Easy Way to Put Investment Services to Work for You

A lot of people like to sit back and let their Naperville investment services handle all of the work for them. This, however, is a bad idea since it takes you—the investor—out of the driver’s seat and puts someone else in control of your finances. Though that’s fine if you have a skilled Naperville investment advisor whom you can trust, it keeps you from learning and growing and from one day being able to make your own smart investment decisions. Why not trust yourself and take the reins by finding simple, easy ways to up your investment ante?

One suggestion is to simply increase the amount of money you are putting into your 401k. Take what you are currently contributing now and just add a few dollars to it or, if you really want to make a difference, try doubling it. This strategy is an even smarter move if your employer has agreed to match your contribution. If you don’t have the funds to increase your 401k contribution, talk to your Naperville investment services provider. They can often go through your finances and find ways in which you’re overspending. Once you’ve put an end to unnecessary spending, you’ll have more money to invest in your 401k and to use in other financially smart endeavors.

You might also want to consider making some small investments in very stable, trustworthy stocks. Well-known, long-lasting corporations, like McDonald’s or even Levi’s jeans, are usually a safe bet and can help you to accumulate money gradually over a long time period. If you’re unsure about the security of a particular stock investment, don’t hesitate to ask for advice from your investment advisor.

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Making Smart Investments

Every business or company will, at some point, need to make the right kind of investments in order to grow and prosper. Many business owners look at investments as a gamble, and while there is certainly some element of chance or “the luck of the draw” involved, you can actually know, nine times out of ten, whether or not a particular investment is a smart move. Many people think they can achieve this type of knowledge without a Naperville investment advisor working for them and, while it is possible to have this happen, it isn’t very likely.

In order to make a smart investment each and every time, you’d have to do a lot of research. You’d have to spend hours reading up on the financial history and current financial status of the entity you are thinking of investing in. If you’re like the average business owner, however, you simply don’t have that kind of time on your hands. Plus, even if you did, are you really knowledgeable and experienced enough with investments to make your decisions with absolute certainty? There’s nothing wrong with admitting that you’re not. You are, after all, not an investment expert, but you can hire one to work for you and your business.

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Protect Your Finances

With the economy in flux, now is the time to shore up your funds. Here are three areas to focus on.

By Ryan Mack

From the controversy over the debt ceiling to the Dow Jones index fluctuations in recent months, the economic ups and downs of the past few years have left many of us wondering when the turbulence will finally subside. Navigating these financial highs and lows has been a rocky road. Still, now is not the time to panic. Follow these smart moves to help protect your financial future.

HOW TO HELP PRESERVE YOUR...

LOANS AND CREDIT LINES

Those who will benefit most from falling interest rates are people who have high liquidity and good credit scores. Go to annualcreditreport.com to start repairing or building your credit. And stash some cash. Your goal should be to save up to 12 months of living expenses.

Pay bills on time. It may sound simple, but making timely bill payments can decrease the chance of a rate spike. If you have good credit, check in with creditors every six months to negotiate a better rate.

Watch interest rates. Federal Reserve Chairman Ben S. Bernanke’s decision to keep rates close to zero through 2013 means that the variable rate on your credit card will stay low. To compare rates, go to bankrate.com.

RETIREMENT SAVINGS

The worst thing to do is to make a knee-jerk decision that locks in losses. Think of falling stock prices as you might a shoe sale. Cheap can be good! Consider picking up more shares now, and regularly discuss asset allocation and risk tolerance with your financial adviser. Other stopgaps:

Consider safe havens. Talk to your adviser about other avenues that can provide a decent yield in your portfolio, like municipal bonds, which can help protect your initial investment while earning you tax-free interest.

Bond investing is subject to risks, such as interest rate, credit and inflation risk. As interest rates rise, bond prices fall. Long-term bonds have more exposure to interest rate risk than short-term bonds. Unlike bonds, bond funds have ongoing fees and expenses. Lower-rated bonds may offer higher yields in return for more risk.

Manage your 401(k). Review the plan to familiarize yourself with your portfolio of investments. Then talk to your adviser to be sure you have the appropriate asset allocation. Check your plan at least twice a year to monitor performance.

REAL ESTATE

Mortgage rates should stay low for at least the next several months. Rates are tied to the U.S. Treasury, so consider refinancing to lock in a better interest rate. If you are at risk of foreclosure, contact hud.gov to find a credit counselor who can help you save your home. Additional actions:

Invest for less. You can’t stop your home from depreciating, but you can maybe take advantage of opportunities that a volatile market presents. Consider pooling funds with family and close friends to buy investment property. That way, you’ll mitigate the risk of full ownership.



