You don’t hear much about them, but closed-end funds offer a way to buy a good portfolio of securities, often for cheap. When markets fall (as they recently did and will again) CEFs can be attractive alternatives.
People’s feelings about the stock market are disturbingly fickle, as a key investor survey demonstrated during the October downturn. Trouble is, many act on their whipsawing views and make big, avoidable mistakes.
The stock rally had a major interruption recently. The week ending Oct. 17 saw wild movements in stock prices. Is such volatility normal? Yes. Get used to it, because the market has changed and now emphasizes more speed.
Ever plan a picnic, family ballgame or just a few hours kicking back in the sunshine – and first check your TV, radio, laptop or smartphone for the weather forecast? Did the weatherman nail it? The same uncertainly blows across many predictions – including those for the stock market.
Historically, October is the weakest period for stocks, which we have witnessed firsthand, yet again. The huge crashes of 1929 and 1987 happened during the 10th month. Why? There are several reasons, ranging from regularly occurring events to plain bad luck that for some reason lands this month.
Volatility, on vacation for most of the past few years, is back this fall. It hit a new 52-week high in mid-October, double the level of August. That means change is afoot in the market, whose rally lulled many into complacency. So this is a good time to see where your portfolio stands in risk terms.
We can’t control the markets; we can control the costs that help or hinder our investment strategy. What may seem like only a slightly higher fee today can add up to a significant cut of your net return over time. And the first step in minimizing fees is spotting them.
Your stock portfolio’s mix is vital. What too few appreciate is how the various pieces play off one another. A collection of stocks should be organic.
Portfolio asset allocation is a perennial hot topic. How big a proportion of stocks and of bonds? How should they shift as an investor ages? But there is widespread agreement that stocks play a key part in a retirement kitty. The question is: How best to distribute your stock holdings?
I’m uncomfortable about a number of issues now affecting financial consumers. Here are a few that possibly concern your very own investments – and future.
Target date funds (TDFs) insufficiently researched. A target date mutual fund contains a mixture of stocks, bonds and cash equivalents, rebalanced to reduce the number of risky assets as you age toward retirement.
War rages in the Middle East and Ukraine. An economic deceleration dogs China. Once again, Japan struggles to revive its economy. Europe heads into another economic slowdown. Why bother investing outside America?
Because the U.S. no longer dominates world stocks, foreign troubles will eventually abate and overseas bargains now abound.