Now for an Early Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/the-right-way-to-withdraw-money-from-your-retirement-accounts-during-retirement">The Right Way to Withdraw Money From Your Retirement Accounts During Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/11-basic-questions-about-retirement-saving-everyone-should-ask">11 Basic Questions About Retirement Saving Everyone Should Ask</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/5-alternatives-to-a-401k-plan">5 Alternatives to a 401(k) Plan</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/5-common-habits-of-retirement-savvy-savers">5 Common Habits of Retirement-Savvy Savers</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment 401(k) employer match gains IRA rate of return saving money taxes Tue, 24 Jul 2018 08:00:09 +0000 Tim Lemke 2154695 at https://www.wisebread.com 4 Golden Rules of Investing in Retirement https://www.wisebread.com/4-golden-rules-of-investing-in-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-golden-rules-of-investing-in-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/our_money_is_safe_and_sound.jpg" alt="Our money is safe and sound" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>After you've spent a lifetime investing <em>for </em>retirement, it can feel very different to invest <em>in </em>retirement. Many retirees are hesitant to start withdrawing from the nest eggs they've carefully built over the years. And, they sometimes feel especially nervous about managing that account, knowing it needs to last as long as they do.</p> <p>Thankfully, there are some guidelines that can help. Here are four golden rules for investing in retirement.</p> <h2>1. Don't be too conservative</h2> <p>Longevity is increasing. Your retirement could last for two decades or more. According to the Social Security Administration, a 65-year-old man today can expect to live to nearly age 85. A 65-year-old woman today can expect to live past age 86. And those are just averages. Many people will live well into their 90s.</p> <p>Of course, given a choice, most people would prefer to live a long life. However, the more years you spend in retirement, the longer your nest egg will need to last. That's why it's important to avoid being overly conservative with your investments in your later years. Bond-like returns will only get you so far. (See also: <a href="https://www.wisebread.com/5-ways-longevity-is-changing-retirement-planning-and-what-to-do-about-it?ref=seealso" target="_blank">5 Ways Longevity Is Changing Retirement Planning &mdash; And What to Do About It</a>)</p> <p>This reality is reflected in many of today's target-date funds. For example, Vanguard's Target Retirement 2020 fund, which is designed for people right on the cusp of retirement, currently has 54 percent of its assets invested in stocks. The lowest level of stock exposure Vanguard's target-date funds ever hit is 30 percent, which occurs seven years after each fund's target date. Thereafter, it remains fixed.</p> <p>If you're managing your own portfolio, you would be wise to take a page from these professionally managed portfolios and make sure you're maintaining a healthy exposure to stocks. (See also: <a href="https://www.wisebread.com/7-reasons-youre-never-too-old-to-buy-stocks?ref=seealso" target="_blank">7 Reasons You're Never Too Old to Buy Stocks</a>)</p> <h2>2. Don't be too aggressive</h2> <p>By the same token, you can't afford to get carried away with risk. With the current long-running bull market showing few signs of running out of steam, it may be tempting to take on more risk than you should, especially if you feel somewhat behind on your retirement savings. But that would be dangerous to your portfolio and your peace of mind.</p> <p>Instead, trust the rules of asset allocation. If your optimal asset allocation calls for a 50/50 stock/bond mix, stick with that. One day, the bull market <em>will </em>end and you'll be glad you weren't invested any more aggressively than you should have been. If you're not sure what your optimal mix should be, <a href="https://personal.vanguard.com/us/FundsInvQuestionnaire" target="_blank">Vanguard's asset allocation questionnaire</a> can help you figure it out.</p> <p>Remember, if your nest egg isn't as large as it should be, you have other options besides taking undue risk with your investments. For example, if you're still in the workforce, pushing back your intended retirement date even by a few months or a year can make a noticeable difference in your financial health. (See also: <a href="https://www.wisebread.com/how-one-more-year-of-work-can-transform-your-retirement?ref=seealso" target="_blank">How One More Year of Work Can Transform Your Retirement</a>)</p> <h2>3. Consider maintaining a cash &quot;bucket&quot;</h2> <p>One of the biggest threats to your portfolio in retirement goes by the fancy name of <em>sequence of returns risk. </em>That refers to the possibility that the market could fall just as you enter retirement. While the market naturally ebbs and flows over time, a significant downturn right at the start of retirement can put a strain on your cash flow throughout retirement.</p> <p>Especially if you lean toward the conservative side of the risk spectrum, one way to manage that risk is to implement the bucket strategy &mdash; creating a cash account containing two to three years' worth of essential living expenses. That can help you avoid having to withdraw from your investment account in a bear market.</p> <p>When the market is falling, you draw living expenses from your cash bucket, giving your investment account time to recover. When the market is growing, you draw from your investment account while also using a portion of your gains to refill your cash bucket. (See also: <a href="https://www.wisebread.com/8-ways-to-preserve-your-net-worth-in-retirement?ref=seealso" target="_blank">8 Ways to Preserve Your Net Worth in Retirement</a>)</p> <h2>4. Make sure you're on the same page as your spouse</h2> <p>Within many marriages, there's a division of labor, with each spouse taking the lead in different areas. If one of you has been managing the investments, now is the time to bring the other into the process. Otherwise, when the investment-manager spouse dies, it can leave the surviving spouse ill-equipped to take over.</p> <p>If you handle the investments in your household, start talking about your investments with your spouse. How many accounts do you have and what's the total balance? What are the online passwords? What strategy are you following with your investments? If you were to die first, how would you recommend your spouse manage the account? If you're using a fairly involved approach, is there a simplified alternative? (See also: <a href="https://www.wisebread.com/5-money-conversations-couples-should-have-before-retirement?ref=seealso" target="_blank">5 Money Conversations Couples Should Have Before Retirement</a>)</p> <p>One of the sweetest rewards of a life lived well is peace of mind in your later years. When it comes to experiencing <em>financial </em>peace of mind during retirement, the four steps described above should help.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=https%3A%2F%2Fwww.wisebread.com%2F4-golden-rules-of-investing-in-retirement&amp;media=https%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F4%2520Golden%2520Rules%2520of%2520Investing%2520in%2520Retirement.jpg&amp;description=4%20Golden%20Rules%20of%20Investing%20in%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/4%20Golden%20Rules%20of%20Investing%20in%20Retirement.jpg" alt="4 Golden Rules of Investing in Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="https://www.wisebread.com/4-golden-rules-of-investing-in-retirement">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-9"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/7-reasons-youre-never-too-old-to-buy-stocks">7 Reasons You&#039;re Never Too Old to Buy Stocks</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/7-reasons-to-invest-in-stocks-past-age-50">7 Reasons to Invest in Stocks Past Age 50</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/5-ways-longevity-is-changing-retirement-planning-and-what-to-do-about-it">5 Ways Longevity Is Changing Retirement Planning (And What to Do About It)</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/what-you-need-to-know-about-the-easiest-way-to-save-for-retirement">What You Need to Know About the Easiest Way to Save for Retirement</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/how-to-make-sure-you-dont-run-out-of-money-in-retirement">How to Make Sure You Don&#039;t Run Out of Money in Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement bonds cash bucket conservative gains golden rules longevity nest egg returns risk rules of thumb stocks Thu, 19 Jul 2018 08:00:09 +0000 Matt Bell 2154892 at https://www.wisebread.com How Bond Prices and Yields Work https://www.wisebread.com/how-bond-prices-and-yields-work <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-bond-prices-and-yields-work" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/paper_pie_chart_on_a_plate_1.jpg" alt="Paper pie chart on a plate" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When we talk about investing, we frequently talk about stocks. Stocks are likely to make up a the bulk of your investment portfolio during the majority of your investing years.</p> <p>Bonds, which tend to be less risky but also less rewarding, are more important as you get closer to retirement. However, bonds can be a helpful part of your investment mix at any age, and it's important to understand how they work &mdash; even if you don't own many of them right now.</p> <p>Let's examine bonds and why we should pay close attention to them these days. (See also: <a href="http://www.wisebread.com/5-crucial-things-you-should-know-about-bonds?ref=seealso" target="_blank">5 Crucial Things You Should Know About Bonds</a>)</p> <h2>How government bonds work</h2> <p>A bond is simply a vehicle that governments and companies use to borrow money. People buy bonds, and in exchange, receive interest payments. Our country would barely be able to function without bonds.</p> <p>For the sake of this discussion, let's focus on government bonds. The U.S. government floats many different securities, but the most common are the 30-year and 10-year Treasury bonds. These bonds pay interest every six months, and the principal of the bond &mdash; often referred to as &quot;par value&quot; &mdash; is paid in full after 30 or 10 years.</p> <p>There are also popular securities called Treasury Inflation-Protected Securities (TIPS). The principal of a TIPS can go up or down depending on the movement of the Consumer Price Index.</p> <p>U.S. Treasuries are very popular worldwide because they are backed by the full faith and credit of the U.S. government, which has historically always repaid its debts.</p> <h2>Yield and price</h2> <p>If you plan to hold onto a bond until it matures, you'll likely want to take a look at its yield, which is simply a calculation of how much money you'll make on the investment. So for example, let's say you have a $10,000 30-year bond with an annual interest rate of 5 percent. This would mean you'd get $500 per year. This is the bond's annual yield. It's also referred to as the &quot;nominal&quot; yield.</p> <p>There's another factor that determines how much money you make from a bond, and that is price.</p> <p>Let's say that the owner of the $10,000 bond above chooses to sell the bond before it matures, for $9,000 &mdash; maybe because the issuing company is struggling to stay afloat, or because interest rates are about to see a substantial rise. The buyer of the bond will still continue to get interest payments based on the face value of the bond ($10,000). These interest payments are fixed.</p> <p>Thus, the buyer is receiving the same payments, but because the buyer paid less for the bond, the yield is 5.55 percent. ($500/$9,000=0.0555, or 5.55 percent).</p> <p>When a bond is selling for more than its issue value, we often hear people say it is trading &quot;at a premium.&quot; If it is selling at less than its issue value, it is selling &quot;at a discount.&quot;</p> <p>Generally speaking, people seek to find bonds selling at a discount, because they result in a higher yield.</p> <h2>Why prices rise and fall</h2> <p>The price of bonds is very closely impacted by interest rates. The prevailing interest rate &mdash; that is, the interest rate on bonds being issued at that particular time &mdash; can make any other bond seem more or less attractive to investors.</p> <p>To illustrate this, let's say you hold a 30-year bond with a 5 percent interest rate, but rates have been rising and now average 6 percent. Because your bond now has an interest rate that is lower than the prevailing average, it's less attractive to investors. Thus, if you want to sell the bond, you may have to lower the price to ensure investors can get the same yield.</p> <p>The opposite is also true. When interest rates are falling, any bond with a higher interest rate becomes more attractive and can demand a higher price.</p> <p>Inflation is known to indirectly impact bond prices because it is accompanied by higher interest rates.