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Friday’s need-to-know money news

April 27, 2018 By Liz Weston

Today’s top story: If you sold fearing a market crash, here’s what to do now. Also in the news: Why you should look under the hood of your target-date fund, a home buyer’s guide to motivated sellers, and is Amazon Prime worth its new price?

If You Sold Fearing a Market Crash, Here’s What to Do Now
Getting back in the game.

It’s Time to Look Under the Hood of Your Target-Date Fund
Taking a closer look.

A Home Buyer’s Guide to Motivated Sellers
Making the right match.

Is Amazon Prime worth its new $119 price tag?
The online giant is raising Prime prices.

Filed Under: Liz's Blog Tagged With: Amazon Prime, Investments, market crash, real estate, Savings, stock market, target-date fund

Tuesday’s need-to-know money news

March 13, 2018 By Liz Weston

Today’s top story: The most and least affordable places to buy a home. Also in the news: 3 investments that aren’t actually investments, why credit card rewards may lose their sparkle, and how to ask for a raise.

The Most and Least Affordable Places to Buy a Home
Some of these may surprise you.

3 Investments That Aren’t Actually Investments
The true definition of investment.

Credit Card Rewards May Lose Sparkle, but Not Value
Rewards could get a lot more personal.

Use This Formula to Ask for a Raise
Getting what you’re worth.

Filed Under: Liz's Blog Tagged With: credit card rewards, Investing, Investments, raises, real estate

Monday’s need-to-know money news

January 22, 2018 By Liz Weston

Today’s top story: 3 ways to invest in your career this week. Also in the news: How to pick stock investments, checking accounts for seniors, and using your emergency savings to pay off credit card debt.

3 Ways to Invest in Your Career This Week
Give your career a boost.

How to Pick Stock Investments
Choosing wisely.

Checking Accounts for Seniors
Know the perks.

Should You Pay Off Your Credit Card Debt With Your Emergency Savings?
Start making short-term sacrifices.

Filed Under: Liz's Blog Tagged With: career advice, checking, checking accounts, credit card debt, emergency fub, Investments, seniors and money, Stocks

Wednesday’s need-to-know money news

December 26, 2017 By Liz Weston

Today’s top story: Making your investing resolutions a reality in 2018. Also in the news: Free activities to get your family out of the house, learn the truth about overdraft fees, and 3-month Equifax fraud alerts are expiring.

Make Your Investing Resolutions Reality in 2018
A whole new outlook for a new year.

Get Your Family Out of the House With These Free Activities
Fun doesn’t have to cost money.

Learn the Truth About Overdraft Fees — and Save Money
Expensive mistakes.

Warning: Your 3-month Equifax fraud alert is expiring
Should you freeze your credit?

Filed Under: Liz's Blog Tagged With: data breach. fraud alert, Equifax, free family activities, Investing, investment resolutions, Investments, overdraft fees

Q&A: How to find the right balance when investing

May 8, 2017 By Liz Weston

Dear Liz: My brokerage wanted me to start moving from stocks that paid me steady dividends into bonds as I got older. If I’d followed that advice, I wouldn’t be nearly where I am today. I sleep just fine with my dividends. Things can change, of course, but until I see solid evidence otherwise, I am sticking with my plan. I have no idea why the brokerage is still pushing the “more bonds with advancing age” idea.

Answer: Presumably you were invested during the financial crisis and saw the value of your stocks cut in half. If you can withstand that level of decline, then your risk tolerance is a good match for a portfolio that’s heavily invested in stocks.

The problem once you retire is that another big drop could have you siphoning money for living expenses from a shrinking pool. The money you spend won’t be in the market to benefit from the rebound. This is what financial planners call sequence risk or sequence-of-return risk, and it can dramatically increase the odds of running out of money.

Perhaps you plan to live solely off your dividends, but there’s no guarantee your buying power will keep up with inflation. Most people, unless they’re quite wealthy, wind up having to tap their principal at some point, which leaves them vulnerable to sequence risk.

There’s another risk you should know about: recency bias. That’s an illogical behavior common to humans that makes us think what happened in the recent past will continue to happen in the future, even when there’s no evidence that’s true and plenty of evidence to the contrary. During the real estate boom, for example, home buyers and pundits insisted that prices could only go up. We saw how that turned out.

Bonds and cash can provide some cushion against events we can’t foresee. The right allocation varies by investor, but consider discussing your situation with a fee-only financial planner to see how it aligns with your brokerage’s advice.

Filed Under: Investing, Q&A Tagged With: Investing, Investments, q&a

Investment fees could leave you old and broke

April 18, 2017 By Liz Weston

You want to save as much as possible for retirement. The financial services industry wants to make as much money off you as it can.

That thorny conflict is at the heart of the battle over what is known as the “fiduciary rule.” If implemented, it would require financial advisers to put clients’ best interests first when counseling them about retirement savings. In practice, it typically would prevent financial pros from steering you into a high-cost investment if similar low-cost choices are available.

The differences in fees — often fractions of a percent — may sound minuscule.

Over time, though, higher fees can dramatically reduce the amount of money that investors accumulate for retirement, according to the Securities and Exchange Commission and other investor watchdogs, and significantly increase the chances that savers will run out of money late in life.

In my latest for the Associated Press, how to save money for retirement without making the financial services industry even richer.

Filed Under: Liz's Blog Tagged With: investment fees, Investments, Retirement

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