The 401k retirement savings account offered by employers has become ubiquitous over the last 30 years. But some retirement planning experts predict that 401ks will be overtaken by a new form of retirement savings in the future. The reason is simple: the accounts don’t help lower income employees who lack the ability to save for retirement, and they put each […]
Investments
Investors are sitting on wads of cash just at the wrong time
The latest consumer inflation rate was clocked at 2.3 percent in April. Sounds pretty benign, doesn’t it? Well it isn’t if you are keeping large sums of money in the bank at today’s interest rates. In fact, “safe” money in the bank is being subject to erosion just as surely as any stock market decline might affect your investment portfolio. […]
Stocks are scary to own, but they are your best inflation fighters
Individual investors have fled the stock market in droves ever since the great bear market of 2008. The latest statistics show investors selling more stock mutual funds than they buy and putting much of the proceeds into bond funds. Meanwhile market volatility has increased again as another round of scary financial headlines from Europe have pushed prices down sharply in […]
Global bonds and stocks are the answers for 401k savers
Employees who contribute to their 401k and other retirement plans are missing the boat when it comes to worldwide investment diversification, says OppenheimerFunds. Its recent survey of 1,000 investors found a distinct “home market” bias among employees investing for retirement. It says employees routinely misunderstood the risks and rewards of investing overseas in international stocks and bonds. Many thought the […]
Passive investors beat active managers in ten-year scorecard
Indexed and passive investing have gotten a bad rap from active managers out to protect their turf and the high fees they earn from buying and selling securities. Passive managers buy a portfolio that matches a market index or that covers an entire asset class. Plenty of academic research suggests that they will do better than the average active investor […]
Famed mutual fund manager quits after fund ends its streak
He was described as “one of the greatest investors of our time” by Fortune magazine in 2006. His record of beating the Standard & Poor’s 500 Index for 15 years from 1991 through 2005 is unmatched. And yet his mutual fund—Legg Mason Value Trust—suffered poor returns over subsequent years, landing him in the bottom of the pack in 2010 out of 1,187 […]
Optimism from a top market observer
As the world’s stock markets took a vicious tumble in late summer and early fall, one of the market’s most prescient observers issued a warning: don’t sell now. Burton Malkiel, economics professor at Princeton and author of “A Random Walk Down Wall Street,” wrote an editorial in the Wall Street Journal urging investors to ignore the market’s recent trends and to focus on […]
Why you should keep investing in 2012 (and even up your ante)
Any investor should be willing to admit 2011 was a pretty crazy year for the markets. They were churned through the year by a weather and nuclear disaster in Japan, a deadlock over finances in Congress that led to a downgrade of U.S. debt, and a major crisis in Europe that threatened to blow apart the European Union and end […]
The virtues of buying and holding
Two of America’s eminent investment researchers were recently asked whether the hyperactive markets of the last few years indicate that the concept of buy-and-hold investing is outdated. Their answer? Absolutely not, reports the Journal of Indexes in its May-June issue. “Obviously, it would be much better if we knew when the market was going to go down 40 percent, and we could […]
Every investor’s choice: Be the dumb money or the smart money
Investors have a lot of choice when deciding how to handle market fluctuations. Many opt for “tactical asset allocation”—in other words, they move out of stocks, for example, when they think returns will be bad, and move back in when they expect better returns. Many others choose a better strategy—they spread their money among a bunch of different asset classes […]