One of the easiest ways to diversify your portfolio is to invest in a mutual fund. A mutual fund is like a basket in which lots of investors place their money and then that single large account is managed by a team of professionals. There are mutual funds that specialize in stocks,… Read more
While it’s important to divide your assets between stocks and bonds, cash plays an important role in your asset allocation.
Cash as an investment vehicle is not the same as any cash in your emergency fund, which should be the equivalent of three to six months’ living expenses. Successful investment portfolios sometimes have a slice of their pie invested specifically in liquid (cash) investments…. Read more
The compliance officers at many mutual fund companies seem to believe that the Patriot Act (which was supposed to deter and punish terrorism, and strengthen U.S. measures to prevent, detect, and prosecute international money laundering and financing of terrorism) made it illegal to let people living outside the United States buy U.S…. Read more
Since Americans living abroad are frequently denied the opportunity to buy mutual funds, how can investors diversify their portfolios without being responsible for the day-to-day management of dozens of individual stocks and bonds?
One possible answer is a separately managed account, or SMA. An SMA is a customized portfolio offered by a brokerage firm and managed by an independent investment management firm or money manager…. Read more
Many people consider their home to be their best investment because they get to live in what they hope is a one-way street to real estate appreciation. People’s homes are often the largest percentage of their net worth. However, as I often remind clients, it may be fine to enjoy living in a nice house,… Read more
When I recently offered a client the services of a money manager, he was surprised and asked, “You’re my financial guy, so why don’t you trade my account? Do you have some secret tool in your back pocket?”
I’ve heard this question quite often, and the answer is that having a third-party money manager alongside a financial planner can help clients get the best of both worlds…. Read more
A dual citizen, residing in one country and keeping assets in another, should consider currency diversification.
Currency exposure isn’t only about which currency (USD, EUR,NIS, GBP, etc.) your assets are in, but currency diversification is also determined by the underlying investments in your account.
Mutual funds are generally considered good diversification tools as they are built so that the movement of any one security in the fund won’t dramatically affect the product’s value…. Read more
Higher yield usually means greater risk. Frequently, investors are mesmerized by high-yield bonds and ignore the reason for the high yield. Higher yield bonds mean that there is a greater chance the bond might default. Investing in a bond fund or an exchange-traded fund diversifies away some of the risk, but won’t completely protect you from defaults on principal or interest payments…. Read more
With skyrocketing interest rates, investors are looking for a way to make more money. Yield-seeking investors have started looking at bond funds, which can offer diversification and professional management.
How’s the fund’s performance?
Just because the pros manage mutual funds, that’s no guarantee of returns. In fact, when a mutual fund company buys bonds,… Read more
Equity ownership
When a corporation sells shares of its own stock, these represent ownership in the company. In other words, a purchaser of even just one share of stock in a company is an owner of the company, albeit a very small owner. As a company prospers, it has the option to reinvest profits back into the business…. Read more
