investments on SWiK

5 Ways to Pick Mutual Fund Winners

Tue, 19 Aug 2008 07:33:18 -0700

Erollover.com 2008

By Jonathan Burton

How good are the mutual funds in your 401(k)?

It would be nice if there were a scorecard. But rating the investments you hope will glitter in your golden years can be a confusing process. That’s one reason why so many investors have embraced so-called target-date or lifecycle funds, which take care of the guesswork.

Those who still want to pick their own 401(k) investment lineup often don’t know how, or where, to start. So they wind up defaulting to funds with the best track records.

That’s not strategy, it’s performance chasing — buying high and selling low — and it leads investors nowhere, says David B. Armstrong, managing director at Monument Wealth Management, in Alexandria, Va.

“They’re picking mutual funds that have been doing very well and not giving proper consideration to the appropriate allocation,” he says.

To tell which stock funds in your retirement account are right for you, look beyond performance. Take a page from the methods investment experts likely used for your own company’s 401(k) plan. Here are five things to keep in mind:

1. Expenses

In many cases, 401(k) plans offer one actively managed fund and one indexed alternative. Since indexed management is usually cheaper, make sure you’re getting your money’s worth from an actively run choice.

Costs matter. An index fund that charges one-tenth of a percentage point in yearly management fees, for example, has a full percentage point head start over a fund that takes 1.1%.

Accordingly, the manager of the more expensive portfolio has a steep hurdle to deliver above-average returns over time. Don’t pay top dollar for mediocre results.

“Every penny we can save on expenses is going to translate to better performance,” says Donald Trone, president of the Foundation for Fiduciary Studies, which educates investment advisers.

2. Risk-Adjusted Return

You can’t judge a fund by its advertised performance. Understand the risks a manager took to generate those returns — maybe the fund loaded up on a hot stock, or the manager traded frequently, playing the market’s momentum. Otherwise, you run a risk too — that you’ll fork over good money to a fund that exposed you to more volatility that you can comfortably handle.

“Big stakes in any one sector is good reason to dig deeper,” says Christine Benz, director of personal finance at investment researcher Morningstar. “How does that fit with the manager’s strategy, and how has that played out for the fund?”

One key measure of a fund’s risk-adjusted return is a technical term called standard deviation. It shows how much a fund’s performance varies, or deviates, from its expected return.

You won’t need a slide rule. Sites such as Morningstar.com do the math for you. Click on “Risk Measures.” The bigger the number, the more risky the fund. So if Fund A gained 11% with a standard deviation of 18, and Fund B rose 10% with a standard deviation of 12, then Fund B achieved almost the same results with two-thirds of the volatility and would have a better risk-adjusted return.

“Standard deviation can help you see which fund has had higher volatility and has probably been taking more risks,” Ms. Benz says.

3. Results vs. Peers

You also want to look at a fund’s performance relative to its category. Investors frequently make the mistake of comparing funds with “the market,” which usually means the benchmark Standard & Poor’s 500-stock index.

But the S&P 500 is a large-company U.S. stock index. The only funds to rate against it are large-cap U.S. stock funds; anything else is simply misplaced.

A small-cap stock fund may look great compared with the S&P 500, but it may have underperformed the more fitting Russell 2000 Index benchmark. Similarly, an international small-cap stock fund has no business in the same pool as its U.S. small-cap counterpart. Again, Morningstar.com makes this information readily available. Click on “Total Returns” to see how a fund stacks up in its category.

Be sure that all of your fund choices are related, says Mr. Armstrong, the Virginia financial adviser. If they’re not, “you really can’t determine if the portfolio manager is doing a good job” or if you should just buy an index fund.

4. Portfolio Yield

Performance-chasing is bad enough, but investors also reach for yield — the dividend income that can provide a cushion in difficult markets.

“I’ve seen clients get stars in their eyes over a high yield,” Mr. Armstrong says. They forget there’s a reason for this excess payout — and not always a good one.

Beware of a fund with a yield that’s out of synch with its peers. Maybe the high yield comes from a heavy dose of financial-services stocks or lower-quality investments. In that case, not only is the yield shaky — some banks have cut or eliminated their dividends, for example — but even the most generous dividend won’t offset major declines.