</p> <p>Bond prices are also indirectly impacted by the performance of the stock market. When the stock market is doing well, people tend to flock to stocks and their potential for higher returns, which in turn depresses demand and prices for bonds. But during times of economic distress, investors will often flock to the relative safety of bonds and this can cause prices to rise.</p> <h2>Why it matters now</h2> <p>Treasury yields have been on the rise in 2018, with the interest rate on a 30-year Treasury growing from about 2.8 percent at the start of the year to 3.1 percent as of the end of May. The yield on the 10-year Treasury is more than 2.9 percent, compared to 2.4 percent at the start of 2018.</p> <p>There are many reasons why yields have increased, but generally they have to do with confidence in the economy and in the stock market. Treasury yields rise inversely to prices. Thus, a high yield suggests that demand for bonds is weak and that's depressing prices.</p> <p>The trend is only expected to strengthen. The government is predicted to issue a lot of new bonds in 2018 as it looks to cover the cost of new tax cuts. Having more bonds in the market will lower demand for any individual bond, so prices will fall and yields will rise.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=https%3A%2F%2Fwww.wisebread.com%2Fhow-bond-prices-and-yields-work&amp;media=https%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520Bond%2520Prices%2520and%2520Yields%2520Work.jpg&amp;description=How%20Bond%20Prices%20and%20Yields%20Work"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/How%20Bond%20Prices%20and%20Yields%20Work.jpg" alt="How Bond Prices and Yields Work" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="https://www.wisebread.com/how-bond-prices-and-yields-work">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="https://www.wisebread.com/7-reasons-youre-never-too-old-to-buy-stocks">7 Reasons You&#039;re Never Too Old to Buy Stocks</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/7-cool-things-bonds-tell-you-about-the-economy">7 Cool Things Bonds Tell You About the Economy</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="https://www.wisebread.com/how-to-make-sure-you-dont-run-out-of-money-in-retirement">How to Make Sure You Don&#039;t Run Out of Money in Retirement</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/how-the-risk-averse-can-get-into-the-stock-market">How the Risk Averse Can Get Into the Stock Market</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment bonds inflation interest rates price securities stock market tips treasury value yield Wed, 04 Jul 2018 08:30:14 +0000 Tim Lemke 2149349 at https://www.wisebread.com 11 Stock Market Oddities — and How to Exploit Them https://www.wisebread.com/11-stock-market-oddities-and-how-to-exploit-them <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/11-stock-market-oddities-and-how-to-exploit-them" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/two_men_and_woman_holding_arrow.jpg" alt="Two man and woman holding arrow" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It is often said that it's impossible to &quot;beat the market.&quot; There's no magic formula for success. If everyone is trading based on the same information, stocks should always sell for a fair price. At least, that's the idea if markets are what economists call &quot;efficient,&quot; meaning all relevant information is available to all parties at the same time and that prices respond immediately to that information.</p> <p>But sometimes the stock market doesn't behave that way. Stock prices may not actually reflect the underlying asset valuation of the company. This phenomenon is known as a stock market anomaly.</p> <p>Think of anomalies as quirky rules of thumb that don't always hold. For instance, stock prices have been known to rise in the period after Christmas in what's called the Santa Claus rally. Some investors try to take advantage of these trends to pick up extra profit, but of course, the Santa Claus rally doesn't happen every year, so there's risk involved. The same goes for the other types of anomalies.</p> <p>As we've heard before, past performance is no indication of future success. Likewise, there's no guarantee that anomalies will repeat themselves.</p> <p>Nevertheless, it's worth informing yourself about market anomalies so you can decide for yourself whether you want to try to take advantage of them. Here are some of the most common stock market anomalies. (See also: <a href="http://www.wisebread.com/does-skill-really-matter-in-stock-market-investing?ref=seealso" target="_blank">Does Skill Really Matter in Stock Market Investing?</a>)</p> <h2>1. Reversal anomaly</h2> <p>What goes down must eventually come up &mdash; and vice versa. This anomaly states that stocks that are performing very well tend to reverse course the following period and decrease in value. Stocks that are performing poorly follow a similar course &mdash; they tend to increase in value the following period.</p> <p>There are a couple of logical explanations for this behavior. Perhaps investors anticipate that high performing stocks won't perform at that level indefinitely, and start to price in the expectation that they will come down.</p> <p>From a statistical perspective, this anomaly could be an example of <em>regression to the mean</em>, meaning you'll get a more representative average price by examining the data over a longer interval than by looking at the price over a shorter interval in which performance happens to be above or below average.</p> <h2>2. Dogs of the Dow</h2> <p>The Dogs of the Dow theory states that by picking the right subset of stocks in the Dow Jones industrial average, you can beat the market. Investors who try this approach do so by picking the 10 Dow stocks with the highest dividend-to-price ratio. A further refinement is to take the five stocks on that list of 10 that have the lowest stock price, and hold them for a year.</p> <p>Whether the Dogs of the Dow is a consistent phenomenon or not is debatable, but picking underperformers may be an extension of the reversal anomaly; stocks that are performing relatively poorly tend to improve eventually.</p> <h2>3. January effect</h2> <p>The January effect is when stocks that underperformed from October through December suddenly perform better than average come January. A possible explanation for this anomaly is that investors are motivated to sell underperforming stocks at the end of the year to claim a loss to lower capital gains taxes. Once they're done selling, the price rebounds.</p> <p>This is a case where stock price can be affected by factors other than their expected return and risk. The savings on taxes can cause investors to sell underperforming stocks at prices below a logical asset valuation.</p> <h2>4. Santa Claus rally</h2> <p>It is said that the 12 consecutive days starting on Christmas (Dec. 25) produce the best returns of any 12-day period in the market. Investors can try to take advantage of this anomaly by waiting until Christmas to invest, just in time to reap the best returns of the year.</p> <p>However, the Santa Claus rally is not very consistent from year-to-year. It's not clear whether there is a fundamental basis for this anomaly, or whether it's just a coincidence that has happened a few times by chance.</p> <h2>5. Small firm effect</h2> <p>This stock market anomaly states that smaller companies tend to outperform larger ones because their underlying growth rates look better than those of bigger firms. It takes fewer dollars in sales for a small company to generate the same percentage of growth as a larger business. For instance, a small company can grow 10 percent by boosting sales just a few million dollars, but a large company might need to increase sales by billions of dollars to grow the same percentage.</p> <h2>6. Value effect</h2> <p>The value effect says that stocks of companies with below-average price-to-book ratios tend to perform better than other stocks. A company's price-to-book ratio is its share price divided by the value of the company's assets as shown on its balance sheet. The concept behind this anomaly makes intuitive sense &mdash; buying stock at a price that is a good value relative to other stocks should make a better investment.</p> <p>But going too low on a price-to-book ratio can get you stock in a company that is in financial distress. A very low price-to-book ratio indicates that the market knows a business has significant hurdles to overcome to achieve strong profits. You could get much lower than average returns or even lose all of your investment in case of bankruptcy.</p> <h2>7. Days of the week</h2> <p>According to this anomaly, stocks tend to perform better on Fridays than on Mondays. Maybe investors get some enthusiasm and optimism heading into a weekend and are more eager to buy. But on Monday, the trend is reversed after investors have had time to reconsider their investments over the weekend.</p> <p>Does this anomaly mean that you should buy stocks on Friday and sell on Monday to maximize returns? Because this anomaly is not very consistent, you <em>could</em> come out ahead &mdash; or you could lose money, depending your timing.</p> <h2>8. Election-year rally</h2> <p>A few years ago, my investment adviser encouraged me to ramp up my investment contributions during the run-up to the 2004 presidential election. The logic he presented was that elected officials pull out all the stops to try to get the economy fired up in time for an election. If the markets are up, voters are more likely to put their support behind a candidate, so election years generally produce better returns than other years.</p> <p>I took my adviser's advice and boosted my investment contributions, but the market actually went down a little over the three months leading up to the election. Fortunately, I kept my money in the stock market, and there was a rally after President George W. Bush was re-elected. In the recent election of 2016, the market also trended down in the months leading up to the election, but rallied after the election. Based on these two elections, I would say the election-year rally is really that the market goes up right <em>after</em> the election &mdash; instead of in the run up to the election, as my adviser predicted.</p> <h2>9. Turn of the month effect</h2> <p>The turn of the month effect results in stock prices going up on the last day of the month and on the first four days of the following month. The explanation for this is that during this time period, large institutional investors tend to reallocate investments within their funds, liquidating cash assets and using them to buy stocks. That, in turn, drives up stock prices.</p> <h2>10. Momentum effect</h2> <p>The momentum effect occurs when stocks that have recently performed well continue to outperform others for some time. One cause may be that the market doesn't immediately apply updated pricing information into its stock valuations. Another cause may be that some investors are making investment decisions based on past performance rather than current information. If investors keep buying high-performing stocks, the price will keep going up for a while until the market has time to react and apply current information to the stock valuation.</p> <h2>11. Post-earnings announcement momentum</h2> <p>This anomaly refers to the fact that markets sometimes have a delayed response to surprising information revealed in a company's earnings announcement. For example, if a company announces that its earnings surpassed expectations greatly, the price might gradually ramp up rather than jump instantly.</p> <p>An explanation for this anomaly is that the market is not perfectly efficient. It takes investors time to process the new information and react to it, resulting for a time in stock prices that are an anomaly until the market catches up.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=https%3A%2F%2Fwww.wisebread.com%2F11-stock-market-oddities-and-how-to-exploit-them&amp;media=https%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F11%2520Stock%2520Market%2520Oddities%2520%25E2%2580%2594%2520and%2520How%2520to%2520Exploit%2520Them.jpg&amp;description=11%20Stock%20Market%20Oddities%20%E2%80%94%20and%20How%20to%20Exploit%20Them"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/11%20Stock%20Market%20Oddities%20%E2%80%94%20and%20How%20to%20Exploit%20Them.jpg" alt="11 Stock Market Oddities &mdash; and How to Exploit Them" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/dr-penny-pincher">Dr Penny Pincher</a> of <a href="https://www.wisebread.com/11-stock-market-oddities-and-how-to-exploit-them">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="https://www.wisebread.com/why-does-the-stock-market-keep-going-up">Why Does the Stock Market Keep Going Up?