Have you been investing throughout the downturn in the economy?
Hopefully the answer is yes, because otherwise you’ve missed out on an amazing 45% increase since the bottom in March. But if you’re waiting to get back in to the market, or are about ready to make the plunge, check out Business Insider‘s 12 Things You Absolutely Must Know Before Investing Again.
Here’s a quick rundown, but click the link to read descriptions for each.
- Know Your Investing Costs
- Reduce Your Costs
- Expose Yourself To Upside Surprises
- Limit Your Exposure To Downside Surprises
- Diversify
- Beware Of Your Own Riskiness
- Engage In Insider Trading (Legally).
- Don?t Buy The ?Hot Stocks For 2009?
- Read Your Quarterly Statement. Ignore Most Of It.
- You Can Negotiate Anything.
- Invest In Low Cost, Passively Managed Life Cycle Funds. Reinvest Your Dividends.
- You Can’t Beat The Market And You Don’t Want To
The New York Times has a piece on a new student loan Web site, SafeStart, in A Hand Up for Students Facing a Mountain of Debt.
It aims to reduce the fear of debt that might keep, say, middle-class 18-year-olds from borrowing for school in the first place. SafeStart, owned by a company called BridgeSpan Financial, charges $40 to $70 for every $1,000 a student borrows. In exchange, it promises to lend customers money interest-free later on to pay back some of those loans. You get the money only if you?re having trouble paying back your loans in your first years in the workplace because your income is too low.
I’m not sure if this is totally revolutionary, since (with at least my) federal student loans, you can defer payment until you work or start off with a lower monthly payment.
Paul B. Farrell, author of The Lazy Person’s Guide to Investing, writes in MarketWatch that Lazy Portfolios seven-year winning streak. He compares the performance of 6 popular actively managed funds (Fidelity Magellan, Dodge & Cox Stock, Legg Mason Value, Janus Fund, Baron Growth and American Funds’ Washington Mutual) with his eight “lazy portfolio” funds.
By comparison, all eight Lazy Portfolios are already sporting positive average annual returns on a 5-year basis. Plus they also beat all six of the popular actively managed funds on 1-year and 3-year average returns. I repeat: All eight Lazy Portfolios are outperforming every one of these popular actively managed funds. Apparently these actively managed funds exist for only one reason … to make their managers rich, not their own investors.
Just what I like to hear.
Finally, I’ll be hosting the Festival of Frugality next week. If you’re a personal finance blogger, please submit your frugality posts using the submission form here.
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