5. Manager Tenure

The big consulting firms that cobble 401(k) plans together grow cautious when a fund switches managers. And you should, too.

Fund companies will protest to the contrary, but new managers are game-changers. While the fund’s investment style might not be drastically altered, you can bet the portfolio itself will get a makeover.

If a fund manager has been on the job for only a year, then the fund’s three- and five-year performance isn’t his to boast about.

You can be more charitable when a new manager is a veteran who has experienced bull- and bear-market cycles.

Says Lou Stanasolovich, president of Legend Financial Advisors in Pittsburgh, Pa.: “If a manager changes, you’re in effect starting a new fund.”

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I’m Too Young, I’m Too Old, I’m Almost Old Enough, Should I Have A Retirement Plan?

Mon, 18 Aug 2008 13:07:24 -0700

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Submitted By: Nocita

Yes retirement planning is important for all of us. This is not an easy subject for any of us to talk about, but, we must discuss it sooner rather later!

We want to be able to enjoy our golden years comfortably without having to worry about our finances. Planning your retirement is a crucial key to making this happen.

So, what do I need to do to plan for my retirement? You can start by asking and answering some or all of these questions: How long will it be before I retire? Do I have money already saved for retirement and if so, will it be enough for me to retire on? How much money should I put away for my retirement? How should I invest my money in order to achieve the amount of money I want to retire on? How much money will I need to live on to maintain my present and future lifestyle?

All of these retirement planning questions are important for you to think about in order to have solid retirement planning. Once you have answers to these questions, then proceed to start your retirement savings now!

What are some of the areas I can invest my money in for retirement? Stocks, bonds, certificate of deposits, mutual funds, 401K, IRA, Roth IRA, annuities and many other miscellaneous investment vehicles.

Where can I expect to withdraw money for my retirement? Social Security, savings, pension plans, and your investments from 401K plans, certificate of deposits and other investments.

How much money will I need for retirement? It is estimated that you will need approximately 60-80% of your current income at the time of your retirement. This will allow you to live the lifestyle you are accustomed to having by the time you retire.

When should I start saving for retirement? Now! It’s never too early or late to start saving for your retirement. The sooner you start the more money you will have for your golden years to live on.
About the Author
Nocita is a writer and web designer that creates websites providing informative tips on various subject matter including personal finance tips on your personal finances at http://www.personal-finance-tips-for-you.com
Published At: www.Isnare.com
Permanent Link: http://www.isnare.com/?aid=45089&ca=Finances

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401K Rollover or 401K Withdrawal?

Mon, 18 Aug 2008 13:07:24 -0700

eRollover.com, your source for 401k, IRA, and retirement planning information is set to go live this week!

Submitted By: Timothy Simmons

When you get to the later stages of retirement planning it’s important to understand the distribution process. You may be retiring in need of income, or just simply changing jobs. Regardless, there is a particular protocol that should be followed. If done improperly, it can prove costly. If done correctly, the savings can be substantial.

If you’re fortunate enough to have an employer that offers a 401k retirement plan, you may have procured quite a nest egg over the years. So, if you’re separating from service, it is important to handle everything properly. When it comes to your 401k withdrawal it’s important that you understand the process. First of all, when withdrawing from any type of qualified plan, whether it’s for income or a complete withdrawal, there can be consequences. If year 59 1/2 or older, you can take withdrawals from your 401k, without penalty. If you have a traditional 401k retirement plan, withdrawals are taxed at your income rate. At age 70 1/2, you are required to take mandatory withdrawals call required minimum distribution, or RMD. 401k withdrawals made prior to age 59 1/2 are subject to both income tax and premature withdrawal penalties. These penalties can be avoided by doing what’s called a 401k rollover.

A 401k rollover allows you to move your 401k funds to another account. This is most commonly done by moving the funds to an Individual Retirement Account, or IRA. By making a 401k rollover to an individual account you not only get complete control, but also you have access to much more investment selection. This is often preferred when changing jobs or retiring. For these individuals, leaving funds at their previous employer doesn’t make much sense.