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/are-we-headed-toward-a-bull-or-bear-market">Are We Headed Toward a Bull or Bear 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="https://www.wisebread.com/why-the-dow-will-hit-a-million-eventually">Why the Dow Will Hit a Million, Eventually</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/4-ways-to-keep-envy-from-ruining-your-retirement-investments">4 Ways to Keep Envy From Ruining Your Retirement Investments</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/5-creative-ways-to-invest-during-a-weak-market">5 Creative Ways to Invest During a Weak Market</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment anomalies beating the market dow jones industrial average downturns Economy effects efficient markets stock market valuation Tue, 03 Jul 2018 08:30:19 +0000 Dr Penny Pincher 2152289 at https://www.wisebread.com Do You Have These Key Character Traits for Investing Success? https://www.wisebread.com/do-you-have-these-key-character-traits-for-investing-success <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/do-you-have-these-key-character-traits-for-investing-success" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/business_woman_with_piggy_bank_0.jpg" alt="Business woman with piggy bank" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Warren Buffett, the Oracle of Omaha, summed up the key to investing success like this: &quot;Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing.&quot;</p> <p>Let's say you and I have ordinary intelligence and want to improve our investing chops. What are the traits that make for a great investor?</p> <h2>Compassion</h2> <p>Hollywood is awash with stories of money men who live by this mantra: &quot;Greed is good.&quot; The Gordon Gekko character is burned into our collective memories for life. From <em>The Boiler Room</em> to <em>The Wolf of Wall Street</em>, we get it &mdash; the industry is full of sharks.</p> <p>It turns out, sharkiness may work against you in the world of finance.</p> <p>A study published by the Society for Personality and Social Psychology looked at the behavior of hedge fund managers over a decade. Managers with psychopathic, narcissistic, or Machiavellian personalities underperformed their peers by 1 percent annually. Over time, their ruthless approach to decision making added up to notable losses.</p> <p>By avoiding aggressive instincts and underhanded tendencies, we can focus on developing the positive, compassionate traits that have helped billionaire investors like Warren Buffett and George Soros achieve amazing results. This means leaving the shady, cunning type of investor to Hollywood. (See also: <a href="http://www.wisebread.com/the-5-best-pieces-of-financial-wisdom-from-warren-buffett?ref=seealso" target="_blank">The 5 Best Pieces of Financial Wisdom From Warren Buffett</a>)</p> <h2>Optimism</h2> <p>Some people avoid investing altogether because they believe they'll never succeed at it. That mentality can become a self-fulfilling prophecy. Make no mistake; if you never take the plunge into investing, you're guaranteed to never see any returns.</p> <p>Believing that you have the ability to be successful at investing and building wealth is the frame of mind you should always strive for. Whether you endeavor to develop the skills and DIY your approach to investing, or seek the services of a qualified money manager, believing in your ability to make sound financial decisions will help you move forward.</p> <p>Optimism can be hard to sustain, but immersing yourself in a world of productive investment information has never been easier. Connect with groups through Facebook, browse personal finance websites, and follow the advice of investors with a track record of long-term success. Seeing your glass as half-full is great for the bottom line. (See also: <a href="http://www.wisebread.com/6-confidence-inspiring-facts-about-the-stock-market?ref=seealso" target="_blank">6 Confidence-Inspiring Facts About the Stock Market</a>)</p> <h2>Patience</h2> <p>Successful billionaires like Warren Buffett take a long-term approach to investing. &quot;Our favorite holding period is forever,&quot; he's quoted as saying. Patience will help you avoid reacting rashly to groupthink surrounding market fluctuations or hyperbolic headlines predicting the end of life as we know it. You may have done some research and found that the stock market's average annual return is 7 percent when you look at any 10-year period. This information feeds your optimism, and therefore you're willing to be patient. And your patience will help you keep a long-term perspective.</p> <h2>Goal-orientation</h2> <p>Since investing success requires a long-term perspective, goal-oriented people tend to have a leg up in this arena. Staying focused on the end goal helps you avoid distractions. Deciding whether you're investing for retirement, to purchase a house, or to save for a child's college fund will determine your best course of action. Setting interim goals, like completing an investing for beginners class or interviewing three financial planners, keeps goal-oriented people on the path to desired results.</p> <h2>Levelheadedness</h2> <p>Do you keep a cool head when everyone around you is in meltdown mode? Do you immediately default to the next steps required in the midst of a crisis? Your levelheaded temperament may easily be the most important personality predictor of success with investing, not your intellect. That is according to Mr. Warren Buffett.</p> <p>Panic in the markets can be contagious; especially when our hard-earned cash is at stake. Your ability to remain calm in the face of short-term fluctuations will lead to better decisions and opportunities that investors who follow the crowd may overlook. (See also: <a href="http://www.wisebread.com/6-investment-truths-to-remember-when-the-stock-market-is-down?ref=seealso" target="_blank">6 Investment Truths to Remember When the Stock Market Is Down</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fdo-you-have-these-key-character-traits-for-investing-success&amp;media=https%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FDo%2520You%2520Have%2520These%2520Key%2520Character%2520Traits%2520for%2520Investing%2520Success_.jpg&amp;description=Do%20You%20Have%20These%20Key%20Character%20Traits%20for%20Investing%20Success%3F"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/Do%20You%20Have%20These%20Key%20Character%20Traits%20for%20Investing%20Success_.jpg" alt="Do You Have These Key Character Traits for Investing Success?" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/toni-husbands">Toni Husbands</a> of <a href="https://www.wisebread.com/do-you-have-these-key-character-traits-for-investing-success">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="https://www.wisebread.com/5-ways-to-invest-like-a-pro-no-financial-adviser-required">5 Ways to Invest Like a Pro — No Financial Adviser Required</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="https://www.wisebread.com/how-the-risk-averse-can-get-into-the-stock-market">How the Risk Averse Can Get Into the Stock Market</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/heres-how-rich-youd-be-if-youd-invested-500-in-faang-6-years-ago">Here&#039;s How Rich You&#039;d Be If You&#039;d Invested $500 in FAANG 6 Years Ago</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="https://www.wisebread.com/7-underrated-skills-that-will-help-you-in-any-job">7 Underrated Skills That Will Help You in Any Job</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="https://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> </ul> </div> </div> </div> </div><br/></br> Investment compassion goals optimism patience personality traits stock market warren buffet Fri, 22 Jun 2018 08:30:23 +0000 Toni Husbands 2148340 at https://www.wisebread.com How to Start Investing With Just $100 https://www.wisebread.com/how-to-start-investing-with-just-100 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-start-investing-with-just-100" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/iStock-968907694.jpg" alt="holding wallet full of money" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When you're on a tight budget, <em>investing</em> often feels like something only wealthy people can afford to do. If you have just a few dollars left over every month, you might think it's out of reach for someone in your shoes.</p> <p>This is particularly true among young people. A 2016 Stash survey reported that 41 percent of millennials feel that they don't have enough money to invest in the stock market &mdash; and 70 percent feel they need at least $100 to get started. That mentality can be a costly mistake. If you don't invest, you greatly risk underfunding your retirement savings.</p> <p>The thinking that you have to be wealthy to invest is false. There are ways you can get started in investing without having tons of cash on hand. Below, find out more about some low-cost ways to enter the stock market. (See also: <a href="http://www.wisebread.com/you-can-start-investing-with-a-lot-less-money-than-you-think?ref=seealso" target="_blank">You Can Start Investing With a Lot Less Money Than You Think</a>)</p> <h2>5 ways to invest with little money</h2> <p>Many traditional brokers have high minimum investments. For example, Vanguard has a $1,000 minimum if you want to open a Roth IRA and $3,000 for some other accounts. When you have just a few dollars to invest, opening an account with a traditional broker can be impractical, if not impossible.</p> <p>Plus, they can be confusing. They throw a lot of jargon at you &mdash; mutual funds, index funds, exchange-traded funds (ETFs) &mdash; and it can be overwhelming to a new investor. However, investing doesn't have to be overwhelming or expensive. Here's how you can get started. (See also: <a href="http://www.wisebread.com/investments-worth-making-with-50-or-less?ref=seealso" target="_blank">Investments Worth Making With $50 or Less</a>)</p> <h3>1. Invest your spare change</h3> <p>If your budget is tight and finding even $50 a month to invest is impossible for you, spare change investment apps like <a href="https://www.acorns.com/" target="_blank">Acorns</a> might be a smart option.</p> <p>With Acorns, you connect your credit and debit cards to your account. Any purchase you make &mdash; including routine things like groceries or gas &mdash; is rounded up to the next dollar amount and the extra change is invested. For example, if you bought lunch and it cost $6.50, the app would round it up to $7, depositing the extra 50 cents into your investment fund.</p> <p>Once your change totals $5, the app invests that money into a portfolio of your choice. Acorns offers five versions based on your comfort with risk, and costs between $1 and $3 per month to use. (See also: <a href="http://www.wisebread.com/everyones-using-spare-change-apps-are-they-really-worth-it?ref=seealso" target="_blank">Everyone's Using Spare Change Apps &mdash; Are They Really Worth It?</a>)</p> <h3>2. Engage in micro-investing</h3> <p>If you have some extra money in your budget, you can go a step further than just investing your spare change. Micro-investing &mdash; where you invest small amounts &mdash; can help you build a portfolio. <a href="https://www.robinhood.com/" target="_blank">Robinhood</a> is a no-fee micro-investing app you can use to buy stocks and ETFs. All you need to get started is enough money to buy one share. Depending on the company or ETF you choose, that could be as little as $25. (See also: <a href="http://www.wisebread.com/with-micro-investing-your-smartphone-pays-you?ref=seealso" target="_blank">With Micro-Investing, Your Smartphone Pays YOU</a>)</p> <h3>3. Set up a recurring transfer with a robo-adviser</h3> <p>As your income grows and your financial situation improves, investing spare change and micro-investing might not be as effective as it should be. Your investments with those apps might only add up to $15 to $20 per month. That's a good start, but you'll get better results by investing larger amounts.</p> <p>You can set up a recurring transfer with sites like <a href="https://betterment.evyy.net/c/27771/96536/2299" target="_blank">Betterment</a> to take your investments to the next level. Betterment is a robo-adviser service, which can be helpful if you don't know much about the stock market and you want guidance on what kind of stocks and funds to choose. Betterment charges a .25 percent annual fee for accounts under $100,000. (See also: <a href="http://www.wisebread.com/9-questions-you-should-ask-before-hiring-a-robo-adviser?ref=seealso" target="_blank">9 Questions You Should Ask Before Hiring a Robo-Adviser</a>)</p> <p>That recurring $100 per month transfer can pay off in the long run. If you are 25 and make a one-time $100 investment, that $100 would turn into $2,172 by the time you're 65 (assuming an annual return of 8 percent).</p> <p>Continue to contribute month after month, and you can see even more significant returns. If you set up recurring $100 contributions and stuck to that schedule until you were 65, you would have invested $48,000 of your own money. But, thanks to the stock market, your balance would grow to a whopping $337,909. (See also: <a href="http://www.wisebread.com/7-reasons-millennials-should-stop-being-afraid-of-the-stock-market?ref=seealso" target="_blank">7 Reasons Millennials Should Stop Being Afraid of the Stock Market</a>)</p> <h3>4. Set up a CD</h3> <p>If you're not ready to enter the stock market, there's another way to invest: Setting up a certificate of deposit (CD). With a CD, you essentially loan money to a bank, and they pay interest to you on the loan. The returns are higher than that of a regular savings account, however, they still won't be nearly as high as if you'd invested in the markets. You also can't touch that money for a set period of time; usually 12 months or more. (See also: <a href="http://www.wisebread.com/the-best-ways-to-invest-50-500-or-5000?ref=seealso" target="_blank">The Best Ways to Invest $50, $500, or $5,000</a>)</p> <h3>5. Start investing in a 401(k)</h3> <p>If your employer offers a 401(k) plan, you can start investing right away; there's no minimum to open an account. You can set up regular deductions from your paycheck, so the money is invested automatically every single month. You likely won't even notice it.