Investor Life Cycle ~ Net Worth
It’s interesting to think about how your net worth changes over your life time. This chart does a great job illustrating the typical trajectory
Perils of Emotional Investing
“So many people get scared when everyone says the sky is falling. They get out of equities and into bonds when it’s exactly the wrong time to do it. When everything is sky high and everyone is optimistic, they then plow back into equities. Their emotions do the wrong thing. “
— Dr. Burton Malkiel (author of A Random Walk Down Wall Street)
Hidden Costs of Mutual Funds
MUST-READ article on the “hidden costs of mutual funds”. Study shows the average annual trading costs (commissions, spreads, market impact and opportunity costs) of mutual funds to be about 1.44% IN ADDITION to the publicly disclosed expense ratio, which averages another 1.3.% per year. That means the average fund costs 2.75% per year!
Mutual Fund Trading Costs Go Unreportedhttp://online.wsj.comIn selecting mutual funds, most investors know to check the expense ratio, the standard measure of how costly a fund is to own. U.S.-stock funds pay an average of 1.31% of assets each year to the portfolio manager and for other operating expenses, according to Morningstar Inc.
72% of Small Company Employees Have No Retirement Plan
72 percent of workers in small companies don’t have retirement plans available to them. Some firms don’t set up plans because of the cost. [U.S. Small Business Administration’s Office of Advocacy, March 2010 via WSJ].
Pitfalls of Money Management
Common pitfalls with managing money:
[from NPR’s economics editor Chris Farrell]
Fund Investors at “JetBlue” Breaking Point?
Fed-up fund investors at a ‘JetBlue’ breaking point. Change your investment flight plan, but stay airborne. [The headline is so good that the article almost doesn’t matter!]
Fund investors at ‘JetBlue’ breaking point Chuck Jaffehttp://www.marketwatch.comBOSTON (MarketWatch) — It’s been nearly a week since the man known as the “JetBlue flight attendant” got mad as hell and decided he was not going to take it any more. He cussed out everyone in sight, grabbed two beers, popped open the airplane door and escaped down an emergency slide onto the…
Beware the “nice” man at church…
Beware the “nice” man at church who is trying to sell you financial products with high fees and commissions that benefit him more than you. — Roger Wohlner, CFP®
Enron and Your 401(k)
A common pitfall that we see over and over is owning too much company stock in 401(k)s. This is at odds with diversified investing and magnifies your exposure to one single company that you’re already obliged to for your income. The worst case scenario does happen. Can you say Enron?
Danger In Your 401(k)http://www.forbes.comOne might have guessed that it would be a long time before anybody was foolish enough again to tie up a big chunk of his retirement savings in the same enterprise that issues his paycheck. Apparently, a long time has passed.
Networth
Do you know your net worth? Grappling with this key number is a fantastic way to build a strong foundation for financial planning.
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