When it comes to making the move you can make a 401k withdrawal in the form of a lump sum distribution. This is subject to a 10% penalty, if you’re under 59 1/2 years old. Additionally, employers are required to withhold 20% that goes towards income taxes. The exception to this would be making withdrawal for a first time home purchase. You can withdraw up to $10,000 out of an IRA or 401k plan, without penalty, as long as it is for the purchase of your first home. The other way is to rollover those funds into an IRA or another employer’s retirement fund without these penalties. In order to avoid these penalties, the rollover must be completed within 60 days. The best way to do a 401k rollover is to not do a physical 401k withdrawal at all. You can do a direct transfer into your IRA account or new employers retirement plan. This is preferable, but the 401k withdrawal can be done either way.

If you want to avoid premature withdrawal penalties you can commonly do what’s called a 401k loan. This really should be avoided, however, unless you’re in a very dire situation. The main reason being is that when it comes to paying back your 401k loan, you’ll be doing so with after-tax dollars. Considering your contributions were pretax dollars, this makes for a very expensive loan, making even loan sharks jealous. If you plan to do a 401k rollover and have a 401k loan balance, you will be required to pay it off expeditiously. It’s recommended that you find a more appropriate loan source.

An investment professional can be invaluable when it comes to this stage of retirement planning. He or she should be well versed in recent regulation, which could affect your retirement. It may or may not be appropriate for you to take a 401k rollover or 401k withdrawal; a little bit of the assistance is invaluable.

About the Author
You can learn more about the 401k Rollover process by reviewing this resource. For more on the 401k withdrawal basics, that is covered as well.

Published At: www.Isnare.com
Permanent Link: http://www.isnare.com/?aid=275662&ca=Finances

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Asset Allocation: A Sound Investment Strategy

Mon, 18 Aug 2008 13:07:23 -0700

Asset Allocation: A Sound Investment Strategy
Erollover.com 2008

In today’s complex financial markets, you have an impressive array of investment vehicles
from which to select. Each investment also carries some risks, making it important to
choose wisely if you are selecting just one.

The good news is that there’s no rule that says you must stick with only one type of
investment. In fact, you can potentially lower your investment risk and increase your
chances of meeting your investment goals by practicing “asset allocation”.
What Is Asset Allocation?

Asset allocation refers to the way in which you weight diverse investments in your
portfolio in order to try to meet a specific objective. For instance, if your goal is to pursue
growth (and you’re willing to take on market risk in order to do so), you may decide to
place 20% of your assets in bonds and 80% in stocks.

The asset classes you choose, and how you weight your investment in each, will probably
hinge on your investment time frame and how that matches with the risks and rewards of
each asset class.

Stocks, Bonds, and Money Markets Here’s a closer look at the risk and reward levels of
the major asset classes:

* Stocks — Well-known for fluctuating frequently in value, stocks carry a high level of
market risk (the risk that your investments’ value will decrease after you purchase them)
over the short term. However, stocks have historically earned higher returns than other
asset classes by a wide margin, although past performance is no predictor of future
results. Stocks have also outpaced inflation (the rising prices of goods and services) at
the highest rate through the years, and therefore carry very low inflation risk.

* Bonds — In general, these securities have less severe short-term price fluctuations
than stocks and therefore offer lower market risk. On the other hand, their overall
inflation risk tends to be higher than that of stocks, as their long-term return potential is
also lower.

* Money market instruments1 — Amongst the most stable of all asset classes in terms of
returns, money market instruments carry very low market risk. At the same time, these
securities don’t have the potential to outpace inflation by as wide a margin through the
years as stocks.

1An investment in a money market fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the fund
seeks to preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the fund.

Before exploring just how you can put an asset allocation strategy to work to help you
meet your investment goals, you should first understand how diversification (the process
of helping reduce risk by investing in several different types of individual mutual funds,
target date funds, target risk funds or individual securities) work hand in hand with asset
allocation.

When you diversify your investments among more than one security, you help reduce
what is known as “single-security risk”, or the risk that your investment will fluctuate widely
in value with the price of one holding. Diversifying amongst several asset classes
increases the chance that, if and when the return of one investment is falling, the return
of another in your portfolio may be rising (though there are no guarantees).

For example, in 2002, large-company stocks lost 22.1%, while long-term government
bonds returned 13.8%2. (Keep in mind that past performance cannot guarantee future
results.)