</p> <p>You can start investing small amounts, if that's all you can afford at first. For example, you can set your 401(k) contributions to as little as $25 each pay period. Over time, compound interest can turn those small investments into big returns.</p> <p>As you earn more money, you can increase your monthly contributions. Your employer may even offer a company match on those contributions, which is free money you should never turn down. (See also: <a href="http://www.wisebread.com/8-critical-401k-questions-you-need-to-ask-your-employer?ref=seealso" target="_blank">8 Critical 401(k) Questions You Need to Ask Your Employer</a>)</p> <h2>Finding money to invest</h2> <p>You really can't afford to avoid the stock market if you plan on having a stable retirement. Without the muscle of annual returns, you run the very real risk of coming up short.</p> <p>If you're already stretched thin and can't find any extra money to invest, focus on boosting your income and using that extra cash to get started. You can consider asking for a raise, taking on a side gig, or selling some hot-ticket items around the house. (See also: <a href="http://www.wisebread.com/4-cheap-easy-ways-to-invest-your-first-1000?ref=seealso" target="_blank">4 Best Ways to Invest Your First $1,000</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-start-investing-with-just-100&amp;media=https%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Start%2520Investing%2520With%2520Just%2520%2524100.jpg&amp;description=How%20to%20Start%20Investing%20With%20Just%20%24100"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/How%20to%20Start%20Investing%20With%20Just%20%24100.jpg" alt="How to Start Investing With Just $100" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/kat-tretina">Kat Tretina</a> of <a href="https://www.wisebread.com/how-to-start-investing-with-just-100">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="https://www.wisebread.com/8-startling-facts-that-will-make-you-want-to-invest">8 Startling Facts That Will Make You Want to Invest</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/7-reasons-millennials-should-stop-being-afraid-of-the-stock-market">7 Reasons Millennials Should Stop Being Afraid of 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="https://www.wisebread.com/6-questions-all-rookie-investors-should-ask">6 Questions All Rookie Investors Should Ask</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="https://www.wisebread.com/7-things-you-need-to-know-about-investing-in-company-stock">7 Things You Need to Know About Investing in Company Stock</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="https://www.wisebread.com/5-dumb-401k-mistakes-smart-people-make">5 Dumb 401(k) Mistakes Smart People Make</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment 401(k) CDs certificate of deposit micro investing retirement returns robo advisers spare change apps Wed, 20 Jun 2018 08:30:29 +0000 Kat Tretina 2149479 at https://www.wisebread.com Here's How Rich You'd Be If You'd Invested $500 in FAANG 6 Years Ago https://www.wisebread.com/heres-how-rich-youd-be-if-youd-invested-500-in-faang-6-years-ago <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/heres-how-rich-youd-be-if-youd-invested-500-in-faang-6-years-ago" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/paper_pie_chart_on_a_plate_0.jpg" alt="Paper pie chart on a plate" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Warren Buffett said it best: &quot;Someone's sitting in the shade today because someone planted a tree a long time ago.&quot; One of those big trees in the investing world is FAANG, an acronym for five high-performing technology stocks: Facebook, Apple, Amazon, Netflix, and Google (now Alphabet, Inc.).</p> <p>Let's find out how a cool $500 investment in FAANG would have fared over a six-year investment period.</p> <h2>2012: Off to a good start</h2> <p>Since Facebook held its initial public offering (IPO) on May 18, 2012, this date will be our starting point. And it's a great one because Facebook's IPO at that time was the largest technology IPO in U.S. history, raising more than $16 billion.</p> <p>Let's imagine that you allocated exactly $100 to each one of the FAANG stocks. Assuming that you could buy fractions of shares, here's how many shares of FAANG you would have acquired back on May 18, 2012, rounded to the nearest hundredth. In this and all calculations throughout this article, we'll use the closing price.</p> <ul> <li> <p>Facebook: $100 @ $38.23 per share = 2.61 shares</p> </li> <li> <p>Apple: $100 @ $75.77 per share = 1.32 shares</p> </li> <li> <p>Amazon: $100 @ $213.85 per share = 0.47 shares</p> </li> <li> <p>Netflix: $100 @ $9.99 = 10.01 shares</p> </li> <li> <p>Google: $100 @ $300.50 = 0.33 shares</p> </li> </ul> <p>At the end of 2012, your initial $500 in FAANG would be worth $537, up 7.51 percent mainly due to a 32.43 percent jump in Netflix's stock price over the same period.</p> <h2>2013: Netflix leading the pack</h2> <p>You would have loved watching Netflix's stock price this year, as it went up 297.6 percent year-over-year, closing at $52.60. After 2012, Facebook traded sideways and didn't trade above its IPO price until July 31, 2013. But then it too ended 2013 strong with a 105.30 percent year-over-year increase in price. At the end of 2013, your FAANG portfolio would be worth $1,147.50, up 113.69 percent from the previous year.</p> <h2>2014: A year of stock splits and slow growth</h2> <p>On June 9, 2014, Apple issued its fourth stock split &mdash; this time, a seven-for-one stock split. This means that your 1.32 would have become 9.38 shares. Earlier that year on March 27, 2014, Google executed a 100 percent stock spinoff, which is similar to a two-for-one stock split.</p> <p>All said and done, your portfolio's 2014 year-end value of $1,160.95 ended slightly above that of 2013 (a 1.17 percent year-over-year increase). What caused the small return? On December 31, 2014 the stock prices of Amazon, Netflix, and Google were down 22.18, 7.22, and 4.24 percent respectively from exactly the year before.</p> <h2>FAANG beats the S&amp;P 500 over six years</h2> <p>Let's fast-forward a few years to May 18, 2018 and analyze the performance of our investment in FAANG against the most common stock market bench mark, the S&amp;P 500.</p> <p>Assuming that you were to hold onto your entire $500 FAANG portfolio from May 18, 2012 until May, 18, 2018, your portfolio would have been worth a cool $5,059.62, a whopping 911.92 percent return over the six-year period. If you had put the same $500 investment in the S&amp;P 500 you would have ended with $1,047.30 at the end of the six-year period. That's a very decent 109.46 percent return over the same six-year period, but far below that of the FAANG portfolio.</p> <h2>Should you invest in FAANG?</h2> <p>If it ain't broke, why fix it, right? After all, the FAANG investing strategy continues to pay off in 2018. However, this doesn't mean that you should put your entire nest egg in FAANG. Here are three key caveats when considering an investment in FAANG.</p> <h3>Investment strategy fit</h3> <p>&quot;Does FAANG match my investment strategy?&quot; This is the biggest question that you should ask yourself before considering an investment in FAANG. If you're very close to retirement age, are very adverse to risk, or require a consistent stream of dividend payouts for income, then FAANG stocks may not be right for you. Make sure to first analyze FAANG from the perspective of your portfolio strategy.</p> <h3>Tolerance for volatility</h3> <p>As FAANG companies continue to push the boundaries of technology, the stock market continues to reward their valuation. However, sometimes the pendulum swings in the other direction. Remember the Facebook CEO's testimony before Congress on April 10, 2018 due to privacy concerns? The price of one Facebook share went from a high of $185.09 on March 16, 2018 to $165.04 on April 10, 2018. Could you have stomached a 10.83 percent loss over a 25-day period?</p> <h3>Overexposure to FAANG</h3> <p>If you hold an S&amp;P 500 index fund, you're already exposed to FAANG. Let's assume that you hold the Vanguard 500 Index Fund Investor Shares. By owning one share of this Vanguard index fund, your portfolio has an allocation of 3.7 percent to Apple, 2.8 percent to Amazon, 2.7 percent to Google, and 1.80 percent to Facebook.</p> <p>And that's before taking account any other investments you might hold. If you also have another index fund in the technology sector, you probably have an even greater holding of each one of those investments. For example, the Vanguard Information Technology Index Fund Admiral Shares [Nasdaq: VITAX] has Apple, Amazon, and Google among its top four largest holdings.</p> <p>There are many mutual funds out there that already include Apple, Facebook, Amazon, Google, or Netflix among their holdings. Make sure to consider how much your existing portfolio already has allocated to FAANG before you add even more shares of these high-growth stocks.</p> <h2>How can you invest in FAANG without breaking the bank</h2> <p>With individual shares of Amazon and Google trading at $1,574.37 and $1,066.36, respectively on May 18, 2018, it is impossible to make the same original investment of $500 to buy all five of the individual stocks that make up FAANG as we did in this experiment.</p> <p>Still, there is a simple way to start investing in FAANG: exchange-traded funds (ETFs). Similar to an index fund, an ETF tracks an asset or basket of assets. Unlike an index fund, an ETF can be traded several times throughout the day and doesn't require a minimum investment.</p> <p>There are three key reasons why ETFs make investing in FAANG more approachable for the average investor.</p> <ul> <li> <p>The expense ratio (the percentage of assets deducted each fiscal year for fund expenses) for ETFs is generally lower than that for funds tracking the same type of investment. For example, the Vanguard Growth ETF has a 0.05 percent annual expense ratio, while the average annual expense ratio of similar growth funds is 1.10 percent.</p> </li> <li> <p>Some brokerage houses charge no trading fees when you stick to in-house ETFs. For example, users of the Vanguard Brokerage Account can trade without fees as long as they buy Vanguard ETFs.</p> </li> <li> <p>There is no minimum investment, so you could buy as little as one share of an ETF. Generally, prices for one share of FAANG ETFs range from $10 to a few hundred dollars. This prevents you from putting all your eggs in one basket. Remember that historical returns (even as great as those from FAANG) are no guarantee of future returns. So, you still should diversify your portfolio.</p> </li> </ul> <p>Here's a list of <a href="http://etfdb.com/themes/faang-etfs/" target="_blank">FAANG ETFs</a> to get you started on your research, but make sure to look at other lists as well. Buyer beware: By definition, a FAANG ETF is one that offers an investor at least 1 percent exposure to FAANG stocks. While diversification is great, select an ETF that best matches your target exposure to these five high-growth technology stocks.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fheres-how-rich-youd-be-if-youd-invested-500-in-faang-6-years-ago&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHere%2527s%2520How%2520Rich%2520You%2527d%2520Be%2520If%2520You%2527d%2520Invested%2520%2524500%2520in%2520FAANG%25206%2520Years%2520Ago.jpg&amp;description=Here's%20How%20Rich%20You'd%20Be%20If%20You'd%20Invested%20%24500%20in%20FAANG%206%20Years%20Ago"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/Here%27s%20How%20Rich%20You%27d%20Be%20If%20You%27d%20Invested%20%24500%20in%20FAANG%206%20Years%20Ago.jpg" alt="Here's How Rich You'd Be If You'd Invested $500 in FAANG 6 Years Ago" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="https://www.wisebread.com/heres-how-rich-youd-be-if-youd-invested-500-in-faang-6-years-ago">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="https://www.wisebread.com/10-stocks-every-recent-grad-should-own">10 Stocks Every Recent Grad Should Own</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/7-expensive-stocks-that-are-totally-worth-it">7 Expensive Stocks That Are Totally Worth It</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/the-3-rules-every-mediocre-investor-must-know">The 3 Rules Every Mediocre Investor Must Know</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/why-the-dow-will-hit-a-million-eventually">Why the Dow Will Hit a Million, Eventually</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt">7 Money Moves to Make as Soon as You Conquer Debt</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment alphabet Amazon apple ETFs faang Facebook Google growth netflix return stock market Thu, 31 May 2018 09:00:19 +0000 Damian Davila 2145005 at https://www.wisebread.com Should You Treat Your Social Security Benefits Like a Bond? https://www.wisebread.com/should-you-treat-your-social-security-benefits-like-a-bond <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/should-you-treat-your-social-security-benefits-like-a-bond" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/social_security_card_with_currency_and_dice.jpg" alt="Social Security Card with Currency and Dice" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>As you may know, one of your most important investment decisions has to do with <em>asset allocation </em>&mdash; that is, how much of your portfolio should be invested in various asset classes, such as stocks and bonds. The optimal answer has mostly to do with your age and risk tolerance.