From the October 2011 issue of Essence.© 2012 Time Inc. All rights reserved.

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What’s the ROI on Investing in Y.O.U.?

When deciding whether to fund the training you need to switch careers, try this calculation.
By Ali Velshi

One of the key measurements in deciding where to put your money is the expected ROI, or return on investment. History and the current state of the economy allow you to make an informed guess about how different assets or classes of assets may perform in the future.

Past performance is no guarantee of future results.

Calculating ROI is straightforward enough: You take the final value of an investment, subtract what it cost you and divide the result by your cost to arrive at the percentage yield. Buy a stock for $20 and sell it for $25 in a year, and your ROI is 25% (not counting trading costs).

What about calculating the ROI on you? More specifically, on the cost of reinventing yourself to better compete in the changing economy. Let's say you work in a shrinking industry and you want to make a mid-career switch into one that is growing. How do you figure out the return on that transformation?

This is a question that applies not only to the factory worker who sees jobs headed overseas but to anyone who thinks the decisions he or she made about the future while in high school or college are no longer valid. Unfortunately, there's no straightforward calculation that can account for all of the factors that go into making a career-switch decision. This isn't a straight financial investment, after all. Aptitude, what you value in life and your family situation are huge variables. Still, running a few numbers is a useful starting point.

FIGURING THE PAYOFF

For the purposes of this exercise, let's look at the ROI for a fairly senior manufacturing worker in Rhode Island who, at age 40, is trying to decide whether to retrain as a registered nurse. The starting salary for an R.N. in Rhode Island is about $60,000. Our experienced factory hand makes $53,000. So the difference in salaries from the start is substantial but not great. Our worker also has to invest to retrain as a nurse-- a minimum of a two-year associate's degree, at a cost of at least $40,000, plus financing-- and will have two fewer years of income.

So is this transformation worth it? Well, let's also remember that manufacturing wages haven't been growing much for quite a few years; nursing's wage growth is healthier, and a nurse will have more opportunity for advancement. Taking all of these considerations into account, the ROI on that nursing degree is around 9% a year.

There's more to this picture, however. The number of factory workers in the U.S. is expected to shrink by 50,000, or 2%, between 2008 and 2018, according to the Bureau of Labor Statistics. Over the same period, the number of R.N.'s is projected to grow 22%, to 3.2 million. The chances are much greater in manufacturing than nursing that you'll suffer a layoff and have to take a pay cut-- as 40% of workers let go and re-employed since 2008 have done.

WATCH FOR TRAPS

"Knowing with some certainty that a sector has a rosier long-term future does a lot for your peace of mind and makes it easier to think about growing older in this economy," says Sylvia Ann Hewlett, founding president of the Center for Work-Life Policy.

Still, Hewlett argues that switching to a field simply because it's growing could be "the kiss of death" Give up your job to invest in a career that you end up hating or that you're not very good at and you'll have done yourself no small amount of harm. And starting over can be difficult. There's the strain on the family budget, and the family, during retraining. And although R.N.'s aren't at the bottom of the nursing ladder, our worker will be at the bottom of the R.N. ladder, pulling the less desirable shifts. The calculation doesn't account for all that. The easy math, though, can tell you if it's worth thinking about the hard stuff that comes with making over your work life.

Turn to your Naperville Investment Advisor experts at Platinum Financial to accurately calculate your ROI.

From the November 2011 issue of Money© 2012 Time Inc. All rights reserved.

Becoming a More Rational Investor

Studies by the Investment Company Institute and the Federal Reserve Board indicate that investors’ willingness to assume risk tends to rise and fall with the stock market.¹ Of course, it’s not surprising that people are more likely to pour money into stocks when the market is trending upward and to retreat when the market trends downward.

To become a rational investor, the more important issue may be your perception of investment risk and how much you are willing to assume to pursue your long-term goals.

Behavioral Traits
The field of behavioral finance seeks to understand how and why investors react to different outcomes and events. One study indicates that people tend to have a subjective “reference point” for considering whether an investment is a success or a failure, and they may have different reference points for different investments.²

Investors also tend to react more emotionally to losses than to gains. They feel rewarded when an investment reaches a specific reference point, but when it doesn’t their negative feelings about not reaching it are much stronger.³ Fear and anxiety may lead investors to sell when the market falls steeply, as it did in 2008 and early 2009, which could result in their incurring a loss on their original investment and missing out on potential gains when the market begins to recover, as it did in late 2009 and in 2010.