This chart illustrates sample portfolio asset allocations: Low Risk (those nearing or in
retirement); Moderate Risk (middle-aged investors); Aggressive Risk (younger investors).
*Allocations are presented only as examples and are not intended as investment advice.
Consult a financial representative if you have any questions about how these examples
apply to your situation.
Asset Allocation Can Work

The above chart can help you select an appropriate allocation for your investment
portfolio based on your life stage. For instance, at age 25 you may decide to invest with
the goal of retiring in comfort within 40 years. Most likely, your investment goal is to
achieve as much growth as possible — growth that will outpace inflation substantially. In
aiming to reach this goal, you may allocate 70% of your assets into aggressive growth
stocks, 20% into bonds, and 10% into money market instruments. You have years to ride
out the wide fluctuations that come with stocks, but at the same time, you potentially lower
your risk with your bond and money market holdings.

Because your goals and circumstances are unique, you may want to talk with a financial
representative who can help you tailor an allocation strategy for your needs. Generally,
your asset allocation will change as you reach different stages in your life, as your
investment goals also change along with these shifts in lifestyle.

If you have been investing aggressively for retirement for more than 20 years and are
now less than 10 years from retiring, protecting what your investment may have earned
from market ups and downs may become more important. In this case you may want to
gradually shift some of your investment allocation into your bond and money market
holdings. Keep in mind, however, that many financial experts recommend that some
growth investments be considered for every portfolio to potentially protect your buying
power in the future.
A Simple Process, Some Dramatic Potential Results

Asset allocation is a simple concept, yet vital to long-term investment success. In fact, a
landmark study cited in Financial Analysts Journal shows that about 90% of the variability
of average total returns earned by balanced mutual funds and pension plans over time
was the result of asset allocation policy23. For many individual investors, the asset
allocation decision amounts to choosing what types of mutual funds to invest in and the
amount to invest in each type of fund. Others may want to add individual securities to this
mix after exploring their investment options.

Regardless of the asset allocation strategy you choose and the investments you select,
keep in mind that a well-crafted plan of action over the long-term can help you weather all
sorts of changing market conditions as you aim to meet your investment goal(s).
Points to Remember

1. Asset allocation is the way in which you spread your investment portfolio among
different asset classes, such as stocks, stock mutual funds, target risk funds, target date
funds, bonds and bond mutual funds.

2. When prices of different types of assets do not move in tandem, combining these
investments in a portfolio can help reduce the variability of returns, commonly referred to
as “market risk”.

3. Mutual funds are pools of securities, usually offering diversification within a single
asset class. Some mutual funds like target risk and target date funds may include several
asset classes.

4. The asset allocation that is right for you depends on your investment timeframe, goals
and tolerance for risk.

5. As your investment timeframe and goals change, so might your asset allocation. Many
financial experts suggest reevaluating your asset allocation periodically or whenever you
experience a milestone event in your life such as marriage, the birth of a child, or
retirement.

Asset allocation and diversification do not assure a profit or protect against a loss.

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Now Is The Time To Open Your 401k For Retirement

Mon, 18 Aug 2008 13:07:14 -0700

Erollover.com 2008

Now Is The Time To Open Your 401k For Retirement

Submitted By: Rebecca Game

What is a 401(k) plan?

The name is derived from the Internal Revenue Code established in 1978. It’s presently administered by the government section called the Employee Benefits Security Administration, also known as the EBSA.

A 401(k) plan is a plan usually used for retirement and is funded by an employee contribution. Some companies will match the contributions up to 100% of the employee’s contribution and yet some companies do not offer any matching funding. The BNSF Railroad is one of these such companies that does not offer even a $1 match for their employees.

The funds are contributed from the employee’s paycheck BEFORE taxes. The fund will accumulate completely tax free until it is withdrawn. Most businesses or companies have these retirement plans in place or they can create them.

There are a lot of advantages of having a 401K plan:

1. Employees can contribute pre-tax money which helps reduce the tax owed from their paychecks.

2. Any company contributions are also tax free until withdrawn.

3. As the funds are compounding, you are attaining a good profit on your invested funds.

4. The money you have funded in the plan can be moved around from one company to another. This isn’t available in a pension.

5. Your 401K is also protected from garnishments and is protected by pension laws because it is a personal investment plan. The only time it is not protected from garnishments is in domestic caes or cases of child support, but it IS protected from creditors.