</p> <p>When you're young, you have time to ride out the market's ups and downs, so it's generally best to tilt your portfolio toward riskier but potentially more rewarding investments, such as stocks. As you get older, it's wise to change that mix, reducing your stock exposure and increasing your use of less volatile investments, such as bonds.</p> <p>Your risk tolerance also plays a role. If you're comfortable with risk, that may point you toward a more stock-heavy portfolio. If you prefer the safer side of the spectrum, you may want a more conservative investment mix.</p> <p>But here's where our esoteric-sounding opening question comes in: What if you could put a present value on your future Social Security benefits? And what if you added that amount to your current investment portfolio? That would make your portfolio much larger, and it would change how you're investing, which is exactly what investing legend and Vanguard Founder Jack Bogle recommends. (See also: <a href="http://www.wisebread.com/the-basics-of-asset-allocation?ref=seealso" target="_blank">The Basics of Asset Allocation</a>)</p> <h2>Running the numbers</h2> <p>Let's say you have investments totaling $450,000 and your optimal asset allocation is 60 percent stocks and 40 percent bonds. That means you should have $270,000 invested in stocks and $180,000 in bonds.</p> <p>Let's also assume your estimated Social Security benefits will be $1,250 per month, or $15,000 per year, beginning at age 67 (you can see your estimated benefits by making an account the Social Security Administration's <a href="https://secure.ssa.gov/RIL/SiView.do" target="_blank">website</a>). This exercise also requires that you make an assumption about your life expectancy; let's assume you'll live another 20 years after you start collecting Social Security.</p> <p>Bogle would suggest valuing your portfolio at $750,000. That's $450,000 of <em>actual</em> investments plus $300,000 of assumed future Social Security benefits ($15,000 per year times 20 years). There are other ways of determining the present value of your future benefits, but taking the annual estimated benefit amount and multiplying it by the number of years you expect to live after starting to claim benefits is the simplest.</p> <p>Applying a 60/40 allocation to your newly inflated $750,000 portfolio would mean your optimal investment mix is $450,000 in stocks and $300,000 in bonds. Bogle suggests that since Social Security is a virtually guaranteed benefit, that $300,000 &quot;asset&quot; is a <em>conservative </em>asset &mdash; more like a bond than a stock. That means you're free to invest your entire actual $450,000 portfolio in stocks. (See also: <a href="http://www.wisebread.com/7-reasons-youre-never-too-old-to-buy-stocks?ref=seealso" target="_blank">7 Reasons You're Never Too Old to Buy Stocks</a>)</p> <h2>What could go wrong?</h2> <p>Proponents of this idea, such as Bogle, point out that the much more aggressive approach it would enable you to take with your actual investments would give you the potential to grow your nest egg much larger. Historically, stocks have far outperformed bonds, so in theory that's correct.</p> <p>However, it would also mean taking on much more risk than you are right now and having to endure much more volatility than you may be comfortable with, especially as you get older. For example, how would you like to be 65 years old, have your entire retirement portfolio invested in equities, go through a bear market similar to 2008, and lose 50 percent?</p> <p>Plus, let's say that leaving an inheritance is important to you. What if you go through a 2008-style bear market when you're in your 60s or 70s and that assumption you made about living to age 87 doesn't work so well? The only part of your portfolio that would be left behind is your <em>actual </em>portfolio, which just got cut in half.</p> <p>What about the rest of your portfolio &mdash; the $300,000 of future Social Security benefits? The minute you die, the value of those benefits drops to $0. Are you comfortable with that?</p> <p>One more concern is whether Social Security will even exist by the time you retire. While it's hard to imagine the organization ever completely disappearing, it's much easier to envision a day when benefits will be reduced based on household income &mdash; so-called means testing. The amount of money current workers are paying into the program simply isn't enough to continue paying beneficiaries the full amount they are owed indefinitely.</p> <h2>Not for the faint of heart</h2> <p>Only if you are extremely risk tolerant should you consider factoring future Social Security benefits into your asset allocation. Even then, you would be wise to factor in only a <em>portion</em> of those benefits.</p> <p>For most, however, because of the added stress this approach would bring, especially at a time of life when peace of mind will be increasingly important, it probably doesn't make sense.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fshould-you-treat-your-social-security-benefits-like-a-bond&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FShould%2520You%2520Treat%2520Your%2520Social%2520Security%2520Benefits%2520Like%2520a%2520Bond_.jpg&amp;description=Should%20You%20Treat%20Your%20Social%20Security%20Benefits%20Like%20a%20Bond%3F"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/Should%20You%20Treat%20Your%20Social%20Security%20Benefits%20Like%20a%20Bond_.jpg" alt="Should You Treat Your Social Security Benefits Like a Bond?" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="https://www.wisebread.com/should-you-treat-your-social-security-benefits-like-a-bond">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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="https://www.wisebread.com/why-playing-it-safe-with-your-money-is-actually-risky">Why Playing It Safe With Your Money Is Actually Risky</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/how-the-risk-averse-can-get-into-the-stock-market">How the Risk Averse Can Get Into the Stock Market</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/7-reasons-youre-never-too-old-to-buy-stocks">7 Reasons You&#039;re Never Too Old to Buy Stocks</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/8-types-of-investors-which-one-are-you">8 Types of Investors — Which One Are You?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/5-essentials-for-building-a-profitable-portfolio">5 Essentials for Building a Profitable Portfolio</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement asset allocation benefits portfolio predictions risk social security stock market tolerance volatility Thu, 17 May 2018 08:30:19 +0000 Matt Bell 2138949 at https://www.wisebread.com 7 Ways to Compare Stock Market Investments https://www.wisebread.com/7-ways-to-compare-stock-market-investments <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-ways-to-compare-stock-market-investments" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/man_uses_a_paper_fortune_teller_to_make_multiple_decisions.jpg" alt="Man uses a paper fortuneteller to make multiple decisions" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When investing, we are faced with an overwhelming menu of things to choose from. There are tens of thousands of stocks, a mind-boggling number of mutual funds and ETFs, plus a dizzying array of bonds. How can we make sense of any of this to decide what makes a good investment?</p> <p>It helps to know the basic elements of an investment so you know how to compare one product to another. This may require some work, but it can often be fun to dig into the details of why one investment is better than another. Here are some key things to examine.</p> <h2>1. Growth potential</h2> <p>Most people that are far away from retirement age seek investments that will grow over time. Ideally, they're looking for investments that will allow them to build a sizable retirement fund and outpace the returns offered by a basic bank account. There are some investments, such as stocks, that historically rise in value and are great for younger investors. Mutual funds and ETFs can offer solid growth as well. Bonds, however, are more likely to offer lower, but more stable returns.</p> <p>As you become savvier in grasping the inner workings of specific investments, you can become skilled at knowing when an investment is undervalued and perhaps poised for big growth &mdash; or overvalued and ready for a price decline. Understanding the growth potential in certain investments can help you find the right mix for your individual portfolio. (See also: <a href="http://www.wisebread.com/9-ways-to-tell-if-a-stock-is-worth-buying?ref=seealso" target="_blank">9 Ways to Tell If a Stock Is Worth Buying</a>)</p> <h2>2. Sector and industry</h2> <p>If you don't know a lot about a stock investment at first, it helps to learn what the company does to make its money. Companies are grouped into sectors based on the type of business they operate in; within sectors, there are smaller segments called industries. Typically, stocks are grouped into 11 different sectors &mdash; including health care, financials, energy, and consumer staples, to name a few &mdash; and there can be anywhere from two to 15 industries in each sector. A well-balanced stock portfolio will have some exposure to all of these sectors and as many of these industries as possible.</p> <p>When investing, it helps to learn how these sectors perform compared to the broader stock market. Some sectors perform better than the market, while others underperform. Some are resilient in tough economic times, while others are more vulnerable to bad news. Understanding these industries can help you make smart comparisons when evaluating stocks.</p> <h2>3. Market capitalization and asset class</h2> <p>Stocks are usually categorized by size, also referred to as market capitalization. A company's market capitalization, or market cap, refers to the value of all outstanding shares (which is its stock price multiplied by the total number of shares outstanding).</p> <p>There are large-cap stocks, which comprise the largest publicly traded companies. There are mid-cap stocks, which are medium-sized firms. And there are small-cap and even micro-cap stocks, comprising smaller companies. These categories are also called asset classes.</p> <p>Generally speaking, large-cap stocks offer solid, steady growth potential for shareholders. Shares of smaller companies can offer bigger returns, but may also be riskier investments. Understanding the unique characteristics of stocks in each asset class can help you make comparisons between investments and find stocks that make sense for your financial goals.</p> <h2>4. Risk and volatility</h2> <p>Stocks of smaller companies can be riskier than some other investments. Understanding risk &mdash; and your own tolerance for it &mdash; can help you compare investments with confidence.</p> <p>It's important to note that the potential for higher returns comes with the potential for higher risk. Finding that risk-reward sweet spot is the key to successful investing. Too much risk can result in you losing a lot of money. Avoiding risk altogether may prevent you from getting the returns needed to reach your financial goals.</p> <p>Volatility and risk go hand in hand. When an investment goes up and down in value rapidly, we often say it's a volatile investment. There are ways to make money off that volatility, but for most investors, it's best to see steadier, consistent returns. (See also: <a href="http://www.wisebread.com/how-the-risk-averse-can-get-into-the-stock-market?ref=seealso" target="_blank">How the Risk Averse Can Get Into the Stock Market</a>)</p> <h2>5. Earnings, and earnings per share</h2> <p>Companies make money. They also spend it. When companies make more money than they spend, that's usually a good thing for everyone, including investors. This extra money is often referred to as net earnings. And as an investor, you want to see earnings increase over time.</p> <p>When comparing two companies in the same industry, it can help to examine earnings to see which may be doing better financially. But it's also important to look at earnings in the context of a company's size. To do this, simply take the earnings total and divide it by the number of shares outstanding. So, a company with $9 million in earnings and 20 million shares would have earnings per share of 45 cents. (See also: <a href="http://www.wisebread.com/beginners-guide-to-reading-a-stock-table?ref=seealso" target="_blank">Beginner's Guide to Reading a Stock Table</a>)</p> <h2>6. Financial news</h2> <p>Sometimes, just paying attention to the headlines can help you grasp whether an investment is a good one or not. Financial news can let you know of macroeconomic trends that may help or hurt certain investments, and update you on specific news regarding companies or products. When trying to decide between investments, do a quick news search to see if there's anything big you need to know. You don't have to go overboard; you can overwhelm yourself reading financial magazines and watching CNBC all day. But staying generally informed can certainly be helpful.</p> <h2>7. Dividends and dividend yields</h2> <p>Many companies choose to distribute earnings to shareholders on a quarterly basis. This is great if you are a shareholder, because it's free income just for owning shares. When examining dividends, you should look at both the amount of the dividend and the &quot;yield,&quot; which is the amount when compared to the share price.</p> <p>For example, a company may pay shareholders 50 cents per share they own every quarter. That's the dividend yield. If shares of the company are priced at $35, the yield is about 1.4 percent per quarter, or 5.6 percent annually. When examining dividends, look to see if a company has a history of maintaining or even increasing dividends each year. If they do, that's a sign of a company on strong financial footing.</p> <p>Keep in mind that if a company doesn't distribute dividends, that's not necessarily a bad thing. Many fast-growing companies choose to instead reinvest their earnings into business operations, and this can often help boost growth and make the company more valuable over time. Amazon may be the best example of a strong company that does not pay dividends.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F7-ways-to-compare-stock-market-investments&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F7%2520Ways%2520to%2520Compare%2520Stock%2520Market%2520Investments.jpg&amp;description=7%20Ways%20to%20Compare%20Stock%20Market%20Investments"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/7%20Ways%20to%20Compare%20Stock%20Market%20Investments.jpg" alt="7 Ways to Compare Stock Market Investments" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="https://www.wisebread.com/7-ways-to-compare-stock-market-investments">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/9-ways-to-tell-if-a-stock-is-worth-buying">9 Ways to Tell If a Stock is Worth Buying</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/the-3-rules-every-mediocre-investor-must-know">The 3 Rules Every Mediocre Investor Must Know</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/beginners-guide-to-reading-a-stock-table">Beginner&#039;s Guide to Reading a Stock Table</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/dont-be-fooled-by-an-investments-rate-of-return">Don&#039;t Be Fooled by an Investment&#039;s Rate of Return</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://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 comparing investments dividends earnings ETFs historical performance market capitalization mutual funds returns stocks volatility Mon, 23 Apr 2018 08:30:09 +0000 Tim Lemke 2130606 at https://www.wisebread.com Best Money Tips: How to Start Trading Cryptocurrency https://www.wisebread.com/best-money-tips-how-to-start-trading-cryptocurrency <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-how-to-start-trading-cryptocurrency" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/bitcoin_cryptocurrency_930264196.jpg" alt="Learning how to trade cryptocurrency" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="http://www.wisebread.com/topic/best-money-tips">Best Money Tips</a> Roundup! Today we found articles on cryptocurrency trading for beginners, how to build a minimalist pantry, and tips for planning a debt-free vacation.</p> <h2>Top 5 Articles</h2> <p><a href="https://www.dumblittleman.com/cryptocurrency-trading-for-beginners/">Cryptocurrency Trading for Beginners: How Can You Get Started?</a> &mdash; Know your options and the best investment strategies for cryptocurrency. [Dumb Little Man]</p> <p><a href="https://www.raisingsimple.com/minimalist-pantry/">How to Build a Minimalist Pantry</a> &mdash; Creating an efficient pantry requires setting new rules for a new system. It may feel clunky at first, but once you get the rhythm down, it's hardly any work to keep it tidy and well-stocked. [Raising Simple]</p> <p><a href="https://couplemoney.com/travel/debt-free-vacations-how-to-do-it/">Planning For Your Debt Free Vacation</a> &mdash; A debt-free vacation starts with a lot of planning and discussion. [Couple Money]</p> <p><a href="https://organizingmoms.com/easy-budget-envelope-trick/">The Easy Envelope System That Will Simplify Your Budget</a> &mdash; You can use this envelope system not only with cash, but with credit/debit cards or checks, too. [Organizing Moms]</p> <p><a href="https://timemanagementninja.com/2018/04/5-tips-to-build-a-free-time-savings-account/">5 Tips to Build a Free Time Savings Account</a> &mdash; Working ahead and getting things done early allows you to stay on top of your commitments and have a safe buffer of time to handle unexpected curveballs. [Time Management Ninja]</p> <h2>Other Essential Reading</h2> <p><a href="https://www.popsugar.com/smart-living/Free-Printable-Goal-Sheets-44467993">16 Printable Goal Sheets to Help You Stay on Track This Year</a> &mdash; Some of these printables help you track your progress, while others will make your objectives more actionable. [PopSugar Smart Living]</p> <p><a href="https://thetinylife.com/guide-to-dehydrating-food/">Your Complete Guide to Dehydrating Food</a> &mdash; Dehydration and canning are two popular food preservation methods, but dehydration is especially great because it's cheaper and easier for beginners than canning. [The Tiny Life]</p> <p><a href="https://www.getrichslowly.org/building-confidence/">How to build confidence and destroy fear</a> &mdash; Irrational fears and anxieties prevent you from enjoying life, but action is the antidote to fear. [Get Rich Slowly]</p> <p><a href="https://orgjunkie.com/2018/04/manage-spring-cleaning-chores.html">The Less Overwhelming Way to Manage Spring Cleaning Chores</a> &mdash; Cleaning isn't most people's idea of fun, but it's necessary. You can add systems and routines into your life to make sure the cleaning chores actually get done. [Organizing Junkie]</p> <p><a href="https://www.csmonitor.com/Technology/2018/0413/Researchers-develop-autonomous-vehicles-to-help-the-blind">Researchers develop autonomous vehicles to help the blind</a> &mdash; Researchers outside of the auto industry are developing data and software in an effort to meet the needs of the visually impaired when autonomous cars become commonplace. [The Christian Science Monitor]</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/amy-lu">Amy Lu</a> of <a href="https://www.wisebread.com/best-money-tips-how-to-start-trading-cryptocurrency">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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="https://www.wisebread.com/what-is-cryptocurrency-anyway">What Is Cryptocurrency, Anyway?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/non-financial-investments">Non-financial investments</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/2-investing-concepts-everyone-should-know">2 Investing Concepts Everyone Should Know</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/9-investing-questions-youre-too-embarrassed-to-ask">9 Investing Questions You&#039;re Too Embarrassed to Ask</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment best money tips cryptocurrency Wed, 18 Apr 2018 08:30:10 +0000 Amy Lu 2133241 at https://www.wisebread.com Best Money Tips: Investing Rules You Should Know By Heart https://www.wisebread.com/best-money-tips-investing-rules-you-should-know-by-heart <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-investing-rules-you-should-know-by-heart" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/investing_money_illustration_908628566.jpg" alt="Learning important investment rules" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="http://www.wisebread.com/topic/best-money-tips">Best Money Tips</a> Roundup! Today we found articles on investing rules you should know by heart, the best fad diets that actually work, and smart things to do with your tax refund.</p> <h2>Top 5 Articles</h2> <p><a href="https://www.usatoday.com/story/money/personalfinance/retirement/2018/04/06/5-investing-rules-you-should-know-by-heart/33460455/">5 investing rules you should know by heart</a> &mdash; Don't invest every spare dollar you have. While investing is important, you also need to have accessible cash for the next two years' expenses. [USA Today]</p> <p><a href="https://www.lifehack.org/698429/fad-diets-worth-the-hype">The Top Fad Diets That Are Actually Worth the Hype</a> &mdash; Most fad diets come and go in the blink of an eye, but these have actually passed the test of time. [Lifehack.org]</p> <p><a href="https://www.fromfrugaltofree.com/what-to-do-with-your-tax-refund/">Three Things To Do With Your Tax Refund</a> &mdash; Here are three things you can do with your tax refund that will lead to a healthier financial life. [From Frugal To Free]</p> <p><a href="https://www.popsugar.com/smart-living/Bedroom-Organization-Tips-22309085">11 Simple Tips For Bedroom Organization</a> &mdash; Invest in tall furniture that gives you vertical storage without taking up much space. [PopSugar Smart Living]</p> <p><a href="https://everythingfinanceblog.com/24279/insourcing-save-money.html">Insourcing 101: 5 Things You Can Do On Your Own To Save Money</a> &mdash; When you pay someone to do something for you, is it because you don't have the time to do it yourself, or is it because you don't know how? [Everyday Finance]</p> <h2>Other Essential Reading</h2> <p><a href="https://ryanholiday.net/14-ways-to-make-journaling-one-of-the-best-things-you-do-in-2018/">14 Ways To Make Journaling One Of The Best Things You Do In 2018</a> &mdash; Not everyone has an easy time journaling, but there's no denying the benefits of this habit. Follow these tips and best practices to help you get in to journaling and do it well. [Ryan Holiday]</p> <p><a href="http://www.thefrugalgirl.com/2018/04/tuesday-tip-store-leftover-paint-in-food-jars/">Store leftover paint in food jars</a> &mdash; Save leftover paint in glass food jars or plastic food containers. This allows you to save space, and the sealed containers ensure that your paint won't dry out. [The Frugal Girl]</p> <p><a href="http://www.marcandangel.com/2018/04/08/31-five-second-reminders-that-will-make-calmness-your-superpower/">31 Five-Second Reminders that Will Make Calmness Your Superpower</a> &mdash; These simple reminders can help you stay calm throughout the day. [Marc &amp; Angel Hack Life]</p> <p><a href="https://www.getorganizedwizard.com/blog/2018/04/10-tips-to-get-your-home-organized-when-on-a-budget/">9 Tips To Get Your Home Organized When On A Budget</a> &mdash; Organize the items in a messy drawer with a metal or plastic meal tray. [Get Organized Wizard]</p> <p><a href="http://www.asianefficiency.com/motivation/5-ways-turn-unproductive-day-around/">5 Ways to Turn an Unproductive Day Around</a> &mdash; It's easy to give up on days where you do everything right but everything still goes wrong. But before you do, try these strategies to turn your day around. [Asian Efficiency]</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/amy-lu">Amy Lu</a> of <a href="https://www.wisebread.com/best-money-tips-investing-rules-you-should-know-by-heart">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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="https://www.wisebread.com/5-investing-basics-that-can-make-you-rich">5 Investing Basics That Can Make You Rich</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/non-financial-investments">Non-financial investments</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/2-investing-concepts-everyone-should-know">2 Investing Concepts Everyone Should Know</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/9-investing-questions-youre-too-embarrassed-to-ask">9 Investing Questions You&#039;re Too Embarrassed to Ask</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment best money tips investing rules Fri, 13 Apr 2018 08:30:10 +0000 Amy Lu 2131481 at https://www.wisebread.com Best Money Tips: Turning Your Home Into an Investment https://www.wisebread.com/best-money-tips-turning-your-home-into-an-investment <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-turning-your-home-into-an-investment" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/couple_outside_house_905899112.jpg" alt="Couple turning their home into an investment" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="http://www.wisebread.com/topic/best-money-tips">Best Money Tips</a> Roundup! Today we found articles on how to turn your home into an investment, how to choose the right accountability partner to help you reach your goals, and a guide to finding land for your tiny house.</p> <h2>Top 5 Articles</h2> <p><a href="https://everythingfinanceblog.com/24226/turn-your-home-into-an-investment.html">How to Turn Your Home Into an Investment</a> &mdash; Even if you're not looking to make some extra income with your home, you can still do a few things to build equity in case you decide to sell one day or have to take out a second mortgage. [Everything Finance]</p> <p><a href="https://adebtfreestressfreelife.com/accountability-partner/">How To Choose The Right Accountability Partner</a> &mdash; When you're trying to adopt new habits or change an aspect of your life, it helps to have an accountability partner who will help you stay on track. [A Mess Free Life]</p> <p><a href="https://thetinylife.com/the-ultimate-guide-to-finding-land/">The Ultimate Guide To Finding Land for Your Tiny House or Homestead</a> &mdash; Finding and buying land suitable for your tiny house or homestead can be tricky. To figure out how much land you actually need, make a list of everything you want to do on that land and how much space it requires. [The Tiny Life]</p> <p><a href="http://www.newminimalism.com/blog/how-to-be-a-minimalist-with-a-newborn">6 Ways to Stay Simple and Sane With a Newborn</a> &mdash; Don't try to buy all your baby supplies ahead of time. Your child may surprise you with their preferences, and your own preferences and needs will evolve, too. [New Minimalism]</p> <p><a href="https://www.becomingminimalist.com/20-places-to-donate-used-books/">20 Places to Donate Used Books</a> &mdash; Here are places you can donate your books where they will continue to enrich and improve other people's lives &mdash; just remember to call ahead to make sure your books are actually needed. [Becoming Minimalist]</p> <h2>Other Essential Reading</h2> <p><a href="https://www.getrichslowly.org/quick-wins/">Quick money wins to help you feel more in control of your finances</a> &mdash; These quick wins will give you the financial confidence you need to make better money decisions in the long run. [Get Rich Slowly]</p> <p><a href="https://www.dumblittleman.com/improve-it-skills/">6 Ways to Constantly Improve IT Skills</a> &mdash; Technology is always developing&hellip;and so should your IT skills. [Dumb Little Man]</p> <p><a href="https://www.pickthebrain.com/blog/9-tips-on-how-to-overcome-fear-of-public-speaking-for-introverts/">9 Tips on How to Overcome Fear of Public Speaking for Introverts</a> &mdash; Remember to smile! It's a good way to connect with your audience and can help you feel less stressed. [Pick The Brain]</p> <p><a href="http://nourishingminimalism.com/blog/minimalist-playroom-better-kids/">Why a Minimalist Playroom is Better for Kids</a> &mdash; When it comes to toys, less is often more beneficial for your kids. [Rachel Jones]</p> <p><a href="https://www.morewithlesstoday.com/recycle-donate-or-sell-old-gadgets/">Places to Recycle, Donate or Sell Old Gadgets &ndash; Cash in on Spring Cleaning</a> &mdash; Some places allow you to trade in or cash out your old electronics like computers, cellphones, digital cameras, video games, and printers. [More With Less Today]</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/amy-lu">Amy Lu</a> of <a href="https://www.wisebread.com/best-money-tips-turning-your-home-into-an-investment">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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="https://www.wisebread.com/5-investing-basics-that-can-make-you-rich">5 Investing Basics That Can Make You Rich</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/real-estate-investing-is-cheaper-and-easier-than-you-think">Real Estate Investing Is Cheaper and Easier Than You Think</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="https://www.wisebread.com/is-real-estate-a-good-investment">Is Real Estate a Good Investment?</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="https://www.wisebread.com/what-is-keeping-you-from-a-life-of-financial-independence">What is keeping you from a life of financial independence?</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="https://www.wisebread.com/tradeking-review-the-best-brokerage-for-new-and-intermediate-investors">TradeKing Review: The Best Brokerage for New and Intermediate Investors?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Real Estate and Housing best money tips investment Fri, 06 Apr 2018 08:30:09 +0000 Amy Lu 2129031 at https://www.wisebread.com 6 Investment Truths to Remember When the Stock Market Is Down https://www.wisebread.com/6-investment-truths-to-remember-when-the-stock-market-is-down <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-investment-truths-to-remember-when-the-stock-market-is-down" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/stock_market_has_a_bad_day.jpg" alt="Stock market has a bad day" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Forget Halloween &mdash; February 5, 2018 stands as the new scariest day. On that day, the Dow Jones industrial average (DJIA) plunged almost 1,600 points, marking its biggest point decline in history during a trading day. If you felt like you wanted to sell off all of your stocks and take the money, you were not alone. Still, it's at times like these that you need to keep a cool head and stick to your original financial plan. Here are a few things to remember when the stock market takes another dive. (See also: <a href="http://www.wisebread.com/6-confidence-inspiring-facts-about-the-stock-market?ref=seealso" target="_blank">6 Confidence-Inspiring Facts About the Stock Market</a>)</p> <h2>1. Historical average return of stocks is close to 10 percent</h2> <p>Take it from Sir John Templeton, who created one of the world's largest and most successful international investment funds: &quot;The four most dangerous words in investing are 'This time it's different.'&quot; (See also: <a href="http://www.wisebread.com/14-of-the-coolest-sayings-about-investing" target="_blank">14 of the Coolest Sayings About Investing</a>)</p> <p>While losing 1 percent of your 401(k) balance on a single day may seem terrible, the reality is that it's probably going to be a small hiccup on an ever-increasing journey. The average return of the S&amp;P 500 from 1968 to 2017 was 10.05 percent. Even when you take a look at a smaller period of time, this benchmark of the health of the overall stock market performs quite well. The S&amp;P 500's average return for the 2008&ndash;2017 period was 8.42 percent.</p> <h2>2. The longer the holding period, the higher the average return</h2> <p>The concept of &quot;buy and hold&quot; has been around for quite some time, and it's a key thing to remember when the market looks rocky. Experts have long recommended riding out the rough times.</p> <p>&quot;The market pays a premium to those willing to endure the angst of watching their net worth fluctuate beyond what Wall Streeters call the 'sleeping point,'&quot; wrote former Federal Reserve Chairman Alan Greenspan. (See also: <a href="http://www.wisebread.com/3-pearls-of-financial-wisdom-from-alan-greenspan?ref=seealso" target="_blank">3 Pearls of Financial Wisdom From Alan Greenspan</a>)</p> <p>Warren Buffett, better known as The Oracle of Omaha, famously echoed the sentiment: &quot;If you aren't willing to own a stock for 10 years, don't even think about owning it for 10 minutes.&quot; (See also: <a href="http://www.wisebread.com/the-5-best-pieces-of-financial-wisdom-from-warren-buffett?ref=seealso" target="_blank">The 5 Best Pieces of Financial Wisdom From Warren Buffett</a>)</p> <p>Here's an example of why buy-and-hold holds true: The S&amp;P 500 index increased 21.64 percent and 102.50 percent during the 2016&ndash;2017 and 2000&ndash;2017 periods, respectively. In investing, it truly pays off to go the distance.</p> <h2>3. Great time to pick up bargains</h2> <p>Think about the last time that you bought that new car, fancy new outfit, or high-tech 4K TV that you're so proud of. You probably spent days watching like a hawk for the moment that a deal would come up. When it did, you jumped on it. So, why would buying equities be any different? Wouldn't you also want to buy a share of a well-diversified portfolio or the stock of a great company at a discount?</p> <p>If you keep in mind that the historical returns of stocks is close to 10 percent and you're planning to buy equities anyway, do consider buying when stock prices are low. After all, you have heard of &quot;buy low, sell high,&quot; right?</p> <h2>4. Tolerance to risk changes over time</h2> <p>From tying the knot, to buying your first home, to being just five years away from retirement, several milestones will affect your perspective on life. And investing is no exception. If a market downswing hurt more than it did five, 10, or 15 years ago, you should revisit your portfolio allocation.</p> <p>There is a plethora of investment options, including bonds, annuities, and mutual funds. If you feel that you need to dial down your exposure to stocks, you can allocate those funds to financial vehicles better suited to your updated view on life and investing. (See also: <a href="http://www.wisebread.com/the-basics-of-asset-allocation?ref=seealso" target="_blank">The Basics of Asset Allocation</a>)</p> <h2>5. Trading triggers fees (most of the time)</h2> <p>A 2018 survey from TD Ameritrade found that more than 75 percent of Americans don't know how much they're paying in 401(k) fees. Even worse, 37 percent of those respondents mistakenly believe that they don't pay any 401(k) fees at all. The reality is that all 401(k) plan holders pay some type of fee.</p> <p>And trading can trigger many of these fees. For example, a fund may have a redemption fee that requires you to hold on to shares of that fund for a minimum period of time or be hit with a fee ranging from 0.01 to 2 percent of the transaction value. Firing away trades without awareness of applicable fees can backfire by setting back your 401(k) balance even further. (See also: <a href="http://www.wisebread.com/watch-out-for-these-5-sneaky-401k-fees?ref=seealso" target="_blank">Watch Out for These 5 Sneaky 401K Fees</a>)</p> <h2>6. Sell based on an objective reason</h2> <p>So far, we have discussed reasons why you should hold on to your stocks or even buy more. But there will be times that you will have a valid reason to sell your equities during a market downturn. Here are a few examples:</p> <ul> <li> <p>Tax loss harvesting: In a year that you're expecting a large tax liability, you could take a hit on realized losses on your investments and offset taxes on both gains and income.</p> </li> <li> <p>Portfolio rebalancing: Balances on specific asset classes fluctuate over time as prices go up and own. So, it may be necessary to do a couple of trades to readjust your portfolio back to its original asset allocation.</p> </li> <li> <p>Dramatic change in company policy: Let's imagine that you bought a stock purely because its board of directors had provided a dividend every quarter for the last 10 years. If the company's board were to suddenly do away with the dividend, would you still want to own it?</p> </li> </ul> <p>Just because the stock market goes up and down doesn't mean that you need to make a move. Stick to your original financial strategy and remember that stocks do outperform most types of investments in the long run. This may mean tuning out from the financial news for a while so it doesn't play into your fears. In the long term, you should do just fine. (See also: <a href="http://www.wisebread.com/want-your-investments-to-do-better-stop-watching-the-news?ref=seealso" target="_blank">Want Your Investments to Do Better? Stop Watching the News</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-investment-truths-to-remember-when-the-stock-market-is-down&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%2520Investment%2520Truths%2520to%2520Remember%2520When%2520the%2520Stock%2520Market%2520Is%2520Down.jpg&amp;description=6%20Investment%20Truths%20to%20Remember%20When%20the%20Stock%20Market%20Is%20Down"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/6%20Investment%20Truths%20to%20Remember%20When%20the%20Stock%20Market%20Is%20Down.jpg" alt="6 Investment Truths to Remember When the Stock Market Is Down" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="https://www.wisebread.com/6-investment-truths-to-remember-when-the-stock-market-is-down">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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="https://www.wisebread.com/why-the-dow-will-hit-a-million-eventually">Why the Dow Will Hit a Million, Eventually</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/how-too-much-investment-diversity-can-cost-you">How Too Much Investment Diversity Can Cost You</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/why-does-the-stock-market-keep-going-up">Why Does the Stock Market Keep Going Up?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/8-surprising-ways-confidence-can-hurt-your-investments">8 Surprising Ways Confidence Can Hurt Your Investments</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/5-investment-moves-that-prove-youre-finally-a-grown-up">5 Investment Moves That Prove You&#039;re Finally a Grown-Up</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment buy and hold buy low djia dow jones industrial average fees market downturn panic risk worry Tue, 20 Mar 2018 10:00:05 +0000 Damian Davila 2116909 at https://www.wisebread.com Best Money Tips: Essential Tips to Manage Your 401(k) https://www.wisebread.com/best-money-tips-essential-tips-to-manage-your-401k <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-essential-tips-to-manage-your-401k" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/401k_piggy_bank_645234372.jpg" alt="Finding ways to manage a 401(k)" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="http://www.wisebread.com/topic/best-money-tips">Best Money Tips</a> Roundup! Today we found articles on tips for managing your 401(k), steps you can take to get your tax refund ASAP, and how to hustle as a new parent.