Bond Funds-what’s next?

According to the Investment Company Institute, investors poured $220 billion into bond funds during the first eight months of 2009, compared with just $27 billion in 2008.

What happens to bond funds when we start seeing interest rates rise or inflation rising? Vanguard has an excellent article that helps explain some of these possible scenarios. To learn more, click here:

Vanguard

Money and Marriage

The New York Times has a great article on money questions to discuss prior to getting married.  For those of you that are married but find it challenging to discuss the topic of money, there’s something here for you as well. Here’s the link to the article:

Money & Marriage

Blame it on Rio

OK-well it stinks that we lost the 2016 Olympics to Brazil, but at least from an investment perspective, there may be a silver lining here after all.

First some facts: Brazil’s leading stock market index (BVSP) is up year to date, in US dollars, up 114%. Compare that to the S&P 500 year to date-up 17%. That’s quite a notable difference. Second, just think about the amount of investment that’s certainly going to pour into Brazil now that they locked up the 2016 Olympics. And finally, the Brazilian economy is well positioned for global growth.

One of my favorite ways to play the Brazilian stock market is through ETF’s-specifically i-shares MSCI Brazil Index. (EWZ). This is not a recommendation to purchase this individual fund, as you need to do your own research and make sure you understand the risks and rewards fully of this fund before you invest. But get busy doing your research.

Women Hit Hardest by a Life Crisis

The financial and emotional implications of a life crisis affect women more than men, according to new research findings from AARP Financial Inc. The survey of 600 men and 600 women age 40-79 looked at four life crises; divorce, death of a spouse, long-term job loss, and serious illness or disability. In all four instances, women struggled more than men.

ROTH IRA conversion opportunity-2010

2010 may prove to be a great time for boomers to create a tax-free income stream for retirement, thanks to the opportunity to complete a ROTH conversion without income limits. 57% of high income boomers are not aware that income limitations on conversions will be eliminated in 2010.

To learn more about the benefits of ROTH IRA conversion, please call or email to schedule an appointment.

Nobel Prize winner Paul Krugman- NYT Q & A

Paul Krugman, Nobel Prize Winner, recently held a Q & A with his NYT readers. If you’re interested in reading the latest news about the global economy , especially the U.S economy, click on the link below and it will take you to his responses. I highly recommend taking the time to read it.

From everything he said in the Q & A, the most intriguing to me was the following:

“Q. What are the three most important factors to track (and over what time frame) to gauge if the economy has finally turned the corner. How critical are household wealth and consumer debt in influencing the above factors – are they lagging or predictive indicators?

A.  What I can tell you is what I’m watching. I’m watching unemployment insurance claims – I won’t feel that we’re over the worst until those drop well below 400,000 a week. (they’re still in the mid-5s) I’m watching the ISM surveys, looking for signs of strong (not marginal) growth. And I’m watching the monthly employment reports.

Wealth and debt are predictive factors, not indicators. And for what it’s worth, they’re predicting a long, hard slog.”

Paul Krugman Q & A

“One Year Later, Financial System May Be In Even Worse Shape”

That’s the title of the lead story on the Huffington Post website today-9/25/09.  I encourage you to watch the 5 minute interview with Inspector General of TARP-Neil Barofsky. It’s not good news, but it’s the truth. Kudo’s to the Huffington Post for their excellent investigative journalism-well done.

Click this link to watch the interview:

Neil  Barofsky-Tarp Inspector-9-09

Dollar Woes

As our country racks up more and more debt, the U.S Dollar depreciates further and further. Right now it’s a slow, drip, drip drip. It may be the case; that the dollar gradually heads lower during the next decade. Or, we could see this process accelerate overnight. No one knows for sure.

Over the past few years, I have formed strategic relationships with some key firms that offer well thought out and sound approaches to investing in currencies other than the U.S Dollar. These are firms with excellent reputations and decades of proven performance.

There are many ways to hedge your investment portfolio against the risk of a dollar continuing to depreciate. The sooner you develop a plan on how to counter this risk, the better off you’ll be.

Setting Financial Goals

As stock markets around the globe start to rev up again, the siren call of higher returns will get louder and louder. The recent crash may have jolted you out of your slumber in terms of your asset allocation; you probably have more in bonds than you did before the crash, but that new pragmatic approach to investing may not stand a chance against the temptation of higher returns. Of course, with higher returns comes higher risk.

Before you make any significant changes to your portfolio, I highly recommend reviewing your short-term and especially your long-term financial goals. Taking on more risk while the stock market is doing well may feel like the smart thing to do, but the question to ask yourself is this: What’s the least amount of risk I need to take in order to reach my goals?

It’s tempting and it always will be tempting to take shortcuts regardless of the task. When it comes to investing, this temptation often leads to negative consequences. Attempting to beat the market by taking on much higher risk than you are comfortable with may get you to the finish line sooner. But it could also set you way back.

Playing it too Safe

There’s a large amount of investors sitting on the sidelines, parking their money in treasury bills, CD’s or money market accounts too scared to make a move. For those that lost a lot of money during the recent crash and need their investments to grow in order to fund their retirement, this may not be your best move.

If you lost a lot of money in the recent crash, you were probably too heavily invested in stocks. Now’s the time to take a good and honest look at what happen, see what lessons you learned from the experience and make plans for the future. The past is just that, the past and now it’s time to plan ahead.

Baby boomers, especially baby boomers that are 10-15 years away from retirement suffered some of the most severe losses to their portfolios when the stock market plummeted. Many sold all their holdings at the low points in March and now fear getting back in the market only to get burned again.

If you feel anxious about looking at your investments or your stomach turns into knots thinking about how to reinvest your money so your investments grow adequately to fund your retirement, please know, you’re not alone. That said, the sooner you make a decision to do something with your money, even if its baby steps at first, the sooner you’ll feel like you’re back on track again.

Playing it safe after a global financial crisis that nearly led to a replay of the Great Depression makes sense for a while. Now it’s time to look around and see what options you have available. The sooner you do this, the better.