Investing in commodities can be an exciting way for investors to grow portfolio assets. Headlines and news often move commodity assets in a more volatile pattern than equity and fixed income positions. Commodity investing can occur in several different ways including direct investment in the tangible asset or buying assets that pool commodities and are offered to the public on a share basis.
It is important to have cash on hand for emergencies as one should avoid being in a situation where assets are liquidated at an inopportune time. For example, if the stock market is down it would not be the best time to liquidate assets to use for expenses or emergencies that might arise.
Funding college education costs is an important planning step that requires analysis and proactive strategy. College costs are rising significantly faster than the overall inflation rate. 529 plans provide a method in which investors can save on a tax-advantaged basis as they accumulate funds for college expenses.
When you retire, the natural inclination is to consider your retirement account as your first source of capital to fund your income needs. After all, a retirement account is designed to provide you an income stream at the point from which you stop working. For many investors, withdrawing funds from a retirement account is not necessarily the best course of action for a variety of reasons.
Real estate over the last 30 years has been an incredible investment and provided great capital rewards for long-term real estate investors. Whether one invested raw land or rental properties, tangible values have increased and that has meant increased net worth for those investing in real tangible assets.
At long last the baby boomer generation is beginning to retire. 10 years ago, the concern was that baby boomers would pour out of equity assets thus crashing the stock market. Books were written on this demographic prediction which has turned out to not be true.
With the new year comes new opportunities and new risks. This year, there is the added uncertainty of new proposals regarding taxation and economic stimulus. Coupled with markets moving toward all-time highs, it’s important that investors recognize that constructing a portfolio strategy should be an ongoing process and not a one-time event.
The choice of which asset to invest in is an important consideration that entirely depends on each person’s preference for return and tolerance for risk. Mutual funds are pooled assets that provide a level of diversification significantly greater than individual stock assets.
401(k)s can be a powerful tool in accumulating assets for retirement. Funds grow on a tax-deferred basis and monies need not be withdrawn until minimum required distribution rules kick in at age 70 ½. Many investors believe that 401(k)s and other retirement accounts are handled just like any other asset when developing an estate plan, but that is simply not the case.