October 26, 2010
Dealing With Uncertainty
With continued economic uncertainty, many would rather pay off the mortgage than invest. But, however tempting it is, keeping cash under the mattress is not the best choice, says Mary Claire Allvine, CFP and Principal with Brownson, Rehmus & Foxworth, Inc., a financial planning firm specializing in the self-made wealthy. "You've got to do something. Not acting is dangerous."
Small investors pulled out more than $33 billion from the domestic stock market so far this year. So what can working women do to combat economic woes as the recovery begins? Putting money into various asset classes, including stocks, bonds, short and long term investments will result in "less volatile portfolio returns over the long term and can help minimize downside risk," says Fidelity.
Experts recommend a minimum of a dozen different stocks. You can also diversify by purchasing stocks in different markets like technology, energy or consumer products. Better yet, check out index funds that automatically evolve with the economy.
Still think diversifying your finances is something better left to experts? Peter Lynch, financial guru and author of the critically acclaimed Learn to Earn begs to differ. Lynch says, "Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it."
Determine what kind of investor you are by looking at how much risk you're willing to take. Each investor's portfolio has unique attributes. Investopedia has an e-crash course called Investing 101 for Beginners. Here's a quick quiz to help you take charge of your financial future.
Bonus PINK Link: Now that you've diversified your savings, here's how to get your financial planning on track.
By Cynthia Good
"In all realms of life it takes courage to stretch your limits, express your power, and fulfill your potential... it's no different in the financial realm." Suze Orman