If Burton Malkiel, author of the famous "A Random Walk Down Wall Street" and Princeton University economist, is right, the majority of U.S. investors aren't profiting enough from China's rapid growth.
Investing in currencies is tricky for the average person. The traditional alternative, buying foreign stocks, doesn't offer the diversification of currency investing because such stocks are often correlated to U.S. equities.
Investors now have an easy way to bet on the direction of housing prices. Expect prices to rise? You can buy MacroShares Major Metro Housing Up. Fear they have further to fall? Go for MacroShares Major Metro Housing Down.
If you look at the most actively traded stocks on any given day, there usually are no major surprises. The biggest, most widely held companies in the news tend to have the biggest trading volume.
Desperate times call for desperate measures, like conducting fire sales of prized assets in order to bolster capital reserves. Then again, they also give companies cover to make tough decisions that inertia might ordinarily prevent.
Volatility may be the only certainty in the stock market these days.
Question: In your article in the January issue of Money, you recommend buying total market index ETFs. But I don't find being able to trade ETFs like stocks throughout the day to be an advantage for me. For example, if I buy the Vanguard Total Stock Market ETF I will have to pay commission when I buy and sell, whereas I can buy their Total Stock Index mutual fund with no fee. I don't understand why ETFs are better than mutual funds.
At a financial-planner conference earlier this year, I spotted a session called "ETFs: Are Your Clients Investing Without You?" I had to go. We advisers are well aware of the advantages of exchange-traded funds: broad diversification, low costs and a slim tax bill.
Jittery investors began taking money out of stock-based mutual funds again this week, after a brief letup last week.
As you cringe over your mutual fund statements, you may be thinking, "This can't possibly get any worse!" Think again.
If Burton Malkiel, author of the famous "A Random Walk Down Wall Street" and Princeton University economist, is right, the majority of U.S. investors aren't profiting enough from China's rapid growth.
Investing in currencies is tricky for the average person. The traditional alternative, buying foreign stocks, doesn't offer the diversification of currency investing because such stocks are often correlated to U.S. equities.
Investors now have an easy way to bet on the direction of housing prices. Expect prices to rise? You can buy MacroShares Major Metro Housing Up. Fear they have further to fall? Go for MacroShares Major Metro Housing Down.
If you look at the most actively traded stocks on any given day, there usually are no major surprises. The biggest, most widely held companies in the news tend to have the biggest trading volume.
Desperate times call for desperate measures, like conducting fire sales of prized assets in order to bolster capital reserves. Then again, they also give companies cover to make tough decisions that inertia might ordinarily prevent.
Volatility may be the only certainty in the stock market these days.
Question: In your article in the January issue of Money, you recommend buying total market index ETFs. But I don't find being able to trade ETFs like stocks throughout the day to be an advantage for me. For example, if I buy the Vanguard Total Stock Market ETF I will have to pay commission when I buy and sell, whereas I can buy their Total Stock Index mutual fund with no fee. I don't understand why ETFs are better than mutual funds.
At a financial-planner conference earlier this year, I spotted a session called "ETFs: Are Your Clients Investing Without You?" I had to go. We advisers are well aware of the advantages of exchange-traded funds: broad diversification, low costs and a slim tax bill.
Jittery investors began taking money out of stock-based mutual funds again this week, after a brief letup last week.
As you cringe over your mutual fund statements, you may be thinking, "This can't possibly get any worse!" Think again.
As the world financial markets continue to thrash wildly, the amount of money pulled from stock mutual funds in the past week was on the decline, according to a report released Thursday - an indication that individual investors were getting a little less pessimistic.
As the nation's economic crisis deepened, investors pulled $43.3 billion from stock mutual funds, according to a report released Thursday.
Question: After reading thru your column Missing the Boat on International Funds, I'm totally on board with staying away from U.S. stocks. However, I have not found any info on which overseas stocks to look into. Can you give me any insight into foreign ETFs?
Back in 2001, the executives running Australian mining giant BHP Billiton sensed that China's economic growth was gaining critical mass. So they commissioned a study on how the country's rapid industrialization might affect the global markets for copper, coal, iron ore, oil - all the stuff that the company pulls out of the earth and sells.
If you could dream up the perfect investment, chances are it would look pretty much like an exchange-traded fund - or at least the way ETFs looked when they were introduced a decade or so ago.
Where are investors putting their money in these uncertain times? Apparently, more and more are seeking safer havens in Europe, India, China and Latin America.
With gold prices recently crossing the $1,000 an ounce threshold, investors looking for ways to join in the gold rush will have to navigate volatile waters.
