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Content about Rate of return

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.

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 14, 2011
Evaluating An Investment

SAN FRANCISCO — Great strides have been made in the development of labor-saving devices for the drycleaning industry. Of course, these improvements are miniscule in comparison to what’s happening in other industries. Nevertheless, there are improvements in drycleaning that can be capitalized upon under the right circumstances.

The keys to maximizing the benefits you receive from a large capital investment include knowing why you’re making the purchase decision, when is the best time to make these purchases, how to make the most of the equipment bought, and how to implement any changes the purchase forces.

Take each of these considerations in order. For instance, if you want to purchase a new conveyor or sorting system, there are many possible reasons—saving money and improving accuracy are two good ones. But if the required investment is $10,000, $50,000, $100,000, or more, it’s worth double-checking your assumptions.