Stock Investing: Time Versus Timing

More and more investors are telling me that their portfolios have now fully recovered from the 2008 stock market crash. I respond in my typical tactless way by telling them their performance has been awful. That’s because stocks are now 64 percent above their pre-crash high. Put another way, if you had timed the market perfectly wrong and put $10,000 in a total stock market index fund on Oct. 9, 2007, the pre-crash peak, you’d have about $16,375 today. All …

3 Ways to Cut Your Investment Tax Bill

As tax season draws to a close for another year, you may be among those feeling the pinch from taxes paid on investments. I admit that paying taxes is not exactly my favorite thing, so I always look for ways to be more tax-efficient. Here are three things you can do to keep more of what you earn: First, buy tax-efficient investments. Mutual funds that turn over stocks in the portfolio pass along any taxable gains to their holders. Many active funds …

Where to Stash Your Cash This Spring

If you want to make a hundred bucks or even thousands for just an hour of your time, then this post is for you. All you have to do is pick the right place to stash your cash and perhaps change your thinking on certain certificates of deposits (CDs). Read on, and you’ll see that CDs which appear too good to be true really do exist. The power of inertia often has us leaving large sums of cash at our local …

Schwab Starts No-Fee Investment Service

The investing world has been all atwitter — or a tweeter — over the coming of Charles Schwab’s Schwab Intelligent Portfolios, which opened to the public today. The new service from the San Francisco-based money manager is the latest in the growing world of “robo-advisers,” or investment advisory solutions that rely on computer algorithms to build, monitor and rebalance portfolios based on your stated goals, time horizon and risk tolerance. Online competitors include Betterment, Wealthfront, SigFig and others, which have …

Are You a Risk-Taker? Don’t Be Fooled by Bull Market

I’ve filled out more than a few risk-profile questionnaires over the years. These forms are supposed to measure how much investment risk you’re comfortable with, such as what percentage of your portfolio should be in risky stocks versus low-risk bonds. Every questionnaire I’ve ever done has pegged me as a living-on-the-edge kind of guy who should have between 70 percent and 91 percent of my money in stocks or stock funds. And that’s the problem. In reality, only 45 percent of my money is in stock and stock funds, …

Getting Real About Fund Fees

So it’s time to get real about mutual fund fees. Sure, they’re lower than ever for many funds, especially those that track an index. In fact, the average fund fee is now 1.25 percent, according to Chicago-based Morningstar. Still, even this amount is too high and needlessly gives away most of your expected future gains. To understand this, consider the following: You have to frame your gains in real, after-inflation returns. In other words, your portfolio must match inflation just to keep your spending power intact. You …