Finding a Balance between Risk and Return
One of the most basic investment principles
is that returns reward you for the risks that you take. While
investors are often uncomfortable with the concept of risk, it
is this uncertainty that makes higher rates of return possible.
Some basic investment principles related to risk and return include...
What's a Reasonable Rate of Return?
How do you know if you're saving enough
for a future goal? You must get three factors right - how much
you need, when you need the money, and how much you'll earn on
your investments. You can then calculate how much you should save
on an annual basis.
Make Pension Decisions Carefully
In the past, a retiree typically received
a monthly pension check and Social Security benefits. Now, it's
not uncommon for a retiree to have a pension plan, a couple of
401(k) plans, some individual retirement accounts (IRAs), personal
savings, possibly some deferred compensation, and maybe an annuity.
Deciding how to handle all of those different income sources in
the most advantageous manner is a daunting task.
Does Buy and Hold Still Make Sense?
We all know the basics - design an asset
allocation plan, ignore market fluctuations, and stick with the
plan for the long term. In other words, become a buy-and-hold
investor. But in an era where everything seems to change overnight,
is it realistic to expect to find investments you'll be comfortable
owning for years or even decades
Assisting Your Parents with Their Finances
Discussing financial matters with your parents
can be difficult. You don't want to seem concerned about how much
money they may eventually leave you, while they may fear you are
interfering in their lives. Yet, without discussing these matters
beforehand, you may have trouble finding financial records or
determining their wishes if you need to take over their finances.