Target-date funds have increased in popularity during recent years as a result of investors continually searching for easy, one-size-fits-all solutions to manage their money. But just how appropriate are these funds for the average investor? The answer may surprise you.
Jim Cramer’s Actions Alerts Plus is a subscription service offered through TheStreet.com. It allows investors to trade alongside Cramer as he makes investment decisions for his charitable trust stock portfolio. With over 70,000 paid subscribers, the service appears to be very successful. But just how well has the Action Alerts PLUS Portfolio performed over time? And how does Model Investing stack up?
If you’ve ever worked with a financial planner or investment advisor, there’s a good chance you’re using an investment strategy known as strategic asset allocation. While you may not know it by that name, you’re probably familiar with how it works. What you may not be of aware of, however, are how recent changes in financial markets have made this approach to investing more dangerous than ever before.
Every year, top Wall Street analysts put their thinking caps on and try to forecast the upcoming year’s market return. The result of their analysis usually comes in the form of “price targets” which indicate where major indexes such as the S&P 500 are likely to be at year end. While price targets have little value themselves, what is valuable to investors is having a framework in which to view future returns.
The age-old idea of not having all your eggs in one basket is considered timeless wisdom, but could it be working against you? In truth, diversification is a double edged sword. The benefit that it provides comes at a mighty cost. When it comes to investing, most individuals aren’t aware of the hidden price they pay for this so-called “free lunch.”
In the quest to become a savvy investor, one of the most important concepts you must understand is that of the business cycle. This periodic ebb and flow of our economy exerts tremendous influence not just on asset prices, but on everything from interest rates to the availability of jobs. Since nearly every aspect of your financial life will be influenced in some way by the business cycle, it pays to have a basic conceptual understanding.
If you’re one of the roughly 75% of investors who are using a target-date fund in your retirement plan, you need to read this. We’ve written about why you should say no to target-date funds before, but new research provides the clearest evidence yet for why these funds must be avoided.
Tune in to the stock market on any given day, and you’ll likely find the major averages zooming in one direction or the other. Sometimes the moves are choppy, rising and falling while generally heading nowhere, while other times the market can seemingly run for weeks or months in one direction.
Amid the ongoing COVID-19 epidemic, and the tremendous volatility in the financial markets, we wanted to provide you with a market update and some suggestions on how to manage your portfolio through this crisis.
Due to the unique circumstances surrounding COVID-19, we feel the need to override the April 2020 recommendations for two of our investment models: the TSP Allocation Model and our 401(k) Allocation Model.
