The Stock Market as a Leading Indicator. Dr. Doom: Buy stocks while you still can - Apr. 29, 2013. LOS ANGELES (CNNMoney) Roubini is predicting an uptick in stock prices over the next two years as the Federal Reserve continues its stimulus efforts. But buyer beware, Dr. Doom says, because a day of reckoning is lurking at the end of the two-year horizon. Roubini, an economics professor at New York University best known for predicting the U.S. housing crisis, thinks the Federal Reserve and other central banks around the world can and will prop up stocks and bonds for the next two years. Related: Fed will struggle to unwind its giant trade The Fed, he said, is creating the same problems that led to the financial crisis in 2008 by keeping rates near zero.
He pointed to the junk bond market as one example of a bubble. "At some point, there's a levitational problem," said Roubini. When gravity sets in, Roubini says there will not be a recession but a depression. With slowing global growth, it's impossible to keep stocks and bonds at these valuations. Related: World's 5 hottest stock markets. Investing: When to 'take money off the table' - Sep. 12. When it comes to investing your money, focus on creating and maintaining the mix of stocks and bonds that's right for you.
NEW YORK (Money Magazine) You hear this expression a lot around the investing world, usually when people are worried about a possible market setback. For example, I recently saw a money manager on TV tell viewers it was time to "take some money off the table" because he thought that the stock market, which had gained roughly 10% the previous three months alone, was getting too pricey. But like many concepts that pass for wisdom in the investing world -- dollar-cost averaging being a prime example -- this one doesn't hold up very well when you really think about it. Let's say that you "take some money off the table" by selling $10,000 worth of stock from your investment portfolio. So you haven't really taken anything "off the table. " I don't make this distinction to be coy or to engage in semantics. But it's not. Related: Boost your retirement income, minimize the risk. Jack Bogle: Has capitalism lost its soul?
FORTUNE -- Do investment money managers have your best interests at heart? Beyond Peregrine's long-running fraud, some money managers may not be investing your money in the way you expect. Reuters reported on Friday that the Labor Department may be looking into a possible breach of fiduciary duty by J.P. Morgan (JPM). The company put "private mortgage debt underwritten and rated by the bank itself" in its Stable Value Fund, a vehicle designed for 401(k) plans that is supposed "to be the most conservative choice for employees -- liquid and backed by insurance," the report stated. And earlier this month, the Wall Street Journal reported that mutual funds and 401(k) advisors put Facebook (FB) into portfolios advertised as value funds, although "Facebook isn't considered a value stock. " I recently spoke with Jack Bogle, founder of the Vanguard Group and the first index mutual fund, about the state of money management and corporate governance today.
Two examples now. MORE: Unhappy manager? Why dividends still beat buybacks. His investment style may be hot these days, but Federated fund manager Daniel Peris views it as the oldest way to play the market. FORTUNE -- Daniel Peris is a dividend purist. It's not just that he hunts for companies able to deliver high returns via dividends. It's that he views dividends as the fundamental drivers of the stock market. In his view the size of the cash payouts and their rate of growth determine the price investors will pay for a stock over the long run. Sure, the occasional non-dividend payer like Apple (until this year) may shoot to the heavens. But when it comes to predictable returns, he believes the payers win. Dividend-paying stocks have excelled over the past few years, gaining attention. There's now a healthy notion that people should be getting income from the stock market. Are there dividend-paying stocks that are pricey and areas that are undervalued today?
There's not much cyclicality in the types of businesses we invest in. Bill Gross says it's time for investors to plan a "Great Escape" Bill Gross Bond king Bill Gross says it's time to get your portfolio ready for a long-period of lower market returns. FORTUNE -- Apparently, Bill Gross picks movies as well as investments. Bond investor Gross, who runs the world's largest mutual fund Pimco Total Return (PTTRX), is known for his quirky letters to investors. In the past he has dispensed love advice (specifically for Europe) and written about why he hates automatic flush toilets. His letter this month, which came out on Tuesday, instead offers movie advice. Gross' big screen pick is The Great Escape. The movie came out in 1963, is about World War II and stars Steve McQueen as the head of a group of American soldiers trapped in a German POW camp. Basically, Gross' thesis is that the market, and investors, will be trapped in a low-return world for the next few years.
