401K and IRA Best Investment Strategy for 2014 and 2015
If you invest money in a retirement plan on a regular basis the best investment strategy for 2014 and 2015 is an investment strategy that will keep your investment portfolio on track without subjecting you to a lot of risk. Most of the investment options in a typical 401k and many IRA plans are mutual funds. To achieve long-term growth with only moderate risk you need to invest money in both stock funds and bond funds. What’s your best strategy for 2014 and beyond?After 30 good years bond funds will turn sour when interests rates turn around and go up (that’s the way bond funds work). Stock funds have returned well over 100% since early 2009. Interest rates are near all-time lows, and an abrupt reversal in rates could cause havoc in both fund categories, resulting in big losses for investors in 401k and IRA plans. It’s time to get proactive to protect your retirement assets.The best investment strategy for average long-term investors traditionally focuses on a mix of stock funds and bond funds. Picking the best stock funds and best bond funds to invest money in from your list of options is a secondary consideration. Concentrate instead on asset allocation and investment strategy. In other words, how do you spread your money across the different options offered and what kind of strategy do you use to make sure you stay in a position that fits your risk profile? We’re talking money management here, and we’re talking about your financial future.Let’s say that you consider yourself a middle-of-the-road investor. You are willing to accept moderate risk in pursuit of higher than average returns. Wall Street has traditionally suggested that the best investment strategy is to invest money with about 60% in stock funds and 40% in bond funds. To protect yourself against the possibility of heavy losses in the future, why not get more conservative with your asset allocation?In a 401k plan asset allocation is your responsibility and you must make decisions on two levels. First, for the investment assets you already have in place (your portfolio allocation). Second, for the new money you invest each payday (your contribution allocation). These allocations can both be the same, or they can be different. For example, upon review of your statement you might see that 70% of your portfolio assets are in stock funds, with 30% in bond funds. And you have 50% of your new contributions going to each.Here’s my suggestion for the best investment strategy for cutting your risk while keeping stock and bond funds an integral part of your investment mix. No matter what your portfolio allocation is now, change it so that you have equal amounts invested in these three areas: stock fund(s), bond fund(s), and a safe investment option. If your 401k offers a STABLE ACCOUNT option that pays a decent interest rate, use it as your safe option. If it doesn’t, go with the money market fund. Remember, interest rates are extremely low, so money market funds presently pay very little interest. On the other hand, some 401k stable accounts pay higher interest rates than you’ll find anywhere else.For your allocation for new contributions set it up the same way with one-third going into each of the three options. If you have an IRA that you intend to contribute to on a regular basis, have it set up so that money automatically flows from your bank account to your IRA account. Split the existing money in your IRA into the same three areas as above, and set it up so that equal amounts flow into a money market fund, stock fund, and bond fund each month.The above strategy will not be the best investment strategy vs. the traditional 60%-40% strategy if both stocks and bonds continue their winning ways in 2014 and beyond. You have traded higher growth potential for greater safety. If, on the other hand, interest rates rise significantly and throw a wrench into the stock and bond markets, this investment strategy should work to your advantage.Let’s say that stock funds and/or bond funds decline significantly in value for a couple of years or more before rebounding. My suggested strategy has two primary advantages. First, your losses will be lower. Second, the new money you have flowing into stock funds and bond funds each month or each payday will buy more and more fund shares as fund prices get cheaper. When prices rebound you will break even and start to show a profit sooner because you bought stock funds and bond funds at cheap levels. That’s called dollar cost averaging… which is a crucial part of the best investment strategy.Sometimes the best investment strategy is to take aggressive action – like after a major decline in stock prices. Other times the best strategy is to be more cautious by cutting the risk in your portfolio… while you continue to invest money in stock funds and bond funds. In 2014 and beyond, I believe that caution is your best strategy.
How to Streamline Your Travel Plans
People wait all year to enjoy a week or two away from the daily grind and go on vacation. Whether your destination is sunny and warm, or you are headed to the slopes for some cold weather fun, vacations are a great way to relieve stress and unwind. However, getting to your vacation destination can be tough. These days, flying is an event unto itself, and you have to begin planning months in advance in order to be prepared to board a plane. Even if you are not flying, it can be a hassle getting from your home to your destination.If you are driving, it may mean long hours in the car with the kids, impatiently awaiting the arrival. Even if it is just you and a friend or a significant other, it can get boring sitting and just watching the highway pass you by. Finally, if you have opted for a more classic mode of travel, you are going to need to pass several hours in a train car or on a bus. No matter where you are headed, there are ways to make travel easier. This is especially true if you are traveling with kids and you are headed to Disney. An airport shuttle or another type of organized transportation will get you from the airport to your hotel and back with ease.Once you have arrived at your destination, you should take some time to regroup in your hotel room. This is important because you will need to travel again at the end of the trip, so anything you can do now will make things flow better when your vacation has ended. The last thing anyone wants to do is deal with stress when their vacation has ended and they are headed home. It is bad enough your trip is over and you are going back to your workaday world; you should not have to leave in a hassle and get home more stressed than you were when you left. If you traveled with a passport, be sure you keep it in a safe place during the vacation. Any other important travel document should also be stored in a safe place. Consider putting them in a compartment of your suitcase that will be ignored until it is time to travel again.Take a quick peek at your luggage to make sure the identity tags held up. If you need to replace them, do so now so you do not forget when it is time to board the plane. Also be sure you have written down the time of your return flight and made arrangements to get back to the airport. This way, you will not have to concern yourself with any of these details once your mind is relaxing and in vacation mode. If you want to have a stress free, fun, safe vacation, it is important to plan ahead. If you wait until the last minute to make your arrangements, the trip can cause you more stress than your everyday life. Instead of traveling frazzled, plan ahead, get organized, and enjoy a great trip.
