Investing Smart

Archive for the ‘Smart Investing’ Category

Question: Investment options for my 401k. Should I change my where my future contributions are invested?

I am 24 years old and have about $16,000.00 in my 401k. It is currently set-up as follows:
33% Washington Mutual Investors Fund R3
32% New Perspective Fund R3
35% American Balanced Fund R3

I have options to also invest money in the following:
The Growth Fund of America R3
Europacific Grown Fund R3
U.S. Government Securities Fund R3
Capital World Bond Fund R3
Capital Worth Grown and Income R3
Smallcap World Fund R3
U.S. Treasury Money Fund of America R3

I had lost about 20% this year but in the last quarter have earned all of my money back so as of right now things seem to be okay but I want to invest my money wisely. I understand I’m young and can afford more “risk” but still want to be educated and make a smart decision. Since I first set-up this account about 4 years ago I haven’t changed where my money is invested and just want opinions if I should. Thank you in advance.

Answer: Washington Mutual R3 has a Morningstar rating of 3 out of 5.
New Perspective a 4.
American Balance a 3.

All three are large cap stocks. Meaning a 24 year old will not see much gain. The diversity between growth and value is good.

Growth Fund is 4 star but a large growth
Europacific is a 5 star the best performing, a large blend
US Govt. 3 stars and at an all time high(not always a good thing)
Capital World Bond 4 stars, great diversity from stocks
Capital G/I is 5 stars with Large cap value
Smallcap 3 stars, would prefer mid cap myself
Last one RUCXX showed no data so be careful

Out of your choices Europacific, Capital World Bond and Capital G/I are the best performing and would provide some diversity to your portfolio.

http://www.google.com/finance?q=NASDAQ:RWICX

Look at the chart to see Morningstar rating, study the chart and you might want to get a mid/small cap fund. They perform much better than large cap because those are the companies yet to take over.

Stay curious about your portfolio and stick with it.

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Question: looking to invest in sewing hobby as income oppertunity… good or bad idea?

i enjoy sewing, its a family thing…lol . i have lots of neat things i could make .. for example lap blankets…older people love em. kids who sit outside to wait for the bus love them., and they make great baby blankets too. it does not cost all that much to make them. i did the math, its do-able for me. but I need a sewing machine. the income from these projects would make getting by a little less hard for us, and it would give me something productive and satisfying to do…. would it be smart to try it out? would it be rude to ask my husband to use his tax return< he is buying EM lights from gall.com< lights will cost about 300, and siren....$?? > with his money, hes getting close to 700 bucks i think> for this investment?

Answer: I have an online sewing business. You have to strike a balance between something that doesn’t cost too much to make, but the customer feels they wouldn’t be able to make it for themselves. But the only way to know is to jump in! Can you borrow a machine from someone in your family until your sewing starts to make money?

I started with a freebie website and upgraded to ad-free when the money started coming in. At first, I offered about 20 different products. In 2 years, I knew what would sell well, and from those items I chose just the ones I enjoy making. there are several things that were in demand but I couldn’t do them fast enough to keep the price down, or they just weren’t fun to make. Have fun and good luck!

PS I HATE alterations! There is a LOT of money in it if you enjoy it, but you have to be VERY VERY good at it and like doing it!

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Question: Should I cash out of all my stocks and mutual funds and go into all cash?

just curious on opinions and what you are doing ?

Here is my situation. Started investing in markets in 1997…Almost tripled my portfolio in 3 years. Then DOT COM crash came..I wasn’t smart enough to sell and too greedy to take profits so I rode it all the way back and lost all the gains I made…I did buy more on way down and then rode market back up and made all my gains back plus by 2007-2008..This time though, I booked profits and got more in cash (around 30%)…..Then fall of 2008 to this spring of 2009 came and I crashed back down but not as hard because of cash…Ok, I took a chance and bought all I could in Feb and Mar 09 and rode it back trading and taking profits along the way and now nearly have everything back that I lost again and Dow is only at 9100……Now I am in 50% cash and worried markets are setting up for a crash again. It seems I get to this point in my portfolio and everytime the market crashes….WELL>>>>?
I’m 44…….

Answer: The most successful investors say something like “Time in the market, not Market Timing is the key to success.”
If you are worried about another downturn – Check out today’s (07/25) New York Times story on page B3 – “The American recession appears to be nearing an end…. The index of leading indicators, which signals turning points in the economy is rising at a rate that has accurately indicated the end of every recession since the index began to be compiled in 1959. …
Since you have a long time horizon, Invest in quality dividend paying companies, reinvest the dividends and during downturns, think of it as buying more shares while they are “on sale.”

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