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Showing posts from October, 2005
With approximately 75 million baby boomers gearing up for retirement, some investors are concerned that this huge wave of retirees will cause a stock market meltdown. The team at the Vanguard Group considers this event unlikely. Here are the reasons they give for a more optimistic point of view:
Withdrawals will happen gradually rather than a mass exodus.The riches 10% of the US are likely to sell their investments during retirement, living off of dividends generated by their portfolios. This group owns 88% of the stock owned by individuals.The market has other participants besides the Boomers (other generations, foundations, international investors, etc.). The normal risks of stocks outweigh the demographics (the state of the economy, the level of interest rates, the tax environment, and the outlook for corporate earnings). What do you think? Will the retirement of the baby boomers lead to a melt down in the stock market?
Mutual Fund Overdose!

I came across an article today about a woman who owned 84 mutual funds. So what, you might say? Well, having too many mutual funds can lead to several problems:

Time crunch – difficulty finding the time to stay up on developments that could negatively impact your portfolio performance such as a fund manager retirement
Increased risk - due to overweighting in a particular stock owned by several different mutual funds Diluted returns – if you have too many mutual funds, you could see the returns canceled by the losses in a one-to-one ratio such that your portfolio performance goes nowhere. How many mutual funds should you own to achieve effective diversification? The answer to this question varies depending upon your investment goals but you can use a standard rule of thumb to help make this decision.The Asset Classes
Investors can choose from 15 different asset classes to include in their portfolio. In light of this, your portfolio should have no more than 11-13 mutua…
Do You Know Your Credit Score?

While doing a little research on credit card statistics, I came accross an interesting story on www.CardWeb.com. The article discussed the impact of FICO credit scores on tha annual interest charges paid by consumers. Apparently, a 30-point increase in a consumer's credit score could save more than $16 billion in annual interest charges! The most dramatic savings occurs when the FICO credit score moves above 660. For a full view of the statistics from this study conducted by Providian check out the article "Score Savings".

So, I have to ask. Do you know your credit score? Do you know what impacts your FICO credit score? Some of the tactics most sane people consider sound money management, such as closing credit cards you don't use or need, can actually hurt your score. I encourage you to check out your FICO credit score and learn more about what impacts that score.

To learn more about the FICO credit score, visit the credit education secti…