Read, listen and learn about different investments and strategies. In the end, your financial well-being and having a successful retirement is your personal responsibility.

Retirement Planning Tip #77

It’s impossible to predict the financial markets. Why? sure, economists can do a good job explaining what has already happened.? But with millions of variables, it’s impossible to credibly and repeatedly predict how things will move going forward.? does that mean you should give up on trying to do the smart thing with you investments?

Instead, be sure to follow proven strategies.? Although proven strategies such as periodic rebalancing won’t make you immediately rich, they can do wonders to keep you from losing your shirt.? Learn how periodically rebalancing forces you to sell high and buy low.

The Importance of Rebalancing originally appeared on About.com Retirement Planning on Monday, August 15th, 2011 at 13:00:06.

Permalink | Comment | Email this

The Importance of Rebalancing

If you talk with 10 different investment advisors, they?ll all have their own opinion as to what they think is the best way to invest. some prefer actively managed investments. some prefer passively managed investments. some advisors like me prefer a 3-tier combination of actively and passively managed investments called a ?Skill-Weighted? portfolio. the point is – you need to do some homework and figure out what strategy resonates with you.

Since neither active management nor passive management has superior performance in all market environments or asset classes (large cap, small cap, growth, value, domestic, international, fixed income, etc.), I think it?s smart to incorporate both strategies into your investing plan. therefore, I?m a staunch advocate for using low-cost index funds, enhanced index funds and exchange traded fund (ETFs) from investments companies such as Vanguard, SEI and Barclays.

The Best Way To Invest For Retirement

NEW YORK — ask the people who invest billions for a living to name their favorite picks for 2012 and you’ll get a smorgasbord worthy of a holiday party: Brazilian stocks, U.S. junk bonds, and government debt from Colombia. ask them what they dislike and they’ll name one of the top-performing investments this year: U.S. government bonds.

Investors can rattle off a long list of reasons to avoid Treasurys. they pay next to nothing and are bound to plunge in value whenever interest rates begin climbing from their historically low levels. It seems nobody likes Treasurys, yet everybody keeps buying them anyway.

“Our least favorite asset is Treasurys,” said Christine Hurtsellers, chief investment officer for fixed-income at ING Investment Management during a recent press briefing. “We still have a lot, but it’s hard to make the argument for them.”

It’s a tricky problem for bond-fund managers at a time when everyday Americans are trusting them with more of their savings. Among investors, there’s a solid belief that Treasury prices must fall and push interest rates up at some point. But those who have bet on a Treasury market collapse this year got burned.

Bill gross, the bond-world version of investment sage Warren Buffett, dropped nearly all Treasury holdings from the fund he manages at Pimco in early 2011. He argued that if Republicans held up lifting the government’s borrowing limit, the country would risk default. Borrowing rates would spike as the world’s investors dropped U.S. government debt, just as they have in Europe.

Most of what gross predicted came true. The debt-limit fight raised worries about default and led to Standard & Poor’s taking away the country’s AAA credit rating in early August. But instead of spiking, U.S. borrowing rates plunged as traders sold everything else to buy U.S. government debt. The race into Treasurys helped drive the entire bond market up 3.8 percent from July to September. gross got the big picture right but his big bet against Treasurys didn’t pan out. Pimco’s Total Return Fund lost 1.2 percent, its worst quarterly performance in three years.

It’s been a recurring story since the financial crisis hit in 2008. for three years running, pundits have predicted that investors will eventually refuse to finance the U.S. government’s $15 trillion in debt and the Treasury market will collapse. But worries over the U.S. economy and the perilous state of Europe’s financial system keep drawing banks and money managers from around the world back to the U.S. dollar and Treasurys.

That demand continues to push U.S. government bond prices up, the main reason why the Treasury market has returned 8.5 percent this year, despite microscopic yields, according to Bank of America-Merrill Lynch data. The benchmark for stock market funds, the S&P 500 index, has returned less than 1 percent, including dividend payments, and that’s with a 7.4 percent surge over the past week.

