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How to Add Real Diversity to Your Portfolio
Tweet Share on Facebook March 29, 2013 CommentWe diversify our lives in many ways. We may drive more than one car, have something different for dinner every night (hopefully), get our news from a variety of sources and watch sports, soaps, how-to and reality shows on TV. The point is that diversification is not some new theory—we've been doing it our entire lives. So don’t let the word “diversification’’ trip you up when it comes to investing. It shouldn't be a foreign concept; diversification simply reduces risk. It isn't complicated and it can come in many forms.
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4 Steps to Boost Your Retirement Confidence
Tweet Share on Facebook March 27, 2013 CommentThe Employee Benefit Research Institute has released its 23rd annual Retirement Confidence Survey. The findings showed the lowest level of confidence about the respondent’s ability to retire comfortably (or at all) in the survey’s history.
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5 Ways to Sabotage Your Nest Egg
Tweet Share on Facebook March 26, 2013 CommentThere are many things you can do to optimize your 401(k), other retirement accounts, and overall retirement strategy. Then there are a few things you just shouldn't do.
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Rethinking Bernanke, and the Fed's Power
Tweet Share on Facebook March 25, 2013 CommentI recently found out that Federal Reserve Chairman Ben Bernanke will be speaking at my youngest child’s college graduation ceremony. If I can get over the relief of having written my last college tuition check—there were four sets—I’ll be listening especially closely for a hint of how monetary policy may evolve and how investors should prepare. Of course, I won’t get any. Instead, I expect to hear the exhortation to public service that befits a senior government official but doesn't reveal anything that the latest “Fed speak” hasn't already covered, however obliquely, about the course of the central bank’s actions. If, however, Professor Bernanke decides to use the occasion to reflect on what the Fed has done and what it might need both to do and to say it’s doing, I have a few suggestions.
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The Good and Bad of ZIRP
Tweet Share on Facebook March 22, 2013 CommentWhat is a Zero Interest Rate Policy (also known as ZIRP)?
The definition is as follows: The lowest percentage of owed principal that a central bank can set. In monetary policy, the use of a zero percent nominal interest rate means that the bank can no longer reduce the interest rate to encourage economic growth. As the interest rate approaches zero, the effectiveness of monetary policy is reduced as a macroeconomic tool.
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3 of the Best Reasons to Sell an Investment
Tweet Share on Facebook March 21, 2013 CommentOne of the most important aspects of investing is knowing when to sell. In fact, knowing when to sell can be as important as knowing when to buy.
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The Financial Risks of Getting Older
Tweet Share on Facebook March 20, 2013 CommentIf you've ever had to watch a loved one’s mental capacity decline as they age, then you know the heartbreak of watching someone realize that something is wrong, but not be able to articulate the problem. At first, it shows up as just losing a train of thought. Then it progresses to forgetting where keys are, and then eventually, it ends up in a complete loss of cognitive ability.
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Do You Have a Retirement Gap?
Tweet Share on Facebook March 19, 2013 CommentMost retirement planners are facing a gap.
I’m not talking about orthodontics. I’m talking about the gap between where your savings are and where you want to go.
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Investors Still Vulnerable to Fiscal Woes
Tweet Share on Facebook March 18, 2013 CommentI recently attended a conference, the U.S. Monetary Policy Forum, that annually brings together a small group of academic, governmental (especially central bank), and private economists to discuss the current state of monetary policy. Funny thing about this year’s conference: most of the day, including the original research paper that kicked off the meeting, dealt with fiscal policy, or how much we tax and spend, rather than monetary policy—the stuff the Federal Reserve and other central banks actually do. In fact, participants seemed to wonder just how much monetary policy matters when the country seems to bounce from one budgetary crisis to another.
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Investors Should Ignore the Macro-Babble
Tweet Share on Facebook March 15, 2013 CommentThere really is no such thing as macroeconomics. At least not for most of us who make our living in the stock-picking world. Sure, if you are a central banker or are paid to do the macro chin-wag thing—maybe you’re a market strategist or a pundit or a news anchor—then there is a thing called macro. But recognize that macro is mostly just raw material for people who get paid to talk.
