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September 02, 2008 |
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Question:
I’m a healthy, 60-year-old woman, still working, with a modest
retirement portfolio worth about $40,000. I will soon receive a
lump-sum tax-free pension settlement worth about $25,000. After I max
out my Roth IRA for 2008 and 2009 and pay off some credit cards, I’ll
have about $10,000 left. I intend to keep this as an emergency fund,
though I don’t think I will need it in the future. How should I invest
this money to keep it growing but also protected from a major loss?
Bond funds? Certificates of deposit?
Click here to read Merriman's answer!
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August 27, 2008 |
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Question:
For more than 35 years, we investors have enjoyed the benefits of a rising stock market. Most advisors are committed to the buy-and-hold approach, discouraging people from selling their holdings during a slump because the market has always come back in the past. For many people, that is all they have ever known. However, the major indexes are down 20 percent or more from the October 2007 peak. Some analysts think the market will go down a lot further. My question is what if - just what if - that "rising tide" of the past 35 years becomes a "falling tide" lasting who knows how long? If that happens, all portfolios - lazy or not - will be severely stressed. In my case, all my holdings are in cash, where no losses are allowed. As a retiree, I don't have time to recover. In these times, the best gain is not having a loss. Your suggestions, please, on money management to produce a return that will beat cash with no losses. Is this possible?
Click here to read Merriman's answer!
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August 22, 2008 |
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Question:
My brother-in-law and I have both attended your workshop. We want to be exposed, as you have suggested, to all corners of the market: micro to macro. He has been investigating Fischer Investments, and the question came up about fees that Fisher would charge. My contention is that with Merriman, the total charge is the maximum 1 to 1.5 percent per year on the total value of the account and there is no additional expense charged from each of the DFA funds in the portfolio. My brother-in-law says that all mutual funds, even index-like funds, charge continuing expenses. Who is correct here?
Click here to read Merriman's answer!
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August 18, 2008 |
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Question:
I currently have allocated my retirement funds to your Vanguard buy and hold strategy as listed on your website. I have half of the allocation in DFA Funds as I noticed that some of the Vanguard Funds have performed better over the 5 year period as compared to the DFA ones so that is why I have a combination of the 2 fund families making up the entire suggested investment plan. I do pay a management fee for the whole portfolio though as all the assets are under the advisors care and maintenance. In your opinion is this a winning strategy to invest in the best performing asset classes from each fund family?
Click here to read Merriman's answer!
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August 15, 2008 |
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Question:
For many years I have heard standard advice to keep three to six months of living expenses in cash. Now with the markets taking a dive, I am hearing advisors recommending one year of cash as a minimum. Then I read somebody’s advice to keep 18 months, and another advisor said he keeps two years worth of cash for all his clients. (I wonder just when he started doing that and how long it will last if the market starts booming again.) Is this really the right thing to do? Or do these advisors just find it impossible to find good investments for all that money and are taking the easy way out? I have heard some of these same advisors complain about mutual fund managers keeping money in cash and not staying fully invested. What do you think?
Click here to read Merriman's answer!
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August 11, 2008 |
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Question:
You recently changed your recommended ETF portfolios. REITs used to make up 10 percent of the portfolio, the same allocation as large-cap, large-cap growth, small-cap and small-cap growth. Now REITs are only 5 percent and the others are each 11.25 percent. What is the rationale for this change?
Click here to read Merriman's answer!
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August 06, 2008 |
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Question:
Is now the time to buy more TIPS in my 401(k) or to sell TIPS as a hedge against rising interest rates next year? I’m 57 years old and wonder if I should buy a short-term investment grade bond fund before interest rates go up. Or is it better to buy them when interest rates are much higher?
Click here to read Merriman's answer!
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July 31, 2008 |
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Question:
It makes me crazy to be losing money in mutual funds and paying fees to fund managers who did nothing to preserve my wealth. I want to take your advice and get better diversification for my investments. But I really don’t want to sell at this point and lock in my losses. I’m waiting for the summer rally, which may be starting now, before I sell. Your advice would be appreciated.
Click here to read Merriman's answer!
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July 29, 2008 |
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Question:
On your radio show you said that Suze Orman and others have recommended ditching the S&P 500 Index. You have said in the past that successful investors are often contrarians. Does this mean that it could be time to invest in this fund instead of selling it? What is your recommendation?
Click here to read Merriman's answer!
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July 28, 2008 |
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Question:
My wife and I are very upset by the recent market decline. Some of our mutual funds are down more than 25 percent since last fall. We are five years away from retirement and plan to pay off our mortgage by the time we retire. My wife feels strongly that the money in our funds would be put to better use paying off the mortgage instead of losing money in the market. Does it make sense to do this? If so, how do I determine which funds to sell and which to keep?
Click here to read Merriman's answer!
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