Best of the Week
Most Popular
1.Gold Price Trend Forecast, Where are the Gold Traders? - Bob_Loukas
2.Stocks Bear Market of 2017 Begins? Shorting the Dow At its Peak! - Nadeem_Walayat
3.Betting on President Trump Leaving Office Early, Presidency End Date - Betfair Market - Nadeem_Walayat
4.Why Stock Market Analysts Will be Wrong About 2017 - Clif_Droke
5.Is This The Best Way For Investors To Play The Electric Car Boom - OilPrice_Com
6.Silver Price 2017 Trend Forecast Update - Video - Nadeem_Walayat
7.Gold Price Set For Very Bullish 2017, Trend Forecast - Austin_Galt
8.10 Things I learned From Meetings With Trump’s Transition Team - - John_Mauldin
9.How Investors Can Profit From Trumps Military Ambitions - OilPrice_Com
10.Channel 4 War on 'Fake News', Forgets Own Alt Reality Propaganda Broadcasting - Nadeem_Walayat
Last 7 days
Stock Market Sentiment at ‘Extreme Greed’ - 26th Feb 17
Trump Relinquishes Control of Foreign Policy - 26th Feb 17
[Gratis] "Dark Money" Secrets Revealed! - 26th Feb 17
Stock Market SPX New All-time Highs Continue - 25th Feb 17
POWERFUL GOLD & SILVER COILED SPRINGS: Important Charts You Have To See - 25th Feb 17
Underperformance in Gold Stocks Argues for Interim Peak - 25th Feb 17
Watch What Happens When Silver Price Hits $26...  - 25th Feb 17
Gold Futures Buying Yet to Start - 25th Feb 17
When the Stock Market Flying Pig Tops - 24th Feb 17
Gold, Second Fed Hike and Interest Rates - 24th Feb 17
Bitcoin Price Hits Record High! - 24th Feb 17
Another Stock Market Bubble? Bring it On! - 24th Feb 17
What Investors Need To Know About U.S. Money Market Funds? - 24th Feb 17
When Was America’s Peak Wealth? - 24th Feb 17
The Oscars – Worth Their Weight in Gold? - 24th Feb 17
The Best Reasons to Buy Gold in the Age of Trump - 22nd Feb 17
Silver, The Return of Stagflation - 22nd Feb 17
Why EU BrExit Single Market Access Hard line is European Union Committing Suicide - 22nd Feb 17
Gold: Short End US Rates Matter More Than Long End Real Yields - 22nd Feb 17
CONTINENTAL RESOURCES: Example Of What Is Horribly Wrong With The U.S. Shale Oil Industry - 22nd Feb 17
Here’s Proof Rising Rates Are Good for Gold - 21st Feb 17
Gold and Silver Weekly Update - 21st Feb 17
US Dollar and Gold Battle of the Cycles - 21st Feb 17
NSA and CIA is the Enemy of the People - 21st Feb 17
Big Moves in the World Stock Markets - Big Bases - 21st Feb 17
Stock Market Uptrend Continues - 21st Feb 17
Brent Crude Oil Price Technical Update: Low Volatility Leads to High Volatility - 20th Feb 17
Trump’s Tax System Could Spark The Wave Of Self-Employment - 20th Feb 17
Here’s How to Stay Ahead of Machines and AI - 20th Feb 17
Warning Signs Of Instability In Russia - 20th Feb 17
Warning: This Energy Investment Could Wreak Havoc On Your Portfolio - 20th Feb 17
The Mother of All Financial Bubbles will be Unimaginably Destructive when it Bursts - 19th Feb 17
Gold’s Fundamentals Strengthen - 18th Feb 17
The Flynn Fiascom, the Trump Revolution Ends in a Whimper - 18th Feb 17
Not Nearly Enough Economic Growth To Keep Growing - 18th Feb 17
SPX Stocks Bull Market Continues to make New Highs - 18th Feb 17
China Disaster to Trigger Gold Run, Trump to Appoint 5 of 7 Fed Governors - 18th Feb 17

Market Oracle FREE Newsletter

State of Global Markets 2017 - Report

Your Four Best Financial Resolutions for 2013

Stock-Markets / Financial Markets 2013 Dec 31, 2012 - 10:18 AM GMT

By: Investment_U

Stock-Markets

Alexander Green writes: This is the time of year for making New Year’s resolutions. And I have four that are guaranteed to make your portfolio bigger, fatter and wider a year from now.

