Investing

Safely Investing Your Savings

Today’s Mini Money Makeover candidate had what every financially secure person should have-a savings to fall back on in case of emergency. The problem? All of her money was going into that savings account. She was scared to invest. Her money wasn’t working to make her more money. Have the same problem? Watch the video below for some helpful tips.

A Year Later

It was nearly a year ago that we saw the collapse of one of the country’s largest investment banks and the dive into the deepest recession since the Depression. Today on Wall Street President Obama lit into investment bankers.

“Instead of learning the lessons of Lehman and the crisis from which we are still recovering, they are choosing to ignore them,” he said. And later, “Hear my words: We will not go back to the days of reckless behavior and unchecked excess at the heart of the crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses.”

My question is: Will consumers and investors be guilty of the same? Individuals, unlike Wall Street, are looking saner than over the past few years.

We’ve learned, over the last year, to spend less and save more. According to a recent study by HSBC, over the past six months, 55 percent of survey participants have cut back on leisure activities, 46 percent have cut back on travel and 40 percent have cut back on electronics spending. We’ve learned that a night in with Netflix can be just as good as a night at the movie theatre. And thanks to public figures (namely Michelle Obama) we’ve learned that Talbot’s and J.Crew can be just as chic as couture. Going hand in hand with frugality is saving. Over the course of the past year, we’ve learned that saving for a rainy day is more important than ever. Today, the U.S. savings rate has climbed from 1.2 percent at the beginning of 2008 to an average of 5 percent during the second quarter of this year.

We’ve learned — once again — that you can’t time the markets. Individuals who pulled out after the fall were unfortunately many of the same that missed the recent 50 percent run. (Missing just the best 20 days over the past 20 years would cut the return of an investor who had plowed $10,000 into an S&P 500 index fund from $93,000 to $39,000.) That’s why I still believe that the best strategy is to More…

Ask Jean: No Golden Rule

This week’s question comes from Patricia in New Jersey:

I have money that I want to invest in gold. I want to keep the value of the money and am very afraid of the economic climate. Are gold coins, or gold stocks a good idea?

Many financial planners suggest that a portion of any well-diversified portfolio be compromised of gold or other commodities such as oil. “I wouldn’t allocate more than 5%, maybe 7% or 8% max,” suggests Cathy Pareto, President and Founder of Cathy Pareto and Associates.

When you purchase gold, you have several options. You can purchase it as an exchange traded fund, as mining stocks, as futures, or as bullion.

If you’ve never invested in gold before, Paul Mladjenovic, author of “Precious Metals Investing for Dummies,” suggests starting with bullion (high-quality gold or silver in bar or coin form) such as the American Eagle coins, which are issued by the United States Mint. He warns to steer clear of medallions or commemorative coins. “These are more expensive and have a dealer markup,” says Mladjenovic

Today, more and more investors are looking to gold instead of stocks to provide some financial stability. But before you start plotting where to stash the shiny stuff, you’ll need to consider both the positives and the negatives of investing in gold. More…

MSNBC/Carlos Watson

Off The Hook?

This weekend I was on MSNBC with Dylan Ratigan and Matt Taibbi (who recently wrote this piece for Rolling Stone magazine) discussing whether the government has let Wall Street off the hook too easily.  Watch the video below for my take:

To Rebalance Or Not To Rebalance…That Is The Question

Rebalance or not to Rebalance?

A couple of months back, the legendary John Bogle of Vanguard was on my radio show and I asked him about rebalancing your portfolios to keep a mix of stocks, bonds, and cash (or other asset classes) in check.  “I think rebalancing makes a substantial amount of sense,” he says. With his own accounts, though, he noted, “I don’t rebalance… I leave it alone.  I have not touched my asset allocation since March of 2000.”

Hmmm, I started to wonder.  Which was better for an individual – doing as Bogle said? Or doing as he did?  After all, the advice I’ve been giving for years is that if you take 100 and subtract your age, you’ll have a rough estimate of the amount of your portfolio you should have in stocks.  The rest should be in bonds or other safer havens.  Then, each year, as you age, you take down the stock component by a percentage point.   But I hadn’t tested the theory – at least not recently. More…