Yesterday in Part 1 of this 5 part series on general investing we discussed that there are ways to limit losses and let your winners run when you invest your money.Asset Allocation is the process on investing a certain percentage of your money in different asset classes, the object being that different assets behave differently – some are going up when others are going down. The object of the allocation is that most of the time most of the assets are going up, so the allocation will over time generate positive returns. Allocation classes are normally stocks, bonds, commodities (gold, silver, land, oil, etc) and of course, cash. A lot of the allocation classes can be further broken down (stocks into large, mid and small cap stocks; most catagories into domestic and foreign investments, etc.) It is best to figure out what percentage to allocate to each asset class, maybe at the first of the year, then a year later check again and rebalance your porfolio to get things back in line.Industry Diversification is just that: making sure you don’t have too much invested in any one industry (computers, grocery stores, banks and financials, real estate). If the industry goes [...]
CPA Financial Musings: Part 1 – Investing to protect assets and minimize losses
This week I am writing a five part posting on general investing. I used to have my series 7 and 66 brokerage licenses and have managed my own investment accounts for about 18 years. There are many ways to find stocks, bonds and other assets to invest in – investment newsletters, research services, your brother in law, etc. but the most important item is to protect your investments so that you minimize losses and let your winners run. The old addage of buying low and selling high is so obvious we usually pay it lip service, but it is amazing how many people don’t really follow it. In Part 2 tomorow I will talk about general asset allocation and industry diversification – ways to help prevent a disaster in one particular area to kill your portfolio. See you then.Remember, for financial, accounting and tax musings,You can count on us to count for you! email bstonercpa@sbcglobal.net phone 818-317-6035 Website www.briantstonercpa.com
CPA Financial Musings: 401(k) fees and what to do about them
This article by Larry Stein in the Wall Street Journal Market Watch highlights growing 401K fees:http://www.marketwatch.com/story/401k-fees-and-what-to-do-about-them-2013-04-23The problem is, there is not much you can do about it except change your fund choices to index funds (they tend to be cheaper) or talk to your employer and try to convince them to get a plan with cheaper fees. Remember, for financial, accounting and tax musings,You can count on us to count for you! email bstonercpa@sbcglobal.net phone 818-317-6035 Website www.briantstonercpa.com