Picking a Financial Adviser? This Tool Can Help

Investors are generally advised to check the background of brokers or other financial professionals before doing business with them. Yet, how many of us really do that, even though it could protect our life savings? It’s safe to say, not a lot. One reason: Even though this information is available online, it’s not been that easy to navigate the multiple websites to find it. >> Should You Invest in Collectibles? Now the U.S. Commodity Futures Trading Commission has created the CFTC SmartCheck, …

‘Boring’ High-Quality Bonds and Why You Need Them

Between mid-September and mid-October, the S&P 500 average sank nearly 150 points, or about 7.4 percent. Many investment pundits now suggest stocks are quite risky and the next great Bear Market could be coming. Suddenly bonds, previously shunned by many investment advisers, are looking more appealing. To better understand how high-quality bonds and bond funds act as a portfolio’s shock absorber during market volatility, let’s go back to the very painful period that ended on March 9, 2009. The stock market had plunged well …

Should You Sell When Your Fund Manager Quits?

So, the star manager of your mutual fund leaves. Should you bail, too? It’s a question on many investors’ minds now after famed bond manager Bill Gross announced Friday he was leaving the company he founded, Pacific Investment Management Co., to start another fund at rival Janus. The Wall Street Journal reported today that investors so far have pulled $10 billion out of Pimco —  and $90 billion more may follow. “You have to be careful not to have a knee-jerk …

Will Interest Rates Rise Next Year? And Should You Care?

When interest rates rise, the value of bonds declines. Many experts are sure that rates will increase next year, but should you worry about that? Why are experts convinced that rates will rise next year? For one, the Federal Reserve announced last week that it will start raising the federal funds rate next year from the near-zero rate of today. The Fed is also tapering quantitative easing, meaning that it’s buying back its own longer-term bonds at a much slower pace …

Jean Chatzky: Our Relationship With Money Is a ‘Hot Mess’

Jean Chatzky has a few choice words for how most folks describe their relationship with money: Confusing. Frightening. Chaotic. Stressful. Precarious. “For two decades now, I’ve been watching how we make our money, save it, spend it, borrow it, invest it and protect it,” Chatzky told an audience today at the AARP Ideas@50+ conference underway in San Diego. “And I can tell you that, overall, our relationship with money is a hot mess.” Chatzky, AARP’s financial ambassador, is a best-selling author and …

Interest Rates Are Low Until You Do the Math

I often hear that interest rates are awful and that it’s the worst time ever for retirees needing to live on fixed income. Yet when you look at after-tax, inflation-adjusted returns, a different picture emerges. Many people smile when I tell them that back in 1980 they could have earned 12 percent on a 10-year U.S. Treasury or certificate of deposit (CD). Depositing $10,000 would have returned $1,200 a year. But if a third went to taxes, that gain would …