01-29-2006, 8:55 PM | Post #166333 |
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Author, Jane Bryant Quinn, is one of the most knowledgeable and experienced financial writers in America. The first part of her latest book, "Smart and Simple Financial Strategies for Busy People," is primarily about spending and saving, eliminating debt, insurance, buying a house, paying for college, etc. The last half is about investing. She offers these investing gems:
"Of all the ways of managing money, nothing beats the simple way. I'll go even further--the simple ways are not only smart, they're also the most sophisticated."
"Financial firms love to make investing look complicated, so you'll need their help."
"Lots of evidence proves that the simpler things work better than the alternatives touted by the Great American Finanical Sales Machine."
"You'll never get anywhere if you're spending more than you earn."
"A Roth does double duty: It's a tax-favored, long-term retirement fund that also can function as a Cushion Fund."
"Next to gravity and the tides, compounding is nature's strongest force."
"You must reduce, then eliminate, credit card debt."
"There's nothing so sweet as a paid-up home when you finally move from full-time work into your retirement years."
"It's an error to put college ahead of retirement savings, if you can't afford both. Kids can always get student loans -- but banks don't make retirement loans."
"A small army of salespeople runs around the country, trying to persuade everyone to buy a living trust (from them, of course)."
"Write or update a will, a durable power of attorney, a living will and name a health-care representative."
"Your house can be a wealth builder even in boring real-estate markets, as long as you handle it right."
"Of the other tax-favored college-savings plans, none are as good as a low-cost--emphasize low cost--529 plan."
"You don't need 99.9 percent of what Wall Street is selling. It's expensive, unsuitable, or stupid. Most investments are designed to profit the brokers, banks, and insurance companies, not you."
"Cost is the single best predictor of future returns."
"Bonds aren't as risky as stocks, so you can be more ceretain that you'll have this money when you want it."
"The younger you are, the less you need bonds (although, for diversification, you always need some)."
"There are many, many different types of mutual funds--technology funds, gold funds, health-care funds, utility funds, and on and on. You don't need any of them. The best funds own all of these stocks at once."
"Investing is something you shouldn't have to worry about."
"Target Retirement Funds--These are my favorite sleep-tight funds, the easiest investments in the universe. -- A target retirement fund comes with built-in investment advice, and at a fraction of the price."
"With just a few index funds, you can create your own well-diversified portfolio."
"You assume that the people who study the market full time will produce superior results. But it's all mystique as the dismal record shows."
"Can managed mutual funds beat index funds? They can, but on average they usually don't. It's hard to beat the performance of the total market over time."
"Investing is a game of odds. -- To be a winner you simply need a fund that runs well above average over the long term. That's what you can count on an index fund to do."
"In managed mutual funds, most managers constantly buy and sell stocks, which means that they stick you with a lot of taxable gains."
"The stock market average is like par in golf--the score that only the best players get.-- decades of data prove that the market is hard to beat."
"Every well-diversifed investment plan should include some international stocks."
"Investors often don't think about taxes when they buy a mutual fund. But they should."
"There have even been 10-year and 15-year periods when bonds did better than stocks."
"The simplist way to invest in bonds is through a Total Bond fund."
"If you're investing through an IRA where taxes are deferred, choose a TIPS fund as part of your bond investment."
"Never concentrate your investments in a single company, especially the company you work for."
"Long-Term Vanguard Growth Portfolio: U.S. Total Stock Market Index, 40%; Total International Index 20%: REIT Index, 10%; Total Market Bond Index, 20%; Treasury Inflation-Protected Bond Fund, 10%. -- You should change anything that really bothers you."
"Always think 'portfolio.' That means treating all your investments as a single money pot."
"Chasing top-performing funds is a loser's game."
"Check your investments after any major rally (or once a year), to see if you should rebalance."
"I've been saying, over and over, that smart investing is easy. Rebalancing is the only thing that's hard.--not hard mechanically but hard psychologically. -- Rebalancing takes discipline and courage."
"It's hard to rebalance properly when you own a mix of managed funds, and downright impossible when you own individual stocks."
"The more funds in your plan, he
Originally posted in thread: 47277