Home
Share |

Content about Mutual fund

April 23, 2013
Consolidating Defined Benefit Plans

CHICAGO — Is accumulating multiple IRAs and 401(k)s the best investment strategy?

CHICAGO — The more things change, the more they stay the same. So goes that old saying illustrating an important truth in many aspects of life, but not in retirement planning.

The world of retirement planning has undergone many drastic changes in recent years, most of which would appear to be here to stay. Perhaps the most significant of those is the gradual disappearance of the corporate defined benefit plan.

A generation ago, in the days of generous corporate retirement plans, spending an entire working career with one employer was a common experience; these days, not so much. Today, many if not most of us will have more than one employer during our working careers.

Some of those employers may provide one of the new retirement accounts such as 401(k)s and some may not. In those cases, we have the option of opening individual retirement accounts (IRAs) to help save money for our retirement years. As a result, over a working career, many people wind up with retirement dollars spread out in several different accounts.

January 24, 2013
Target Date Retirement Funds

CHICAGO — These mutual funds are designed to alter investment strategy as holder nears retirement

CHICAGO — The growing number of options for the right approach to retirement planning is making the right choice quite difficult. Among the choices is a relatively new kind of mutual fund that has enjoyed strong growth over the past few years. Known as target date retirement funds, their assets have jumped from $183 billion in 2007 to $436 billion as of mid-2012, according to the Investment Company Institute. The allure of these funds is easy to understand.

A target date retirement fund is simply a mutual fund designed to alter its investment strategy as the holder nears retirement. For example, the Vanguard Target Retirement 2025 Fund is designed to appeal to someone who plans to retire in 2025 or around that time.

Following conventional wisdom, these funds generally alter their portfolios to include increasingly conservative investments as the target retirement date approaches, thus relieving the owners from rebalancing portfolios on their own. The objective is to reduce risk as retirement approaches, generally by decreasing the proportion of securities and increasing the proportion of bonds.

April 3, 2012
Effective Diversification

CHICAGO — If there is one investment philosophy that approaches universal agreement among financial advisers, it’s the need for careful diversification in every portfolio in order to minimize risk

CHICAGO — If there is one investment philosophy that approaches universal agreement among financial advisers, it’s the need for careful diversification in every portfolio in order to minimize risk, but exactly what does diversification mean, and how can you tell if your investments are truly diversified?

One popular TV show on finances features a segment called “Am I Diversified?” in which viewers call in, give the host their top five holdings and the host lets them know if they are properly diversified. According to Jason Whitby, MBA, CFA®, CFP®, AIFA®, senior financial adviser with Miami-based Investor Solutions, it’s not that simple. “The idea of five-stock diversification is mostly refuted by the financial community,” he says, “which tends to agree that the number of individual stocks needed for diversification is actually closer to 30.”

October 25, 2011
Pessimism Abounds in Municipal Bond Market

CHICAGO — When it comes to investing your money, there’s more than enough pessimism to go around, and nowhere is it easier to find than in today’s municipal bond market. Many state and local municipalities are facing the toughest budget problems they have ever seen. California, Illinois and New Jersey are among the states wrestling with money woes. Major cities such as Philadelphia, Atlanta, and Columbus, Ohio, are on a long list of municipalities looking at major tax increases and/or cutting of services and personnel as a last resort for rising above an enveloping debt crisis.

Marilyn Cohen, president and CEO of Envision Capital Management, describes the current bond market as “the biggest slow-motion train wreck I've ever seen.”

August 16, 2011
Your Money: Leaning Toward Alternative Investments

CHICAGO — Judging from my e-mail, it’s not difficult to find savers and investors who are questioning the conventional wisdom when it comes to investing their money. With the stock market on an erratic, volatile course that seemingly leads nowhere, and yields on cash investments such as money markets and CDs almost nonexistent, more and more income-seeking investors are breaking the old rules by dipping a toe in waters they would have considered too risky a few years ago.

Instead of sticking to the philosophy that calls for portfolios laced solely with a careful mix of quality stocks, well-rated bonds and cash, these hardy souls are venturing into eyebrow-raising investments such as junk bonds, commercial real estate, options like puts and calls, and equities in emerging markets in an effort to improve the anemic and unpredictable returns they’ve been enduring of late. According to one adviser, taking on even a little more risk requires overcoming fear of foreign markets.

July 6, 2011
Market History Shows Profit Potential

CHICAGO — This is a difficult time for anyone trying to build a portfolio of savings and investments capable of providing a financially secure retirement. According to the Center for Retirement Research, more than half of the Baby Boomer generation will not be financially prepared for retirement even if they work until age 65.

With corporate pension plans now largely just a memory, it’s up to individuals to design their own financial plans for retirement, and that calls for making some tough decisions.

I can’t remember a time when the economy has seemed more uncertain and fluid. Are interest rates for savings set to rise after a long period of stagnation, or will they continue to remain mired abysmally low? Is it time to start investing in the stock market again, or is it better to wait? How about real estate? Is this a good time to buy or sell a house? These and other questions about our economic future are never easy to answer, but they seem especially problematic in mid-2011.

December 17, 2008
Wise Investors Stray from the Herd

When it comes to investing money, human nature likes to play tricks on us. When the stock market is reaching new highs, we can’t wait to jump in. When it stumbles and falls, we stop investing — or worse, start selling.

As a result, the typical investor tends to buy “high” and sell “low” — the opposite of a profitable investment strategy. But in spite of the lessons of the past, that inner voice keeps urging us to follow the crowd.