Here we go again. Day after day, Americans are being bombarded by a relentless drumbeat of unsettling economic news. The Dow regularly swings by hundreds of points in a single session as it gyrates near bear-market territory. Oil prices keep bubbling toward $100 a barrel. The dollar is crumbling, and a rogue trader in Paris is blamed for triggering a synchronized selloff heard round the world. We're constantly warned that an ugly recession is looming, if not already here. It's all enough to cause a panic attack.
If there's a lesson to be learned from the stock market's recent slide - triggered by massive losses on exotic and risky mortgage-backed securities - it's that there's nothing wrong with simple, boring investments. Like girders supporting a bridge, plain-vanilla bonds can help buttress a portfolio in a shaky market such as this.
Question: What should I do if my employer doesn't offer a 401(k)? I feel like I took a pay cut when I accepted my job since I am losing a significant benefit. I already do an IRA, but would like to do more. --S. R., Fort Lee, New Jersey
Chastened by the 2000-02 crash, the mutual fund industry has morphed into a 401(k) bureaucracy, cranking out bland diversified funds and packaging them into "life cycle" portfolios that you don't have to think much about.
Question: Is historical performance the only reason for believing that stocks will always outperform other asset classes in the long run or is there a more solid basis for expecting that stocks will generate superior long-term returns? - Sachin, Hagerstown, Maryland
CHUCK ROYCE oozes expertise. From his bespoke suits and bow ties, to his passion for handcrafted wooden boats, to his patrician bearing, the president and chief investment officer of Royce & Associates comes across as the kind of old Wall Street hand who set your grandparents up in their comfortable retirement. Heck, he might well have. Royce, 67, has 43 years of experience, and he's steered his Pennsylvania Mutual fund to average annual gains of 16% since 1973. A pioneer in small-company investing, he's such a legend that we've made him a model for our own stock portfolio (see "The FORTUNE 40"). And when you ask him about his duty to shareholders, he doesn't joke around. "I have a responsibility to run this money in the best possible way for the very long term," says Royce. "That is definitely on my mind."
Chuck Royce oozes expertise. From his bespoke suits and bow ties, to his passion for handcrafted wooden boats, to his patrician bearing, the president and chief investment officer of Royce & Associates comes across as the kind of old Wall Street hand who set your grandparents up in their comfortable retirement.
Question: I'm interested in mutual funds as a long-term investment and have noticed that index funds tend to have much lower annual expenses than actively managed funds. So my question is why would I ever want to buy the more expensive actively managed funds? Don't index funds perform better after taking expenses into account? And if I'm sticking to index funds, am I better off in ETFs than regular index mutual funds? - John
As the creator of the Nasdaq 100 exchange-traded fund, John Jacobs already has one smash hit under his belt. Since debuting in 1999, the shares, known as the QQQs, have become the most widely trade...
The Dow has been setting record highs recently, but the market still contains pockets of undervalued stocks.
What would you do with a million bucks? That's easy. But what about five grand? With a handful of broad goals in mind, here are Money Magazine's picks.
Question: What is a fair fee for a financial planner to charge to manage a portfolio worth about $500,000? - Joe, Southaven, Mississippi
There's nothing Wall Street loves more than having a new product to peddle, and exchange-traded funds (ETFs) have been one of the most popular offerings of the new century.
Question: I'm considering investing in tax-managed funds and exchange traded funds (ETFs). But do I have to monitor these investments constantly or can I hold them for the long-term?
People who invest in socially responsible mutual funds have been paying for their principles. Such funds tend to avoid energy and mining companies - and those have been two of the market's hottest ...
Gold got off to a fast start in 2006, hitting a high of $725 an ounce in May. Though it has lost about $80 since then, it remains well above the $500 an ounce it was fetching when we suggested in l...
See the Money 70
Friday saw Deutsche Bank roll out not one, but seven commodity sector exchange-traded funds (ETFs), demonstrating that the bank and its partner PowerShares Capital Management believe that ETFs and commodities will remain hot in 2007.
Pfizer's decision to suspend tests of its latest drug for the treatment of high cholesterol underscores the key problem facing most large pharmaceutical companies. Once a drugmaker has reached a certain size, it's an enormous challenge to generate new blockbusters fast enough to maintain a high growth rate.
The virtues of index investing are well known: low turnover, low cost, and you are sure to keep pace with the market. But there's one potential problem: The S&P 500 and other popular indexes are ca...
74% of those surveyed feel that the tax burden in the U.S. is unfairly distributed between rich and poor. 60% REPUBLICANS 85% DEMOCRATS
Some time after the market collapsed in the spring of 2000, you probably realized there's nothing simple about picking stocks.