“It’s been a pretty strong year for bonds,” said Michael Gitlin, director of fixed income at T. Rowe Price, “and it’s largely a result of Treasurys.”

Judging by the gauges money managers usually check before making a move, buying Treasurys still looks like a bad idea. consider this sample:

(asterisk) The benchmark 10-year Treasury pays just 2 percent a year. take inflation into account and the payout on Treasurys equals negative 1.5 percent, what finance types call the real rate.

(asterisk) Treasury yields pay less than top-grade corporate bonds at 3.7 percent and even less than the stock market’s 2 percent dividend yield.

“My colleagues say there’s little value in 10-year (Treasurys) and I’d agree,” Gitlin said. “People have been saying there’s a fixed-income bubble. no, there’s a Treasury bubble.”

If there’s so little to like about U.S. government bonds, why are the world’s investors still buying Treasurys instead of dumping them? in a word, it’s Europe.

As the crisis seemed to spread from country to country this year, the world’s traders plowed more money into Treasurys. The higher the demand for U.S. debt, the lower the interest rate, or yield. So when it looked like Greece might default on its debts earlier this year, the yield on the 10-year Treasury note sank below 3 percent. and when attention turned to Italy and its government debts the yield sank even further, dipping below 2 percent in September. The shift of money out of Europe and into the U.S. has pushed Europe’s borrowing rates to dangerous levels while causing U.S. interest rates to sink.

“You can hate the budget situation and hate the low yield, but if there’s a panic it’s the asset that outperforms,” said Robert Robis, head of fixed-income strategy at ING Investment Management.

A good reason to hold Treasurys, in other words, is that the Treasury market remains the world’s favorite hiding spot. So, for many fund managers Treasurys aren’t exactly an investment. Buying Treasurys is like taking out an insurance contract, Robis said. They’re protection against global financial trouble.

The ING Global Bond fund, for instance, has 15 percent of its $641 million in Treasurys, less than the 20 percent in the benchmark Barclay’s bond index. Robis said having none would be like betting European governments will come to a quick solution to the region’s debt crisis and that the U.S. economy will soon recover its health.

“There’s still a need to hold Treasurys,” Robis said. “Just don’t expect to make a fortune off them.”

‘; var coords = [-5, -72]; // display fb-bubble FloatingPrompt.embed(this, html, undefined, ‘top’, {fp_intersects:1, timeout_remove:2000,ignore_arrow: true, width:236, add_xy:coords, class_name: ‘clear-overlay’}); });

<a href="http://www.huffingtonpost.com/2011/12/05/us-debt-money-managers-_n_1129054.html?ref=businesstag:news.google.com,2005:cluster=http://www.huffingtonpost.com/2011/12/05/us-debt-money-managers-_n_1129054.html?ref=businessMon, 05 Dec 2011 13:15:28 GMT”>US Debt: Money Managers' 'Least Favorite Asset'

Read, listen and learn about different investments and strategies. In the end, your financial well-being and having a successful retirement is your personal responsibility.

Retirement Planning Tip #77

Q: how much money can I contribute to my 401(k) retirement plan at work? how much can I contribute to an IRA? I am paid a salary at my primary job, and I also work as an independent contractor. Can I contribute to my employer-provided 401(k) and also contribute self-employment income to a solo 401(k)?

a: your questions highlight some important but often misunderstood facts about 401(k) plans and individual retirement accounts (IRAs).

More workers are gaining awareness of the need to save for their own retirement. Companies that once provided defined-benefit plans for employees have told their employees they can no longer afford to fund their retirement.

