Smart Year-End Investing Moves
From the November 2010 newsletter:
As you feast on turkey and Black Friday sales this weekend, you may wonder what investing tasks you need to take care of before year-end. Okay, that’s not going to happen, but here’s a list anyway. Happy Thanksgiving!
The Smart Way to Look at Stock Charts
Yes, there are more ways than one to look at a stock chart.
I often hear comments about investing from those who are interpreting stock charts incorrectly. Let me show you what I mean. Here is a standard chart of the S&P 500 index from 1950 to 2010.
3 Money Tips for Entrepreneurs
From Blankspaces’ June newsletter:
So you’re working on the next great Web 2.0 startup, or you’re finally shedding your corporate past to work for yourself. You spend all your free time thinking about your business, how to get more clients, and even dabbling in SEO. Well, let’s take a few minutes to make sure your financial house is in order. Here are 3 simple money tips for entrepreneurs, self-employed workers, or anyone going through a career transition.
1. Don’t invest your rent money
If your income is not stable yet and you expect to dip into savings to pay rent or other living/business expenses, that money should not be invested in the stock or bond market. Any savings you expect to use within a year or two should be in very safe, “cash” investments. We’re talking about the boring stuff here: savings accounts, CDs, and money market funds. You’ll need the money soon, don’t gamble it away.
Asset Allocation, A Brief Introduction
As mentioned previously (here and here), I am a huge fan of using index funds or ETFs to construct a portfolio. The natural follow-up question is, “Which index funds or ETFs should I buy?” To answer that question, we must first discuss the concept of asset allocation.
Asset Allocation
Asset allocation is your strategy for dividing your investments across various asset classes. The set of asset classes you use can be as simple as stocks, bonds, and cash. Or you can divide investments into smaller buckets, such as US stocks, foreign stocks, real estate, commodities, bonds, and cash. Next, you need to decide the percentage of your portfolio you want in each asset class–this is your target asset allocation. The goal is to set the percentages so that the risk and return profile of your portfolio is appropriate based on your investment horizon, risk preference, and financial situation.
