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“MidTerm Election Effect”
Personally I think the mute button was invented as a sole response to political commercials. But all that is finally over with as of Tuesday’s elections. Regardless of your political leanings midterm elections can have a major impact on your money. As far as the stock market is concerned, elections provide an immediate clarity, good or bad, of what to expect from the government for the next two years. Continue Reading…
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The Security and Exchange Commission (SEC) voted unanimously recently to propose limits on mutual fund 12b-1 fees and provide more transparency to investors. The SEC’s proposal would help protect investors by limiting 12b-1 fees to 0.25%, improve the transparency of fees for investors, encourage retail competition, and revise fund director oversight duties.
If you have ever put money into a mutual fund you were most likely charged a 12b-1 fee for every year you had money in that fund. The 12b-1 fee is a marketing or distribution fee on a mutual fund. It’s considered an operational expense currently capped at 1% (some funds charge less) of a fund’s net assets. It may not seem like much but they’re costly, Continue Reading…
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The ‘rule of 72’ is a simple and easy way find out how long it will take an investment to double based on a fixed rate of return. When you divide 72 by the rate of return, you get an estimate of how many years it will take for an investment to double.
For example if you have $1000 invested at a 4% interest rate it would take about 18 years (72/4 = 18) to turn your investment into $2000.
The same can be used on debt that you may owe through credit cards, mortgage, etc, assuming you don’t make any payments at all. For example if you have $1000 in credit card debt and a 15% APR on the card your debt will double in about 4.8 years (72/15 = 4.8) if you don’t make any payments at all.
Whether it’s your savings account, CDs, bonds, stock dividends, or any other interest paying investment, the ‘rule of 72’ will give you an idea of how long it will take your money to double.
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Investing for your retirement is one of the most important things you can do for your future. Taking advantage of an IRA (Individual Retirement Account) to help supplement your future retirement income is always a good idea. Which IRA is best for you?
Before you open an IRA, take a look at the Roth IRA and the traditional IRA to see which one will benefit you more.
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Dividend ReInvestment Plans or DRIPs can be a convenient and cheap way of compounding growth in your investment portfolio. If you are not signed up in a DRIP, any dividend paying securities (i.e. stocks, mutual funds, REITs, etc.) that you own will deposit all dividend payments into the accounts those securities are attached or you will receive a check if there is no brokerage account.
A lot of people will use dividend paying securities to increase their income, especially during the retirement years, and is one of the better investment tools to do so. If you are in that situation great, continue to do so, but realize that a DRIP is a possibility and you can opt in and out of the plan at any time.
Now if you are looking to grow your portfolio and don’t need any of the dividends payed to you, a DRIP might be one of the best tools available to increase your annual earnings over time. Continue Reading…
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With over 8,000 mutual funds to choose from, picking a few to put your money into can be a bit overwhelming. If you have a 401k, the human resource department dwindled the list down a bit, if your lucky. But which to choose?
Well lets say you’ve decided on the type of a fund, a growth fund for example, but you still see that you have a dozen to choose from. There is no point in picking 2 or 3 different growth funds and putting your money into each. Reason being that all three funds will be invested in several of the same stocks. If the funds do well, great. But if they don’t you’re going to feel three times the pain. There is no diversification with money in 3 growth funds so don’t do it, pick one growth fund and only one growth fund. It’s better that way. Continue Reading…