So listen up:

* Save more. All investment begins with saving. And unlike the performance of the stock market, saving is something that’s under your control. It will also have a significant impact in the long-term value of your portfolio. For example, let’s say you’ve accumulated a portfolio worth $100,000. If it compounds at no more than the long-term return of the S&P 500 – 11% a year – it will be worth $1,358,000 in 25 years.


Not bad. But if you added $500 a month along the way, it would grow to more than $2.1 million.

In “The Millionaire Next Door” Thomas T. Stanley and William D. Danko reported that affluent individuals tend to follow a lifestyle conducive to accumulating money. The seven common denominators among those who build wealth successfully are:

1.They live well below their means.
2.They allocate their time, energy, and money efficiently, in ways conducive to building wealth.
3.They believe that financial independence is more important than displaying high social status.
4.Their parents did not provide economic outpatient care.
5.Their adult children are economically self-sufficient.
6.They are proficient in targeting market opportunities.
7.They chose the right occupation.

*Pay less. When it comes to investing, expenses matter. A lot. Investment costs often get out of hand when markets are soaring and your portfolio is rising. But even then high trading costs, front- and back-end loads, high management fees and other investment costs can eat away at your portfolio like termites in an antebellum mansion. Know what you’re paying. Make sure it’s competitive. And if you don’t know what you’re paying, ask. As a rule, more than 90% of retail clients don’t know their total investment costs because a) they’re often hidden and b) they feel awkward asking. Ask anyway.

*Check your asset allocation. Your asset allocation – how you divide your portfolio up among stocks, bonds, gold shares, real estate investment trusts, cash and so on – is your single most important investment decision.

If you doubt it, consider this. Let’s say you have a portfolio that is 25% stocks and 75% bonds and I have one that is just the opposite, 75% stocks and 25% bonds. At the end of the year, let’s say stocks are up 10% and bonds return 2%. But perhaps you are a great stock picker who doubles the market’s return while I own a boring S&P 500 index fund that generates only the market’s return. Even though you are a far better stock picker, my portfolio gives a higher annual return than yours because my asset allocation was better. In short, get your asset allocation right first. All your investment decisions should flow from that. What should your asset allocation be?

The Oxford Club recommends 30% each in U.S. and international stocks, 10% each in high-yield bonds, short-term corporate bonds and TIPS (inflation-adjusted Treasuries), and 5% each in REITs and gold shares. This should lead to higher returns with less risk.

*Keep a sharp eye on taxes. A recent Vanguard study found that the average investor surrenders 2.5% in taxes each year. Yet many if not most of these tax liabilities are avoidable. How do you keep your taxes minimal without raising eyebrows at the IRS?

You follow basic tax management strategies. Stash away as much as possible in tax-advantaged retirement accounts such as traditional IRAs and 401(k) plans so that you get a break on any pre-tax contributions you make and enjoy tax-deferred earnings until you begin to withdraw the assets.

Also, keep tax-inefficient investments – like high-yield bonds, REITs, utilities and actively managed stock funds – in your retirement accounts. And put tax efficient investments – like index funds, long-term stock holdings and municipal bonds – in non-qualified accounts. (This is known as your asset location strategy.)

Also, hold investments for 12 months or longer where possible to qualify for long-term capital gains tax treatment . And don’t forget to offset realized capital gains with capital losses in your portfolio where possible. (I should note that we are likely to see many changes in the tax code as we pass the fiscal cliff, so I plan to revisit this topic soon.)

In sum, these four resolutions should form the foundation of your personal investment strategy. They will get you off on the right foot in 2013. And we here at Investment U will have many more cost-saving, tax-reduction and money-making ideas to share with you in the weeks and months ahead.

So start getting your financial house in order … and let’s look forward to a happy, healthy and prosperous New Year!

Good Investing,

Alex

Source : http://www.investmentu.com/2012/December/four-best-financial-resolutions-for-2013.html

by Alexander Green , Oxford Club Investment Director Chairman, Investment

http://www.investmentu.com

Copyright © 1999 - 2012 by The Oxford Club, L.L.C All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Investment U, Attn: Member Services , 105 West Monument Street, Baltimore, MD 21201 Email: CustomerService@InvestmentU.com

Disclaimer: Investment U Disclaimer: Nothing published by Investment U should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Investment U should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Investment U Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife