The financial media has a vested interest in portraying investing to be an especially difficult task, and they do a pretty good job of it.  But deciding between various types of investments you should buy to build a strong and diversified portfolio should not be based on some flashy advertisement. Is it better to invest in actively managed mutual funds or is it wiser to invest in index funds? The financial media would have you believe actively managed funds are the key to investment riches, but there is strong evidence that index funds are by far the better buy.

Investors looking to get more bang for their buck should consider ditching actively management funds for a diversified portfolio of low cost index funds.

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If you’re like most people, looking back over the past few years can leave a bitter taste in your mouth in regards to personal finances.  One good thing about making mistakes…you get to learn from them!  Moving forward, we all have an opportunity to make changes in how we manage our money and investments to avoid some of the mistakes of the past.  Reviewing your past investing strategies can help you pinpoint areas that could use a bit of tweaking.  Here we look at how you can adjust your investment strategy to better serve your needs.

Take Stock

Whether you’re rich or poor, everyone has been affected by the recession.  What worked in the past?  What didn’t?  Was your emergency fund too small to survive a lay-off?  Or was it large enough at first, but you ended up squandering your savings on non-emergencies?  Did you panic and sell your investments at the bottom?  Honest answers to these questions will help you decide what, if anything, you need to adjust going forward.

Consider The Risk

If you’ve spent years building a nest egg only to see it cut in half, you might be considering one of the following paths:  an aggressive approach to quickly rebuild your savings or a more cautious approach to limit future loss.  I urge you to avoid giving into either impulse.  What’s done is done, and you can’t get your money back.  Going for broke is obviously extremely risky, but so is investing so conservatively that you’d have no chance of reaching your goals.  It is important to reevaluate your risk tolerance in light of recent losses to determine if you were perhaps a little aggressive in your asset allocation.  If you panicked, you should adding more cash and bonds to your portfolio.  If, on the other hand, you brushed off your losses and had no trouble sleeping at night, you might even consider increasing your equity exposure.

Review Your Asset Allocation

Once you have determined your risk tolerance you should take a second look at your asset allocation.  Risk tolerance is only part of the equation, after all:  your need to take risk is at least as important as your ability to take risk in determining how to divvy up your investment dollars.  After much consideration, I decided to make a few changes to my Roth IRA allocation.  These tweaks were more about rounding out my asset allocation with a few minor asset classes than recalibrating its risk profile, however.

Stay The Course

When stocks are plummeting, it’s tempting to jump on the band wagon and follow what everyone else is doing:  namely, sell.  Likewise, when the market is going gangbusters (like it has been recently, especially REITs), it’s tempting to jump at what’s working right now.  It is imperative you do your own homework and that you adjust your investment strategy to reflect your own personal needs and comfort level.  What works for your neighbor, boss or physician may not be what is right for your situation.  Nobody cares as much about your finances as you do.  Only you can decide what asset allocation is right for you.

You should review your investment strategy on a regular basis regardless of the state of the economy because your needs and goals will change over the years.

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Don’t worry if you have bad credit, there are host of card companies willing to take a chance with unsecured credit for people with poor or less than perfect credit. There are lenders who understand that a less than stellar credit rating an unsecured card may be the answer during the Christmas crunch. As shoppers visit the retail malls and merchants they will be offered a host of cards from each and every store. Signing up for in house store cards is one way to get the intro-rate and discounts but be aware that you must completely understand the terms and agreements of the card before signing up. If you think that you are getting ‘rewards’ and don’t want to give up the card because of the rewards then work out the details. If the Read more…

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The euro slipped to $1.4283 at 8:06 a.m. in New York, from $1.4384 yesterday, and traded as low as $1.4263, its weakest level since Jan. 4 and marking its fourth straight day of losses against the US dollar.

“The euro zone is probably going to trail behind the recovery in other major economies,” said Toshi Honda, a strategist in London at Mizuho Corporate Bank Ltd. “We are not short of excuses to sell the euro.”

Bloomberg

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There are many compelling reasons why everyone should buy some gold for a rainy day. But why buy gold coins and bullion now when the price of an ounce of gold is hovering well over $1,100? There are many compelling reasons, besides Glenn Beck and others telling you to buy gold. Speaking of Gold Line International which Beck and others push, they have simply ridiculously high prices on gold coins and bullion. I should write an article why you should not buy gold from Gold Line. The premium they charge of the spot price is around $200, depending on the coins you buy. We touched the topic of the premium in What gold to buy – gold coins to buy. But back to the main topic and let’s start with several key observations.

1. Gold is the best hedge against a declining U.S. dollar. The value of the U.S.

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