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 …

Coalition Urges Labor Department to Protect Retirees’ Nest Eggs

Public interest groups have joined forces in a coalition to prod the U.S. Department of Labor to revise rules requiring financial advisers to act in their clients’ best interests when offering retirement investment advice. SaveOurRetirement.com, a website created by the coalition, is urging the Labor Department to update the so-called fiduciary rule. Without that safeguard, advisers to retirement plans could sell financial products that pay large commissions yet hurt their clients with unnecessary fees, poor returns or excessive risks, the coalition said. “Right now, …

What to Do With Your Money in 2015

As we start the new year, the usual suspects are lining up to forecast market trends and tell us what to do with our money. But rather than sifting through the same old implausible predictions of the short-term future, let me suggest some useful advice, compliments of Wall Street Journal columnist Jonathan Clements. I asked Clements to share his picks of the best advice for those near or in retirement from his new book, Money Guide 2015, and here they are. …

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 …