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Asset Allocation

The basic concept of diversifying your assets is found in the classic saying, “don’t put all your eggs in one basket.” If you have all your eggs in one basket and a large rock falls on it, all the eggs crack. Needless to say, if you have all your money in one company’s stock and that company goes out of business… your money cracks as well. The meaning of asset allocation is the spreading out of your money over lots of different kind of investments. Good examples of these assets include stocks, bonds, and savings accounts. You should spread your … Continue reading →

Asset Allocation Chart

I received the coolest chart in the mail today from T. Rowe Price, so I had to share. They call it their Asset Allocation Chart; it is a quick tool to help you decide how to manage an investment portfolio depending on the timeframe you will need the money. What I liked in particular about this simple chart, was it went beyond the basic retirement portfolio and offered some advice on shorter-term investments as well. If you are not already an account holder at T. Rowe Price, I am sure you could call them to have one sent to you. … Continue reading →

Should you Borrow Money to Invest?

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This is a question I hear asked often… is there ever a good reason to borrow money to invest it? Some people figure if they could borrow $10,000 at five percent interest and then invest it with a return of ten percent they should come out ahead. In theory, this does sound possible. In realty, there can be a whole different story. The main problem is the risk involved in this type of venture, especially if you are borrowing more than you could easily pay back from a savings account. If your investment crashes and doesn’t bring you the desired … Continue reading →

Investment Risks

My husband and I had a recent conversation the other day about investments I thought would be interesting to share. We discussed that there are two kinds of risks with investing. Most people think there is only one kind of risk… The first risk is the obvious one, market volatility. When newbie investors launch into the stock market this is the risk that scares them. Will the value of my portfolio go down? Can I lose money? With any stock investment strategy, there is the potential to lose money, yes. Nevertheless, playing it safe is also a risk. The second … Continue reading →

Big Week for Money

If you have been following the news, you will note that there have been many big changes to the economy this week. There are many signs that our country is heading for a recession and the government is trying to balance. These sorts of actions are very interesting as we head into the next election. They also affect our own pocketbooks. After months of gradual decline, the stock market had a large drop this week. Since October, the S&P has dropped 16%, the Dow dropped 15% and the Nasdaq is down 20%. All three of these indicators are not good … Continue reading →