If you relate to having some of these emotional reactions, you may want to examine your risk tolerance and consider whether your reference points are reasonable.

Is It All in the Brain?
Neuroscientists are discovering that many emotions and behaviors are “hard-wired” in the brain. Sensory input reaches a section of the brain called the amygdala first and can trigger a “fight or flight” response. The amygdala is essentially the brain’s “fear center.” In a study at the California Institute of Technology, patients with damaged amygdalas not only were more willing to take financial risks than the control group but demonstrated no fear of monetary loss. By contrast, people with healthy amygdalas exercised a level of caution toward risk taking.⁴

French researchers found that another area of the brain called the ventral striatum responds to the potential for reward and drives other responses to try to achieve it. In their tests, an increase in the dollar value of the potential reward created increased activity in the ventral striatum, which led to increased efforts to achieve the reward.⁵

The fact that your emotions may be influenced by specific areas of the brain does not mean they are out of your control. But research does suggest that a variety of psychological and physical factors could affect your decision making and might guide you in the wrong direction. Although you should be aware of these factors, it’s important to make investment decisions based on a rational analysis of your time horizon, risk tolerance, goals, and personal circumstances.

1) Investment Company Institute, 2011
2–3) advisorone.com, February 23, 2012
4) California Institute of Technology, 2010
5) sciencedaily.com, February 22, 2012

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent Naperville investment advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. Copyright © 2012 Emerald Connect, Inc.

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Inherited IRA's come with Critical Choices

Many people who inherit a tax-deferred IRA are confronted with a complex array of rules, restrictions, and deadlines that may make it difficult for them to determine how to proceed. Unfortunately, beneficiaries must often make binding decisions about inherited retirement assets before they may be prepared to do so.

Of course, beneficiaries can liquidate inherited IRA assets as they wish, but they should keep in mind that amounts withdrawn from a traditional IRA are taxed as ordinary income. A better long-term strategy might be to take only the withdrawals required by the IRS, leaving the rest of the inherited assets untouched to keep accumulating on a tax-deferred basis for as long as possible. This strategy may also help spread the tax liability over a longer period of time.

Understanding RMDs

Traditional IRAs are subject to required minimum distributions (RMDs). For original owners, RMDs must begin no later than April 1 of the year after the year in which the investor reaches age 70½. In subsequent years, RMDs must be taken by December 31. Annual RMD amounts are calculated based on the account value (on December 31 of the previous year) and the owner’s life expectancy. This information can be found in the IRS Uniform Lifetime Table.

IRA owners (as well as people who inherit a traditional IRA) who fail to take an RMD could be hit with a 50 percent tax penalty on the amount that should have been withdrawn. IRA beneficiaries are subject to special distribution rules. Spouses typically have more choices than nonspouses.

Three Options for Spouses

1. Roll assets to a new IRA. If the surviving spouse is the sole designated beneficiary, the funds can be rolled into a new account in his or her name. In this situation, the surviving spouse does not have to take RMDs until age 70½, and he or she can name new account beneficiaries. However, a 10% early-withdrawal penalty would apply to distributions prior to age 59½.

2. Transfer assets to an “inherited” or “beneficiary” IRA. If the deceased spouse died before age 70½, the survivor’s first RMD must be taken by December 31 of the year after the decedent’s death, or by December 31 of the year the deceased would have turned 70½ (whichever is later). If the deceased spouse died after age 70½, the surviving spouse must begin taking RMDs before December 31 of the year after death.

3. Pass assets to children or grandchildren. The surviving spouse (as sole beneficiary) can disclaim the IRA and allow it to pass directly to the account’s contingent beneficiaries.

Other Heirs

Generally, nonspouse beneficiaries must begin taking RMDs by December 31 of the year following the year of the original account owner’s death. However, if the original owner passed away after reaching age 70½ and did not take a current-year RMD, the beneficiary must take a distribution by December 31 of the year of death. It’s important for the IRA to be properly titled with the words “beneficiary” or “inherited.” There is no 10% early-distribution penalty for IRA beneficiaries.

RMD rules are even more complex when multiple beneficiaries are designated, and each choice could have far-reaching implications. You may want to seek legal or tax counsel before making any final decisions.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek Naperville tax, legal advice or Naperville investment advisor from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. Copyright © 2012 Emerald Connect, Inc.