</p> <h2>Top 5 Articles</h2> <p><a href="https://www.moneyunder30.com/essential-tips-to-manage-your-401k">6 Essential Tips to Manage Your 401(k)</a> &mdash; Increase your contribution by 1-5 percent, then set it up to increase by 1 percent annually. You'll hardly notice the difference in your paycheck, but it'll have a big impact on your portfolio down the road. [Money Under 30]</p> <p><a href="https://wallethacks.com/wheres-my-refund-fast/">Where&rsquo;s My Refund? How to Get Your Tax Refund As Quickly As Possible</a> &mdash; When you get your tax refund depends on when you filed, how you filed, and how you asked for your refund. [Wallet Hacks]</p> <p><a href="http://www.moneyaftergraduation.com/2018/03/07/hustle-new-parent/">How to Hustle as a New Parent</a> &mdash;These tips will help you manage that difficult work-life balance with a new baby in tow. [Money After Graduation]</p> <p><a href="https://www.popsugar.com/smart-living/Unclogging-Toilet-Bombs-32903823">Unclog Your Commode With Eco-Friendly Toilet Bombs</a> &mdash; These eco-friendly toilet bombs use the degreasing power of dish soap to bust through tough clogs and clean your commode. [PopSugar Smart Living]</p> <p><a href="https://thetinylife.com/tips-for-getting-started-keeping-chickens/">Getting Started With Chickens</a> &mdash; There are many benefits to keeping chickens beyond the eggs they provide. Learn what it takes to care for these productive birds! [The Tiny Life]</p> <h2>Other Essential Reading</h2> <p><a href="https://bemorewithless.com/air/">How to Land Your Plane: 8 ways to help you feel more grounded</a> &mdash; If your schedule and routines haven been thrown off, don't try to jump back in and expect things to go back to normal right away. Dip into your daily routines, giving yourself time to adjust. [Be More With Less]</p> <p><a href="https://www.theclassysimplelife.com/is-minimalism-right-for-you/">Is Minimalism Right For You?</a> &mdash; The minimalist lifestyle can be hard to maintain. Ask yourself these questions to figure out if minimalism is right for you. [The Classy Life]</p> <p><a href="http://www.pocketyourdollars.com/2018/03/ultimate-list-ways-moms-can-make-money-home/">The Ultimate List of Ways Moms Can Make Money From Home</a> &mdash; The only thing you need to start working from home is the willingness to serve and a product or service that people need. [Pocket Your Dollars]</p> <p><a href="https://thecollegeinvestor.com/21541/different-ways-to-get-student-loan-forgiveness/">80 Different Ways To Get Student Loan Forgiveness</a> &mdash; Need help with your student loan debt? Consider applying for one of these student loan forgiveness programs! [The College Investor]</p> <p><a href="https://www.csmonitor.com/Science/2018/0301/How-to-make-science-experiments-as-common-at-home-as-bedtime-stories">How to make science experiments as common at home as bedtime stories</a> &mdash; A recent study looks into the ways families with preschool-age children incorporate science learning into their lives, and what barriers keep them from doing so more. [The Christian Science Monitor]</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/amy-lu">Amy Lu</a> of <a href="https://www.wisebread.com/best-money-tips-essential-tips-to-manage-your-401k">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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="https://www.wisebread.com/intimidated-by-retirement-investing-get-professional-help">Intimidated by Retirement Investing? Get Professional Help!</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="https://www.wisebread.com/this-one-thing-will-get-you-to-1-million-tax-free">This One Thing Will Get You to $1 Million (Tax-Free!)</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/8-things-millennials-can-do-right-now-for-an-early-retirement">8 Things Millennials Can Do Right Now for an Early Retirement</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/6-valid-reasons-not-to-contribute-to-your-401k">6 Valid Reasons Not to Contribute to Your 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="https://www.wisebread.com/what-you-need-to-know-about-the-easiest-way-to-save-for-retirement">What You Need to Know About the Easiest Way to Save for Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement 401(k) best money tips Wed, 14 Mar 2018 09:31:18 +0000 Amy Lu 2118000 at https://www.wisebread.com 8 Startling Facts That Will Make You Want to Invest https://www.wisebread.com/8-startling-facts-that-will-make-you-want-to-invest <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-startling-facts-that-will-make-you-want-to-invest" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/imagecache/250w/blog-images/retirement_savings_golden_nest_egg.jpg" alt="Retirement savings golden nest egg" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Sometimes you need to be startled into action when it comes to investing. It's easy to come up with excuses not to begin placing money in the markets and saving for retirement. Armed with the right information, however, most people would likely choose to invest rather than stay on the sidelines.</p> <p>Perhaps it's time to digest these eye-opening facts and realize that waiting to invest could be a big mistake.</p> <h2>1. The average retirement savings is measly</h2> <p>According to a 2016 survey from the Transamerica Center for Retirement Studies, baby boomers have an average retirement savings of $147,000. Those from Generation X have an average $69,000, while millennials have $31,000 saved. Those figures have probably risen slightly in the last two years, but are still well shy of the totals necessary for a comfortable retirement.</p> <p>Older people approaching retirement age may have held off investing in their earlier years and are now playing catch up. Younger people have more time to invest and get to where they need to be &mdash; but the longer they wait, the harder it gets. (See also: <a href="http://www.wisebread.com/7-retirement-planning-steps-late-starters-must-make?ref=seealso" target="_blank">7 Retirement Planning Steps Late Starters Must Make</a>)</p> <h2>2. You may be retired longer than you worked</h2> <p>Imagine starting work at 21 and retiring at 60. That's 39 years in the workforce. If you live to 100, that's an additional 40 years &mdash; longer than the time you spent working! People are living longer these days, so it's not uncommon to see retirees still kicking it well into their 90s and beyond. In some cases, retirements are stretching past 40 years. Are you doing all you can to allow your money to last that long? Smart investing may be the only way to accumulate enough cash to support a retirement of that length. (See also: <a href="http://www.wisebread.com/5-ways-longevity-is-changing-retirement-planning-and-what-to-do-about-it?ref=seealso" target="_blank">5 Ways Longevity Is Changing Retirement Planning (And What to Do About It)</a>)</p> <h2>3. Very few people get a pension these days</h2> <p>Defined benefit plans, in which a company guarantees workers a specific amount of money each year in their retirement, have been going away fast. Today, only 13 percent of nonunion private sector workers have access to a defined benefit plan, according to the Bureau of Labor Statistics.</p> <p>Instead, most companies now only offer defined contribution plans, such as a 401(k). With these plans, workers must invest their own money, and companies may offer to match a certain percentage of contributions (some don't). If you're in the workforce, it's likely incumbent upon you to take charge of your own retirement savings. (See also: <a href="http://www.wisebread.com/if-youre-lucky-enough-to-receive-a-pension-here-are-6-things-you-need-to-do?ref=seealso" target="_blank">If You're Lucky Enough to Receive a Pension, Here Are 6 Things You Need to Do</a>)</p> <h2>4. Half of workers say they'll probably work during retirement</h2> <p>Isn't the entire idea of retirement to stop working? For many people, ceasing to work entirely just isn't in the cards. The Transamerica survey revealed that about half of all workers &mdash; including baby boomers, Gen Xers, and millennials &mdash; expect to work at least part-time during retirement. Working is fine if you want to, but if you dread the idea of punching a clock in your old age, invest now.</p> <h2>5. About 20 percent of seniors rely on Social Security for nearly everything</h2> <p>Social Security is certainly better than nothing if you're retired, but it's not a lot of money. The maximum Social Security benefit for 2018 is $2,788 per month, or about $33,500 a year, if you retire at age 66. You could get up to $3,698 monthly if you are willing to wait until age 70 begin accepting payments.</p> <p>You won't starve, but you're not going to be cruising the Mediterranean, either. And yet, roughly one in five Americans over 65 rely on Social Security for 90 percent or more of their income, according to a 2015 study from AARP. There are some states where this figure rises to more than one in three older residents. This is a startling figure when you consider that Social Security is currently running a deficit. Invest now, so that Social Security can be like icing on your retirement cake. (See also: <a href="http://www.wisebread.com/5-questions-to-ask-before-you-start-claiming-your-social-security-benefits?ref=seealso" target="_blank">5 Questions to Ask Before You Start Claiming Your Social Security Benefits</a>)</p> <h2>6. The market rarely has bad years</h2> <p>Everyone remembers when the market crashed about a decade ago during the financial crisis. And there have been some high-profile bad years in the past. But consider this: Since the end of World War II, the S&amp;P 500 has <a href="http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html" target="_blank">recorded a negative annual return</a> just 15 times. That's 15 bad years out of 72. The New York Yankees have won 17 World Series titles during the same period! Only once since World War II &mdash; from 2000 to 2002 &mdash; has the market had three bad years in a row, and there's only one other instance of back-to-back negative annual returns. So even if you had no idea what year it was and still chose not to invest, you'd likely be missing out on positive returns. (See also: <a href="http://www.wisebread.com/how-the-risk-averse-can-get-into-the-stock-market?Ref=seealso" target="_blank">How the Risk Averse Can Get Into the Stock Market</a>)</p> <h2>7. Almost as many people own dogs as stocks</h2> <p>About 54 percent of Americans own stocks, according to research from Gallup. Meanwhile, the American Pet Products Association reports that 48 percent of Americans own dogs. Dogs are nice. Dogs can be enjoyable. Dogs are good to have in retirement as companions, but they won't appreciate in value or help pay the bills as you get older.</p> <p>Invest now, and you can have a comfortable retirement, complete with as many canine friends as you want.</p> <h2>8. If you invested $100 in Amazon 20 years ago, you'd have $50,000</h2> <p>When Amazon went public in 1997, its shares were trading at about $18. As of this writing, the company is now trading at more than $1,300 per share. A simple $100 investment 20 years ago would be worth tens of thousands today. Of course, Amazon's stock returns aren't typical. But it goes to show how even a modest investment over time can prove to be enormously lucrative.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F8-startling-facts-that-will-make-you-want-to-invest&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F8%2520Startling%2520Facts%2520That%2520Will%2520Make%2520You%2520Want%2520to%2520Invest.jpg&amp;description=8%20Startling%20Facts%20That%20Will%20Make%20You%20Want%20to%20Invest"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="https://wisebread-killeracesmedia.netdna-ssl.com/files/fruganomics/u5180/8%20Startling%20Facts%20That%20Will%20Make%20You%20Want%20to%20Invest.jpg" alt="8 Startling Facts That Will Make You Want to Invest" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="https://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="https://www.wisebread.com/8-startling-facts-that-will-make-you-want-to-invest">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/4-golden-rules-of-investing-in-retirement">4 Golden Rules of Investing in Retirement</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/how-to-make-sure-you-dont-run-out-of-money-in-retirement">How to Make Sure You Don&#039;t Run Out of Money in Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/8-signs-its-time-to-retire">8 Signs It&#039;s Time to Retire</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/4-foolproof-ways-to-protect-your-money-from-inflation">4 Foolproof Ways to Protect Your Money From Inflation</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="https://www.wisebread.com/7-reasons-youre-never-too-old-to-buy-stocks">7 Reasons You&#039;re Never Too Old to Buy Stocks</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement 401(k) fun facts late retirement pensions returns s&p 500 social security startling facts stocks working Wed, 14 Mar 2018 09:01:08 +0000 Tim Lemke 2106620 at https://www.wisebread.com