Nellie, despite your warnings about investing in a single region, we do have an Asia fund in the Kip 25. Want to explain the case?
The Vanguard fund is great. Stay with that
And T. Rowe's Cap Appreciation is a good choice too. Looks like you need a smattering of small and midsize company funds and maybe even an international fund. VDIGX is a member of the Kip25 by the way!
Yup, we love Vang Div Growth. It's in the Kip 25. Don't know why you'd be unhappy with it. As for Price Cap App, if you expect it to keep up in a bull market, you're going to be disappointed. It has only 60% in stocks, as has been its custom.
Katie, first, are you employed and does your employer off a 401K or some such retirement plan. That's a great place to start investing
Oh Manny, I'm just seeing your comment on the single region. The Asia fund we have in the Kip 25 is a new entrant--Matthews Asian Growth and Income. The fund is conservative managed and invests in a mix of stocks, convertible bonds and preferred stocks. This smooths the ride and offers investors a way into the region, with hopefully
Katie, Manny's right. Start saving in a 401k--it forces you to put away money regularly, which is the best way to save and the best way to invest.
Katie, if you feel completely lost, I'm going to make a shameless plug for Kiplingers--read it! The magazine is full of advice for investors who are just starting out.
Ideally you should save 15%--that's kind of the standard.
10% to 15% is a good range--in some years, that's easy to do, you'll find. In others, not so easy.
So, Katie, you are investing through your 401K and IRA. With regard to the 401K, the simple answer is contribute as much as you can. If your employer provides a matching contribution, you MUST invest as much as it takes to get the full match. Otherwise, you're walking away from free money
oh shoot, the link didn't go through completely.
One thing I want to point out about the Kip 25 is that these are all actively managed funds. There's a strong argument for investing in index funds, too. The aim is to just match the market, which, if you're talking about the stock market, should deliver superior results over the long term
We should also post Nellie's most recent story on target date funds
You can own a mix, too--both Manny and I own actively managed funds as well as ETFs and I just bought shares in an S&P 500 index fund in an old 401K
here's the link for the 401K story:
and here's the link to the target date fund:
Evan, your question about target-date funds is good. The whole point of these funds is that they guide your asset allocation--so in fact, in an ideal world, you shouldn't own anything besides a target date fund because it might throw off the allocation targets that are appropriate for your age.
That said, it's not "against the rules" to own a target date fund in your 401K and in your IRA, say, branch out and invest in individual stocks or bonds or even funds. But experts say you should create a plan--an asset allocation plan--and stick with it.
Sometime in the next hour, we're going to post a story about how to deal with the market in light of all the shenanigans in our home town (that would be DC). I think the simple answer is, assuming the budget and debt ceiling issues get resolved soon, this will be a buying opportunity. But if default on our bond obligations cause we didn't raise the debt ceiling, all hell would break loose. So, I think you need to make a call on the sanity of our legislators and President Obama. If you think they will reach some sort of a deal, this is probably a good time to buy
There's nothing wrong with investing in the same Target date fund in your wife's IRA, Vanguard's funds are solid and low-fee. Depending on your tolerance for risk, you could go further out the date scale or pull back on it.
Re TDFs, the key thing is to look at the current asset allocations and the glide paths. They vary from firm to firm. Go with the TDF series whose allocation strategy makes most sense to you
Here's another reader question: I am retired and interested in finding an investment that yields a high dividend. Do you have any suggestions?
That's exactly the story I had in mind. It's the lead piece on hour home page. It features 4 stocks yielding a bit more than 5% each and one that we call a risk-taker's special. It yields a whopping 12%
Great shares. You guys are quicker than me!
New mutual funds are fine as long as they're headed by managers with experience running funds of a similar type.
We followed Chuck Akre to Akre Focus, when he launched his eponymous fund in 2009, partly because he'd had a fabulous record running FBR Focus for nearly two decades. His new fund--back in 2009--was going to be run in exactly the same fashion.
The worst new mutual funds are when sponsors start creating funds in a sector that has been hot
New funds, again run by proven managers, also benefit from starting from scratch--the managers are able to make decisions on what they're buying for the portfolio.
Good point Manny. I'm talking mostly about actively managed diversified stock funds
For me, regarding investing, it would be save and invest regularly.
I just did a story on the best advice from six top pros and I learned so much, even though I only talked to the six experts for 15 minutes at a time. Burton Malkiel said save and invest regularly and buy low-fee investment
Good question, Laura. My best advice doesn't have to do with funds per se, but since the overwhelming majority of my investments are in funds, it's sort of applicable: Never look at your statement when the market is tanking. It creates too much temptation to act, and you often end up doing the worst thing possible--like selling near the March 2009 stock market low
An international fund manager said Don't panic in the wake of a selloff--buy instead. It's all stuff we know, but we should pin it up on the wall so we memorize it. See the story in our upcoming No
That's about all the time we have for today. Thank you for all of your questions and a big thank you to Nellie and Manny.
By the way, I want to point out that the cover story in our Nov issue, which has already gotten to subscribers and should be on newsstands and kip.com in a couple of days, is "How to Be a Better Investor." Stay tuned
Yup, it should be on the website soon, Manny :)
Always fun doing these chats. Thanks to all those who joined us.
Yes, I hope we've been helpful and answered everyone's questions. Thanks for joining in
Be sure to join us for our next Jump-Start Your Financial Plan online chat, Thursday, October 17, from 1-3 p.m. ET.