4 Funds to Cut Your Risk in a Stock Market Correction
I don’t think that the recent market rumblings are signaling the onset of a bear market. But stocks are richly priced, and we’re overdue for at least a 10% plunge in share prices, which typically occurs once or twice a year, shaking investors’ confidence. Particularly if the eight-year bull market has pushed your allocation to stocks higher than you intended, this could be an ideal time to reduce risk. We suggest here three first-rate exchange-traded funds and one mutual fund
Is the Tail Wagging the Dog?
So many investors have been bailing out of actively managed mutual funds and piling into index and quasi-index funds via exchange-traded funds (ETFs) that, as Bloomberg Business Week points out, we’ve reached the point where there are now “more cartons than eggs.” That is, “the number of market indexes” [most created for ETFs to track] “now exceeds the number of U.S. stocks.” This most recent stampede has long precedent: When investors want something, Wall Street supplies it—
Six Tips for Picking Top Funds
The sad truth is that roughly two-thirds of all actively managed mutual funds fail to beat their benchmarks. Most investors are better off sticking with funds that simply try to mimic an index; their typically low costs give them a big edge over most actively managed funds. If you want to invest in actively run funds, you need to devote time to picking good ones. Start by following my six rules for successful fund picking: 1. Focus on expenses. Morningstar has found that cost
