investing posts

By Dan Caplinger
The Motley Fool

Retirement savings took a huge hit during the financial crisis and market meltdown five years ago, with savers of all ages feeling the brunt of plunging markets. But members of Generation X -- those born between 1966 and 1975 -- suffered the worst declines in their net worth from the crisis and saw the least recovery in the years that followed.

As a result, Gen-Xers are in bad shape when it comes to retirement readiness, as a recent study from the Pew Charitable Trusts concluded. With only enough financial resources to replace half of their pre-retirement income, the key question for Gen-Xers on the whole isn't how financially secure their retirement will be, but rather whether they'll be able to retire at all.

By Dan Caplinger
Daily Finance

It's easier than ever to keep track of your investments 24/7, with increasingly powerful tablets and smartphones bringing you instant access to your portfolio's minute-by-minute value. But do you really need to follow your portfolio all day, every day?

For most people, the answer is a resounding no.

Don't Be a Glutton for Punishment

As investing and personal finance expert Larry Swedroe has pointed out, checking your portfolio on a daily basis greatly increases the chances that you'll inflict painful bad news on yourself.

By Morgan Housel
Motley Fool

Mostly by accident, I have never owned a home, and consider it one of the best financial moves I've ever made.

Not because suffering through one of the worst real estate downturns in history would have slammed my finances, although that's likely true. But because in the last four years, my wife and I have lived in four different locations in three different states on each side of the country. Each move was driven by work and school opportunities that would have been out of reach had we been tied down to one home.

Our story is hardly unique. In one of the most telling studies looking at the benefits of home ownership, economists Andrew Oswald and David Blanchflower ask, "does high home-ownership impair the labor market?"

Their answer is "yes."

By Dan Caplinger
Daily Finance

Wall Street devoutly wishes you to believe that you need professional help to manage your money. But most investors prefer to go it alone.

A survey earlier this year from the Deloitte Center for Financial Services looked at the state of the retirement planning industry in America. When asked about getting professional help for their retirement planning, 57 percent of those surveyed said they were simply more comfortable handling their retirement planning on their own. Another 38 percent saying that they don't actually need advice from professionals, while 29 percent don't trust advisors to objectively represent their interests.

You can practically hear the collective cry of professional money managers across the country: "DIY investing? But how are we going to make a living off that?!"

Deloitte has an idea: One of the conclusions that the survey made was that financial advisors should target do-it-yourself investors with marketing campaigns about the dangers of going it on their own with their retirement savings.

Let's take a look at some common mistakes investors make, with an eye toward seeing whether professional advice can help prevent them.

By Rich Smith
Motley Fool

When inertia meets aspiration, nine times out of 10, inertia wins.

Nearly 600 individuals recently polled by NerdWallet offered all sorts of reasons they've avoided investing in stocks -- from fear of losing money to not knowing how to start, and back to fear (this time, that they don't have enough money to invest).

Here's a pictorial representation of the top five reasons investors gave -- when they could name a reason -- for not investing in the stock market:

Of course, all of this avoidance is to the detriment to one's financial footing -- both in the near- and long-term. And, frankly, the reasons people cite for avoiding stock market investing don't hold much water. So let's line those excuses up, and knock 'em down one at a time, beginning with...

Money is a powerful motivator, but if you were asked to give up something to have an extra $250 per month in your wallet, what would you be willing to give up?

ING Direct surveyed Canadian men and women to see what an extra $250 would encourage us to give up for a time period - what's the can't-live-without items that would get the boot?

According to the ING Direct Survey, Canadians are willing to give up some things considered essential if there's money involved:

With 56 per cent of us not happy with what we're currently saving, it's interesting to see what would encourage us to change our daily habits to gain some extra loonies and toonies. So Canada, what else would you do to get some extra money?

By Dan Caplinger
Daily Finance

The stock market has been on a tear over the past four years, more than doubling since the financial crisis. Many investors have recovered much of the money they lost during the market crash in 2008.

That said, recent bumpiness in stocks suggests that the end of the long bull market may come sooner rather than later.

While trying to time the market is an impossible task, here are some smart moves you can make with your money right now to protect yourself from the next market downturn while still putting yourself in a position to reach all your financial goals.

By Dan Caplinger
Daily Finance

Income-hungry investors have been turning more and more to dividend ETFs -- exchange-traded funds that focus on stocks that pay out healthy amounts of income to their shareholders.

Although these funds share a common goal -- boosting investors' income -- all dividend ETFs are not the same. In fact, they can have profoundly different methods for determining which stocks make the cut. Here's a closer look at how five ETFs slice and dice the universe of dividend-paying stocks, and a few things you need to consider if you're interested in adding them to your portfolio.

By Selena Maranjian
Daily Finance


April is Financial Literacy Month, and our goal is to help you raise your money IQ. In this series, we'll tackle key economic concepts -- ones that affect your everyday finances and investments -- to help you make smarter choices with every dollar decision you face.

Today's term: asset allocation.

In the most basic sense, asset allocation is simply how one's assets are divided among different asset classes, such as cash, stocks, bonds, real estate, and so on -- even insurance investments, commodities, collectibles, and other categories count.

But the term also refers to an investment strategy -- one that can reduce risk through diversification.

Clearly, having all your money in any one asset class can be risky. In 2008, the S&P 500 plunged 37 percent. If you'd held all your assets in an S&P 500 index fund, your net worth would have taken a big hit that year. (It's worth noting, though, that long-term investors who held on regained those losses.) That was also a time of falling real estate values, and had you been a big property owner, especially in some particularly hard-hit regions, you'd have suffered a big blow, with our national housing market only recently starting to pick up again.

Given the harrowing ride we've been on in recent years, you might think that holding cash is the best way to protect your assets from outside forces. Think again.