Question: My wife and I are both in our early 30s and fall within the 33% tax bracket. We contribute the max to our savings plans at work as well as our IRAs. We also have a taxable brokerage account with a few stocks, but would like to invest about $30,000 a year to this account. Should we consider building an ETF portfolio, or maybe buying tax-exempt municipal bond funds? - Jason Forro, Dewitt, Michigan
Some time after the market collapsed in the spring of 2000, you probably realized there's nothing simple about picking stocks.
Next month the Industrial & Commercial Bank of China plans to offer its stock on the Hong Kong exchange, and global investors are salivating at the prospect. The latest in a string of colossal Chin...
I recently saw an investment expert say that ETFs "defy every single principle of classic indexing." As this person saw it, the problem is that ETFs encourage frequent trading. But even if that's the case, do I have to worry about other investors' trading in ETFs if I'm a buy-and-hold investor? Or can their trading go on without affecting my returns?
HP Chairman Patricia Dunn, who will leave her post after after the company's Jan. 18 meeting, came to the position after a long and well regarded career first at Barclay's Global Investors.
READER QUESTION: My wife and I both work and we invest the max, $15,000 a year, in our 401(k)s. Our employer matches the first 6 percent. We used to also invest in a Roth IRA before our income grew above the limit. What other tax advantaged investment options are open to us? - Juan L., Indianapolis, Indiana
VALUE INVESTORS RELISH THEIR ROLE AS THE MARKET'S SKEPTICS. No high-flying glamour stocks for them. They seek out unloved companies at bargain prices, sit tight and wait for the crowd to come to it...
Value investors relish their role as the market's skeptics. No high-flying glamour stocks for them. They seek out unloved companies at bargain prices, sit tight and wait for the crowd to come to its senses.
REAL ESTATE DEALS
It sounds like a John Ford western. You have three characters: a tough, colorful veteran, a young gun with a chip on his shoulder, and a brainy guy. Throw 'em together, add a plot, and you have a m...
SOME QUESTIONS JUST CAN'T WAIT. Barbara Huarte was sitting at a chamber of commerce breakfast last April when she suddenly turned to her neighbor--a local financial adviser--and blurted out, "I'm t...
For investors who prefer to keep things simple, just a handful of mutual funds or exchange-traded funds (ETFs) can help grow a handsome nest egg. This year, as a year ago, we've selected solid choi...
For investors who prefer to keep things simple, just a handful of mutual funds or exchange-traded funds (ETFs) can help grow a handsome nest egg.
When the price of gold shot past $600 last month for the first time in 25 years, I figured I'd missed a big opportunity. Now it has risen past $700. Will it go higher still? Is there a way for me to benefit?
There was a time when investors didn't want gold bars anywhere near their portfolios, but it's long forgotten now.
When Exchange-Traded funds, or ETFs, came on the scene in the 1990s, they looked like the rarest of new financial products - one that actually made money for you instead of just your broker.
Mutual fund investors seeking dividend income often meet with frustration. That's because it's standard industry practice to deduct management fees from a fund's current income distributions.
This time of year it's not hard to find what looks like a quite promising headline: "The Best Mutual Funds for 2006." Who wouldn't want to know that? Dig into the story, however, and you soon realize that it's pretty much just a more or less educated guess (likely the latter) about whether last year's hot performers will be this year's winners. Folks, that's not investing. That's horse racing.
THE BUDDS
Nelson Handel and Elicia Laport were doing okay money-wise early in their marriage, but their decision to become parents -- and the ensuing odyssey through fertility treatments and eventually adoption -- cleaned them out.
This time of year it's not hard to find what looks like a quite promising headline: The Best Mutual Funds for 2006. Who wouldn't want to know that?
I keep hearing about exchange-traded funds and wonder if they would make a good addition to my retirement portfolio. What do you think?
Assets under management in Barclays Global Investors' iShares unit have grown $44 billion in 2005, said Lee Kranefuss, who runs the iShares operation for Barclays.
At first glance, Terry and Rowella Thomason are the picture of prudence. Before proposing five years ago, Terry paid off $13,000 in student loans and saved up for an engagement ring. "My father tau...
Diversify, diversify, diversify...most investors have had this investing mantra drilled into their brains by now.
At first glance, Terry and Rowella Thomason are the picture of prudence. Before proposing five years ago, Terry paid off $13,000 in student loans and saved up for an engagement ring.
While the overall stock market is stagnant, a few sectors, such as energy, are producing eye-popping returns.
Stocks are stagnant, bonds are blah, and mutual funds are mediocre. What's an investor to do?
If you prefer to have professionals manage your money, you can use our rigorously selected mutual funds or exchange-traded funds in combination to create a diversified and relatively hassle-free po...