Are We Talking About “Health Care” Reform, Or “Sickness Care” Reform?
All the talk about “Health Care Reform” has certainly ignited a fire in countless Americans! Every national news and talk radio show is focused on this hot button topic recently.The economic crisis is clearly the catalyst for the proposed sweeping changes in national “health” care. Scarce funds and resources, as well as a pending economic “collapse” (as some describe) are forcing us to consider how to manage health care in tough times… and in extreme circumstances.We’re hearing terms like “rationed health care”, “socialized medicine”, “universal insurance” and the “value of human life”. It’s no wonder this subject has sparked such heated dialogue.Spending the first 23 years of my life in “socialist” Canada, and still spending much time and energy in their medical system with both of my parents, I may have a different perspective from the sensationalized one being portrayed in media.I’m perfectly willing to admit that I don’t understand all the politics and red tape involved. I simply have a memory of how things really played out in that system and countless experiences to call upon.Growing up, I quite clearly recall paying out of pocket for many doctor’s and specialist’s visits, treatments and procedures, and paying a partial “co-pay” for the remaining forms of care: physical therapy, surgery, prescriptions, etc. Not exactly the picture I continue to see painted on the news.Studying and working within the field of health and wellness for the past 18 years, I know I have a different perspective. First, I wish we’d quit calling this “health care”. The subject of this conversation is “sickness care”. I know I can’t change that, but it annoys me! Words are important.I have no challenge with paying for – investing in – my own health. I will gladly invest in lifestyle choices that proactively build better health. Choices like: healthier foods, high quality nutritional supplements, pure water, exercise classes, equipment and tools, Chiropractic care, massage, less toxic personal care, household and lawn care products, and so on. I don’t expect a hand out for any of these things… although it would sure be nice! It’s just not realistic. My health and my family’s health is my responsibility.If we continue to talk about sickness care as though it will somehow provide us with health, we’ll continue on our devastating trend of unparalleled rates of chronic illness in all age groups. We’re confused.What drug, surgery, insurance plan or federal program could ever fix a problem due to a lack of fresh, healthy, whole, untainted (genetically required) real foods? Or a problem due to sedentary living and lack of regular (genetically required) movement? Or a problem due to a lack of healthy emotions like love and joy? Or a problem due to toxic thoughts and emotions like fear, worry, hate and hopelessness?Thinking that national “health care” is responsible for our health is irresponsible on our part. It’s also foolish. Their paradigm is still the sickness paradigm. Why on earth would we expect them to deliver us health?Do I think that we should have a system to help those in need achieve better health and receive sickness care when needed? Yes. But I sure would love to see the main focus of such a program be on “health”! I’m certain we’d spend FAR less on sickness care (and “health care” as a whole) if that were the case.I’d also love to see the pharmaceutical industry focus on health rather than profits, and drugs only be used for life-saving endeavors… but I digress!I’m blessed to live in a country with excellent sickness care options. In the case of emergency or trauma or life-saving procedures we have the best. In the case of “health care”… not so much! Sadly though, it’s all there. Everything we need in order to create ideal health is right here at our fingertips. As a culture, we just keep overlooking it and choosing sickness care, expecting health as the outcome.Our paradigm is inaccurate.As individuals, imagine if we all began to proactively take steps to create better health. We would no longer play the role of passive by-stander or helpless victim in this game. That’s where I think our focus needs to shift – why wait around to see what’s decided FOR us? Regardless of whatever decisions are made by this current administration, we can certainly become healthier one by one, family by family. Isn’t this the perfect, most necessary time to take responsibility for our own health and safety?Science has clearly shown us that it’s our lifestyle choices – how we eat, how we move, how we sleep, how we respond to stress – that directly determine our level of health, function, performance and our ability to prevent and reverse chronic illness. Getting healthier means making more pure and sufficient choices while simultaneously reducing toxic and deficient choices. No one can do this for us but US.When we shift to this responsible, proactive and accurate belief about health care, THEN we will have a truly beneficial health care reform and a profound strengthening of our economy!