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It’s not rocket science. Take the quiz and develop the “get rich behaviors.” Taken from widely acclaimed The Millionaire Next Door, by Stanley and Danko. Figure out if you have the wealthy habits and if not, get started developing them now.
Don’t Spend Your Dividends
With interest rates at historic lows and increasing volatility in major stock indexes, dividends have become the rallying call for investors. Blogs devoted to dividends proliferate and investors believe that dividend stocks are the best equity investment. Don’t get me wrong, dividends are fine, but just because a stock pays a hefty dividend does not mean it is a great investment. And the dividends the stock throws off are not “free money”.
There is scientific evidence that it is more difficult to make a decision when confronted with a large number of choices, than when given just a few choices. I think this is particularly true when it comes to investing in mutual funds. Did you know there are more individual mutual funds than individual stocks? How is someone able to decide among the over abundance of offerings?
Diversification in investing means; don’t put all of your money in one investment or one type of investment. Why diversify? When that investment goes down, there goes the value of your invested assets-down .Buy different types of investments, so that when one goes down in price, the others may go up, or at least remain stable. Diversification smoothes out the ups and downs in the value of your investments.
Friedberg Family Portfolio
See how I allocate our family’s investment portfolio. After many years of researching individual stocks, buying and selling in both our personal family portfolio and the professional portfolio I manage, I began to drift away from that approach. In 2008, I graduated with an MBA in Finance with a solid focus on investing and portfolio management.
An investor with limited investable funds asks which retirement vehicle to fund first, a 401K or Roth IRA. The simple answer is to fund both. If funding both retirement offerings is out of the question, this article is for you. Get guidelines for making the best allocation decision for your retirement funds.
Read about my initial experiences as a lender on this socially informed investing platform. Why Am I Lending?Like many out there, I’m looking for a higher return for some of my portfolio. In fact, like a banker, there is a possibility of 10.69% Returns With Prosper. View a screenshot of my returns.
Get bond investing basics and information to help you decide whether to invest in a bond fund now. A basic characteristic of bond investing is that when interest rates fall, bond prices rise. Conversely, when interest rates rise, bond prices fall. As any savings account owner realizes, interests rates are at an all time low. Thus, when interest rates rise, the direction of any bond fund net asset value is down. What’s an investor to do?
Read about an investor who chose a potentially less lucrative investing allocation because of his personal tendencies. Understand how it’s best to invest in line with your own personality and risk preferences.
This article recounts a recent encounter about a woman’s investment portfolio. Read her story and apply the lessons learned to your situation. This brief dialogue represents the gap in financial knowledge of many investors. This intelligent and well employed woman is doing great by putting money into her retirement account. But that step alone is not enough to secure her financial future.
Get an inside peak at whether to delve into your prior investing decisions. Here’s a hint; it’s usually not a great idea.
Watch this video and get started on the right personal finance foot. Great tips for both new college grads, and those who haven’t seen the inside of a classroom in awhile.
How well are my Investments Performing?
Forget about absolute performance, if you seriously want to evaluate how your investments are performing. Find the benchmarks for your mutual funds; they are listed in the prospectus or on the web-site. Then look at how your investments did in comparison with their unmanaged index benchmarks.
MBA Series Part 1; Risk versus Reward
Understand the relationship between risk and reward and become a smarter investor. There is an unavoidable tradeoff between risk and reward. If you desire a higher return on your investment, you must take greater risk.
MBA Series Part 2; Bonds
A BOND is a loan to a corporation, municipality, or government. When you buy a bond you are making a loan to the bond issuer. In exchange for the loan, you receive an interest payment. The amount of interest you receive is directly related to amount of risk you are taking.
Click for the entire INVESTING ARTICLES archives at Barbara Friedberg Personal Finance