Mutual Funds

How to Pick Individual Stocks

Picking single equities seems almost quaint in these days of the mutual fund. Singling out a stock for your portfolio still makes sense, though, if you know how to select smart and you sift carefully through headline deals.

One caveat remains true: “Stay away from them if you can’t afford to lose the money,” said Daniel Mazzola, an advisor with American Portfolios in Massapequa, N.Y., speaking at a recent investing panel.

The Bull Market’s Longevity

The stock market has enjoyed a virtually uninterrupted rally since the dismal days of 2009, following the financial crisis. So the market is overdue for a big pullback, right? History suggests otherwise. Huge bull markets happened in the wake of serious past crises, with stocks reaching levels that were unimaginable at the time.

How Target Date Funds Miss

Simplicity is the biggest advantages of target date funds. But simpler is not better. Many of these funds, designed to grow more conservative as investors age, still are too risky. And too often, they fall short as a financial planning tool because they don’t take into account individuals’ needs.

Can’t Trust the Stock Market?

If you keep your life savings in certificates of deposit or a savings account at your local bank, that decision may be based on a common belief about finances, known as a money script: “You can’t trust the stock market.” This belief about money can keep you from making the most of your retirement savings.

Sizing Up Your 401(k)

When did you last evaluate your company’s retirement plan? If you’re like many people, your 401(k) or profit-sharing plan constitutes the largest – or at least one of the largest – investment accounts in your portfolio. Here’s how to make sure it’s the best plan for you.

Many factors help you evaluate your plan, including the total expenses, investment options, guidance provided and your company match.

Why It’s Different This Time

Yes, it is different this time, and not in a good way. The aftermath of the financial crisis and the worst economic downturn since the Great Depression produced a sluggish recovery. Accelerating technological change is further disrupting. When looking for a culprit for economic malaise, search no further.

Plus ça change, plus c'est la même chose (translation: The more things change, the more they stay the same). Old wise men and women add a wrinkle to their brows when they hear the phrase: “It’s different this time.” They’ve heard that before.

Volatility Antidote: Sangfroid

Volatility, which measures how stock prices jump around, is relatively low lately. But depend on this: It will surge again, once the market goes through turmoil. We are overdue for that. There is only way to survive the next bout of volatility – with cold blood.

The French call this quality sangfroid. Unless you need to cash in your stocks for some reason, like retirement, don’t let these gyrations faze you. Let’s explain why this makes sense.

A Simple Way to Shrink Taxes

After tax season, when they realize exactly how much tax they paid at home, a number of my friends, colleagues and clients asked me what they should do to reduce their taxes next year. While I’m not a tax professional, I certainly pay attention to tax rules and rates regarding investing.

My short answer to their question was – create a portfolio of low-fee, thoughtfully constructed stock index mutual funds or exchange-traded funds. Yet not all of them do the job for you. Here’s how to find the right one.

Is the Market Overvalued?

You keep hearing that, because stock market valuations are so high lately, that a downturn is imminent. But this is not necessarily the case. The often-used P/E ratio, which measures valuations and now is on the high side, is not always the best market bellwether.

It’s likely you’ve seen some version of this headline, and wondered what truth it holds:  “Stock Market’s High Suggests Lower Returns AheadForbes, June 18.

Bullish: Stocks’ Jagged Rise

The second quarter of 2014 is in the books, and goes down as another positive period for the U.S.

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