They have switched to “401(k)” defined-contribution plans, which are funded by the employee. this has awakened employees to the fact that they alone are responsible for funding their retirement because nobody else is. They hope there will be Social Security but understand it won’t be nearly enough to support their desired retirement lifestyle.

when employers establish 401(k) plans for the benefit of their employees, the employees choose to either participate or not. If they choose to participate, they designate a portion of their salary to be placed into the 401(k) plan, which has various investments for the employee to choose from. (I wrote about how employees can get help with their 401(k) investments in my Oct. 13 column).

some employers will match employee contributions up to a certain amount. For

2011, employees can contribute a maximum of $16,500, and if they are 50 or older they can add another $5,500 for a total of $22,000.

If a participant in employer’s plan also works for another employer and there is no affiliation between the two employers, he or she can participate in both employer plans and contribute the maximum amounts to each.

The same goes for an employee who is also self-employed in a separate business. For example, if a nurse works at a hospital as an employee and also consults as an independent contractor, she can direct part of her salary to the hospital-provided 401(k) and save her consulting income in a separate solo 401(k) account.

she will avoid paying taxes on the amount she saves in both 401(k) accounts until she retires and starts making withdrawals.

Employees who work for employers who don’t offer a retirement plan have limited options. They can save for retirement in an IRA account, and they can save in a regular taxable account.

Unfortunately, the most they can contribute to an IRA account in 2011 is $5,000 ($6,000 if 50 or older).

If you are an employee who participates in your 401(k) plan at work, you can also contribute up to $5,000 in 2011 to a traditional IRA account ($6,000 if 50 and older). your contribution may be tax-deductible.

If your filing status is head of household or single, your IRA tax deduction phases out between an adjusted gross income of $56,000 and $66,000. If you file as married filing jointly, the IRA deduction phases out between $90,000 and $110,000. If you are married and file separately from your spouse, you get no deduction whatsoever if your adjusted gross income exceeds $10,000.

Kenneth B. Petersen is an investment adviser and principal of Monterey Private Wealth Inc. in Monterey. Send questions concerning investing, retirement or estate planning to 2340 Garden Road, Suite 202, Monterey 93940 or ken@priwm.com.

<a href="http://www.montereyherald.com/business/ci_19204407tag:news.google.com,2005:cluster=http://www.montereyherald.com/business/ci_19204407Thu, 27 Oct 2011 09:08:17 GMT”>401(k) plans through work, on own

Savers, like Kevin and Valerie Tibbetts (pictured), face a new blow with the closure of National Savings & Investments’ popular index-linked savings certificates.

As National Savings halts index-linked certificates, what are the alternatives?

Administrators of Microsoft’s 401(k) Plan are really working hard lately to reengineer the program for the benefit of employees.

Earlier this year, the Plan announced replacement of Fidelity Overseas (FOSFX) with Russell International Growth Account, a “separately managed account”, or SMA, that is exclusively created for the Microsoft Plan, and managed by Russell Investments using three separate managers, currently Hansberger Global Investors, Neuberger Berman and UBS Global Asset Management.

According to the Plan Administrators, Fidelity Overseas was removed as an investment option due to concerns about fund?s investment process and performance, the new fund manager?s management ability, the growth of assets that may negatively affect performance, and external advisor’s recommendation. The Administrator also believes the new Russell International Growth Account, will likely to significantly reduces fees and have “increased likelihood of a higher risk-adjusted returns due to less portfolio volatility.” in the FAQ accompanying the change, the Plan Administrators wrote:

READ FULL POST …

Hot Deal: 1.10% APY online savings with no minimal balance only from HSBC

Read more news like this from PFBlog.com, The Unique Personal Finance Blog Since 2003.

Microsoft 401(k) Plan Replaced Fidelity Overseas with A Separately Managed Account

Read, listen and learn about different investments and strategies. In the end, your financial well-being and having a successful retirement is your personal responsibility.

Retirement Planning Tip #77

Persons select common funds to get investments for a lot of diverse factors. some individuals get started incrediblyShapeshifter first (that sensible kinds) with aspirations on the second house hold inside a language like german Alps and also a new thatched roof tavern inside Words country side. for those, common funds are a functional plus quick [...]

Tricks to invest for pension