Last week, I wrote about choosing mutual funds based first on the area of the investment market where they specialize, not just based on returns. But how do you know if the fund you are researching is in the area of your portfolio that you are looking to fill? There is a well-known tool called…
Most of us are pretty good consumers. We use coupons, look for deals online, and buy on sale. Somehow, those good habits go out the window when we shop for investments. Avoidable Mistake #1: We buy when prices are high. Most people get into an investment based on its one year return that looks fantastic.…
Last week, we talked about the different ways that mutual fund sellers get paid. There are funds with loads, called A or B shares, that charge up-front or back-end commissions. There are also no-load funds that are sold directly from mutual fund companies or through discount brokers such as Fidelity, Schwab, TD Ameritrade, Vanguard, or E-trade.…
It shouldn’t surprise you that people in the business of investing money like to make money themselves. And that’s fine! As a consumer you should understand how your investments charge you and whether the price is reasonable. Today I’ll discuss two common ways that mutual fund companies make money: Loads and Expense Ratios. Loads…
Last week we talked about the difference between stocks and bonds. Today, we will talk about how we can use mutual funds to buy stocks and bonds. You’ve probably been told that it’s a good idea to have a diversified portfolio. This means that you shouldn’t invest all of your money in one company. …
Let’s start with the basics. What’s the difference between a stock and a bond? I will explain this concept by starting a hypothetical company, Kristi’s Ranger Cookie Food Truck. Ask any member of my family, neighbors, cat sitter, or school bus drivers, I make the best Ranger Cookies on the planet. Stay tuned for bonus…
Ladies and gentleman, watch carefully as I perform a magic trick. Before your very eyes, I will unmask for you the confusing and veiled language used in the financial services industry. These words make sense to a very few in who work in this business. This can lead to unsuspecting purchases of financial products that…
It’s a bitter irony that after years of slugging money into your tax-deferred retirement accounts (401(k)s, 403(b)s, Traditional IRAs, SIMPLE IRAs, SEP IRAs, 457s) and being told by the IRS that you CAN’T get the money out until you are 59 1/2, when you turn 70 1/2, the IRS tells you that you MUST…
For most of us, it’s hard to imagine not needing every penny of our retirement savings to support our own selves in our later years. However, for a lucky few, a portion of retirement savings will be passed on to their (hopefully eternally grateful) children. For those lucky few, the Roth IRA has the…
That’s right, folks. Albert Einstein thought the tax code was too complex to understand. Where does that leave us mere mortal non-physicists? Hopefully, reading the Sullivan Financial Planning blog! When anyone is talking to you about investment ideas, the question you need to be asking is simple: What’s in it for me? In the case…
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