I've been reading about Exchange Traded Funds (ETFs), but don't understand why ETFs are supposed to be more tax efficient when investors redeem shares. Doesn't the ETF manager have to sell securities to pay departing shareholders the same as a mutual fund manager does? And if those selling those shares results in a net realized capital gain wouldn't that mean the ETF would has to pass along that taxable gains to shareholders just like a mutual fund?
By combining the low-cost and diversification of index funds with the tax efficiency and flexibility of investing in stocks, exchange-traded funds can give individual investors more control over their portfolios, and even a shot at better overall performance.
ETFs are portfolios of stocks, bonds or in some cases other investments that trade on a stock exchange much the same as a regular stock does.
Exchange-traded funds, ETFs for short, are one of those rare examples of a truly innovative products that has the potential to change for the better the way we invest.
Recently Missy and Dave Welker realized they had to get serious about saving for retirement. Dave, 35, an orthopedic surgeon in Venetia, Pa., has the bulk of his money invested in his practice. Mis...
Recently, Missy and Dave Welker realized they had to get serious about saving for retirement.
As gold prices hover near 16-year highs, it's been difficult for the average investor to get pure exposure to the precious metal, but that will change next week.
The big new thing in indexing is exchange-traded funds, which are index portfolios that you buy or sell just like stocks. The best of them are supercheap— iShares S&P 500 Index (IVV) costs 0.09% a ...
Though many analysts believe Wall Street will stay stuck in its current rut at least through the November election, there are signs that a very short-term bounce in stocks may be due.
Ever think about topping a cheeseburger with caviar? Dropping a Ferrari engine into a sensible little Honda Civic? It doesn't sound especially rewarding--but exactly that kind of upgrade has come t...
If you see Spiders, Diamonds and Qubes flying around you, don't worry; you haven't been downloaded, Tron-like, into a video game.
Back in 1997, Stephen Doyle, who founded Montgomery Asset Management and built it into a $12 billion firm, helped sell a majority stake to Commerzbank. Then he mostly retired--until, that is, a for...
I've received several questions about what the upcoming elections mean for the stock market this year. Here's my analysis, along with answers to questions on funds and DRIP plans.
I'd like to get the diversification of a bond fund, but would rather not pay the high management fees of a mutual fund. Are there exchange traded funds (ETFs) that track bond indices?
Let's give mutual funds some credit. They've made it cheap and easy for almost anyone to build a diversified, sophisticated portfolio. But as the fund trading scandal has revealed, they aren't perf...
Throughout the financial blowups of recent years (Enron, Tyco, WorldCom, etc.), mutual funds have come through relatively unscathed. But recently two scandals have hit the headlines, suggesting tha...
PART THREE
It used to be that the most exotic investment strategies were available only to the most well-heeled investors. Not anymore. Just when many individual investors are throwing up their hands and walk...
I have 10 years to go until I retire. My question is, are index funds a good investment for the time I have left to invest? If so, can you recommend some?
Why is it that when something is working just fine, we get the urge to tinker with it until we muck it up? Take indexing. When it was introduced back in the '70s, indexing was seen as a simple, low...
Q. Can you name any mutual funds that invest primarily in defense companies? NAME WITHHELD FALLS CHURCH, VA.
One of the strangest success stories in this bear market has been a financial product that's become awfully big business since it was introduced in 1999. I'm talking about the exchange-traded fund ...
Let's say you didn't make one of the single smartest retirement moves possible: investing in 1985 in an index fund that tracks Standard & Poor's 500. We won't belabor that grave mistake. But we wil...
With stock market returns falling, it's more important than ever to wring the maximum possible gain out of your investments. And one of the best ways to do that is to keep your fund tax bill low.
If you've watched any non-Tivo TV lately, you have no doubt seen the omnipresent Barclays commercials for exchange-traded funds, or ETFs. In one spot a well-dressed woman prowls a high-end store an...
Mutual funds used to have far less competition for investors' attention and dollars. But a number of recent innovations--including cheap online stock trades, exchange-traded funds and preselected b...
The folks who run mutual funds have always been good at cooking up clever ways to gouge you on fees, confuse you about performance, make you pay unnecessary taxes and goad you into buying funds you...
Finally: Barclays Global Investors in May launched its line of exchange-traded index funds. Called iShares, they track benchmarks from the old-line S&P 500 to the Dow Jones Internet index and can b...
Death and taxes are both certain," an anonymous wag once wrote, "but death isn't annual." Considering that this quip was one of the funniest that I could find among the 298 witticisms listed at Tax...
Not so long ago, you had two basic options if you wanted to play the stock market. You could write a check to a mutual fund and get instant diversification. Or you could take the time and trouble t...
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