6. You can borrow against your own 401(k) and the payments you make are put back into your own account along with the interest. The interest you pay on the loan is paid to you as well. You are actually borrowing the money from yourself and paying yourself back with interest. Most plans only allow you to borrow up to 50% of your fund account and only 2 loans at a time. You can borrow more than once if you find yourself in a financial hardship.

You should note that it is hard to get your contributions, (aside from a loan), before the age of 60 without paying a lot of penalty fees. The penalty fees can take a lot of the interest profit you may have received over the years. The plan is not insured by the Pension Benefit Gauranty Corporation, also known as the PBGC.

You do have many options for investing in your 401K plan. You will usually be investing in mutual funds. This helps protect you from having all your eggs in one basket. Mutual funds can consist of:

Money market funds
Treasuries
Stock funds
Bond funds

Since the 401K plan is a long term investment, it should be able to handle market fluctuations without damage to your fund. Since stocks usually outperform other types of investment this is a great option for retirement security.

About the Author
Rebecca Game is the founder of Digital Women ®, an online community for women in business. A 30 year entrepreneur and dedicated to helping other women find business loans and business grants. Visit her site: http://www.digital-women.com Loans for Women http://www.digital-women.com

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Peak Fund Management

Wed, 23 Jul 2008 15:53:29 -0700

Moodlerooms

Sat, 31 May 2008 04:45:45 -0700

Securities Institute - Securities Training

Thu, 29 May 2008 18:46:00 -0700

[from bushwald] Dubai investment fund takes 'substantial' stake in Sony

Mon, 26 Nov 2007 12:39:14 -0800

The Australian Investment Network

Fri, 26 Oct 2007 02:03:13 -0700

Despite the Summer, VCs Kept On Funding

Mon, 22 Oct 2007 09:04:09 -0700

Despite the seasonal summer slowdown, the venture capital community maintained its furious investing pace in the third quarter, investing $7.1 billion, down just slightly from $7.2 billion in the second quarter. Here are some of the highlights from the data released by PricewaterhouseCoopers and the National Venture Capital Association (and based on data provided by Thomson Financial). (Press Release in PDF format.)

Internet-specific companies took in $1.1 billion via 195 deals in the third quarter, a 17-percent rise, on a dollar basis, over the second quarter, when $903 million went into 160 deals.
Media and entertainment saw $509 million go into 96 deals, an increase in terms of both deals and dollars from the second quarter, when $464 million went into 77 deals.
Seed and early-stage investing dollars in the third quarter fell 15 percent, to $1.4 billion in 305 deals from $1.7 billion in 395 deals in the prior quarter.
U.S.-based venture capitalists invested $206 million in 31 deals in China, down 52 percent from the second quarter, when $429 million was invested in 38 deals. Also in the quarter, U.S. venture capitalists invested $248 million in 22 deals in India vs. $119 million invested in 18 companies during the second quarter.

Skype Founders Invest in Frenzoo

Mon, 28 May 2007 02:15:01 -0700

Ambient Sound Investments, a company established by the four co-founding engineers of Skype, have invested in the Hong Kong based 3D social networking company Frenzoo as part of a Series A round of investment aimed at expanding the service through out Asia.

ASI owners include Priit Kasesalu and Jaan Tallinn, Senior Developers at Skype, Ahti Heinla, Chief Architect at Skype and Toivo Annu, a former Skype Head of Engineering.

Frenzoo enables users to connect with friends by becoming “budding fashionistas”. Users can express themselves by personalizing 3D characters, and can mix-and-match a variety of branded clothes, footwear, accessories, furniture and lifestyle items.

Frenzoo utilizes a “RealFashion 3D Engine” that simulates a user’s character, clothing and living environments in true 3D, leveraging recent advances in graphics hardware. The Frenzoo application is a downloadable program offering native social network browsing and instant messaging.

Terms of the deal were not disclosed. Frenzoo is currently in closed beta with a launch date scheduled for the second half of 2007.

Crunch Network: MobileCrunch Mobile Gadgets and Applications, Delivered Daily.

Top 10 IT priorities at the DoD - Network World

Sun, 22 Apr 2007 11:54:21 -0700

Podcast Ad Insertion Firm Kiptronic Raises $4 Million

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Welcome to LinuxFund.org

Mon, 23 Oct 2006 21:30:12 -0700