So what does Gross suggest you do? Yet, it is plausible to think that is all about to change, and that the market's recent bull run should be coming to the end. Why Low Employee Fees Are So Important to the Success of Your 401(k) Warren Buffett: Why stocks beat gold and bonds. In an adaptation from his upcoming shareholder letter, the Oracle of Omaha explains why equities almost always beat the alternatives over time.
By Warren Buffett FORTUNE -- Investing is often described as the process of laying out money now in the expectation of receiving more money in the future. At Berkshire Hathaway (BRKA) we take a more demanding approach, defining investing as the transfer to others of purchasing power now with the reasoned expectation of receiving more purchasing power -- after taxes have been paid on nominal gains -- in the future. More succinctly, investing is forgoing consumption now in order to have the ability to consume more at a later date. Investment possibilities are both many and varied. There are three major categories, however, and it's important to understand the characteristics of each.
So let's survey the field. Investments that are denominated in a given currency include money-market funds, bonds, mortgages, bank deposits, and other instruments. Retirement Calculators: Get a retirement plan - Money Magazine on CNNMoney.com. Maximizing savings withdrawals in early retirement - Nov. 10. NEW YORK (CNNMoney) -- I'm thinking of retiring this summer. Ideally, I'd like to withdraw a higher percentage of my savings the first 10 years or so of retirement and then step it down as my wife and I become less active. Are there any rules of thumb or planning tools that could help me out? -- Craig R.
As far as I know, there are no rules of thumb that allow you to spend more early in retirement and then scale back later on without the risk of running out of money too soon. But then again, sometimes rules of thumb can get you in trouble. There are a few planning tools that can help guide you however, provided you use them with good judgment -- and that you're willing to monitor the size of your nest egg and remain flexible about how much you withdraw. With those caveats in mind, here are some tools that can help you: Go to T. Retire by 65: How much do I need to save? Let's call this amount, whatever it turns out to be, your "sustainable lifetime withdrawal. " I've focused on the T. 401k - Introduction to the 401k Retirement Plan. Anyone familiar with the time value of money knows that even small amounts, when compounded over long periods, can result in thousands, or even millions, of dollars in additional wealth.
This simple truth is one of the reasons many financial planners recommend tax-advantaged accounts and investments such as traditional / Roth IRA’s and municipal bonds. In the past, these decisions were not as crucial because of the prevalence of defined-benefit pension plans. Today, those old-world pensions are going by the wayside at many U.S. firms; instead, most of today’s workforce is likely to find their retirement years funded by the proceeds of their 401k retirement plan. What is a 401k retirement plan? A 401k retirement plan is a special type of account funded through pre-tax payroll deductions.
What are the benefits of a 401k retirement plan? There are five key benefits that make investing through a 401k retirement plan particularly attractive. Tax advantage of 401k retirement plans. 10 Traits That Make You Filthy-Rich. NEW YORK (TheStreet) -- Saving money isn't all about whether or not you know how to score screaming bargains. It has more to do with your attitude toward money. Just think of those who don't fit the filthy-rich stereotype. People like Warren Buffett. As explained in the book The Millionaire Next Door by Thomas J. Understanding how personal traits can influence your finances is an essential ingredient for building wealth. Here are 10 key traits: 10. Patience is one of the most important traits when it comes to saving money.
This means waiting until the first wave of product hype has passed, keeping a car for an extra few years before getting another one and waiting until something you want fits into your budget instead of putting it on credit. Patience is often the difference between creating savings and being in debt. 9. When you're satisfied, there is no reason to spend money on nonessentials. People spend because they want to capture the excitement shown in advertisements. 8. 7. 6. 5. 4. 11 Smart Places to Invest Your Money Now. The financial markets and the economy are entering new territory, creating new risks and opportunities for investors.
America's slow recovery is gaining momentum, unemployment is declining and there are even signs that inflation will start to pick up. And while it will be years before before consumers and the federal government fully repair their broken balance sheets, housing prices recover and the majority of the unemployed get back to work, for the first time since 2007, the financial landscape is no longer defined primarily in terms of the crisis. The economy is moving forward. As all economic transitions do, this moment of change is creating new possibilities in the financial markets. As the landscape shifts again, it's important that investors understand where these opportunities are and where they can put their money. 1. As the global economic recovery accelerates, fears of deflation have been replaced with concerns about inflation. 2. 3. 4. The U.S. 5. 6. 7. 8. 9. 10. 11. More Proof That Women Make Better Investors Than Men.