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A Look Into 2012

The past year was marked by a devastating disaster in Japan, fiscal unravelling in Europe, a highly volatile market, and bitter political infighting over federal spending and the national debt. What’s in store for 2012? No one knows, of course, but the consensus seems to be that the U.S. economy will continue to grow slowly, with slight improvement in employment, little change in the housing market, and interest rates remaining at or near historic lows.1 In short, there may not be much to get excited about. But as 2011 proved, it’s impossible to predict the future. Here are several key areas that bear watching as 2012 unfolds.

European Enigma
A new fiscal pact in December engendered cautious optimism, but the European sovereign debt crisis is far from over. Although Italy and Spain remain a major concern, you might keep tabs on potential downgrading of the credit ratings of other large European economies including France, Austria, and Great Britain.

The European Union is the world’s second-largest economy after the United States and our largest trading partner.2–3 A devalued euro and a weakened European economy could lead to a shrinking market for U.S. exports at a time when the trade deficit has begun to improve — which may impact an already shaky U.S. jobs outlook.4

Although the European situation may require attention, it’s important not to overreact to international events. Investors’ emotions can contribute to market volatility.

GDP and Jobs
Following a very slow start in 2011, the U.S. economy grew at an annual rate of 1.8% in the third quarter. Forecasters project slightly higher growth through the end of 2012.5–6

After hovering around 9%, the unemployment rate unexpectedly dipped to 8.6% in November, the lowest level since March 2009.7 Although this appears to be good news, part of the statistical improvement reflects people who have given up looking for work.8 Many economists see unemployment falling no lower than 8.5% during 2012; but if the downward trend continues, it may mean better times to come.9–10

A major obstacle to job creation seems to be hesitation by U.S. corporations to make capital investments, despite many having larger cash reserves than ever before.11 One factor could be uncertainty over the global economic picture — yet another reason to keep a watchful eye on the European crisis. Another factor may be that the recession led to further utilization of technology and outsourcing to sustain productivity with a smaller U.S. workforce.

Inflation, Interest, and Housing
Inflation (as measured by the consumer price index) is projected to drop into the low 2% range, within the goals of Federal Reserve monetary policy.12 On December 13, the Fed announced its intention to keep the federal funds rate (a benchmark for short-term interest rates) at 0.25% or lower and affirmed its commitment to increasing the average maturity date of its securities — a strategy intended to lower long-term interest rates to stimulate business investment and keep mortgage rates low.13

Some experts question the effectiveness of this strategy because rates on mortgages and business loans are already low. The major drags on the housing market are the large inventory of homes in foreclosure, more rigid lending standards, and the continuing jobs crisis. At best, there may be a slight increase in average housing prices.14

Taxes and Domestic Spending
In late December, Congress passed a two-month extension of the payroll tax cut. Further debate on a year-long extension has the potential to affect consumer confidence and spending.

The scheduled expiration of key tax provisions at the end of 2012 — affecting federal income tax rates, the estate tax, and taxes on capital gains and dividends — could have some impact as the issue heats up later in the year. However, action may not occur until after the November election and could extend into 2013.

Spending cuts mandated by the Budget Control Act may cast a shadow over the economy in 2012 but are not scheduled to take effect until January 2013. Like the tax provisions, action may be delayed until next year.

As with 2011, wild cards might include a natural disaster or political unrest that could affect an already fragile global economy. It’s important to monitor unfolding events, but the soundest approach is generally to follow an investment strategy suited to your personal goals and situation.

Investments are subject to market volatility and loss of principal. Investing internationally carries additional risks such as differences in financial reporting, currency exchange risk, as well as economic and political risk unique to the specific country. This may result in greater share price volatility. Shares, when sold, may be worth more or less than their original cost.

1, 10, 12, 14) The Wall Street Journal’s Economic Forecasting Survey, December 2011
2) CNNMoney, December 16, 2011
3) U.S. Census Bureau, 2011
4, 6, 9) Kiplinger Economic Outlook, December 2011
5) U.S. Bureau of Economic Analysis, 2011
7–8) The New York Times, December 2, 2011
11) The Wall Street Journal, September 16, 2011
13) Federal Reserve, 2011

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to visit a Naperville Tax Advisor or obtain legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2012 Emerald Connect, Inc.

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ETFs for the Conservative Investor

Investment in exchange-traded funds (ETFs) has grown substantially since the first ETF was introduced in 1993. Total ETF assets exceeded $1 trillion in March 2011, up more than $200 million over the previous year.1

Until recently, conservative investors may have felt left out of the ETF marketplace because the available options were largely based on stocks. That is changing. There are now 140 bond-based ETFs with assets representing about 14% of the total ETF market.2 Bond ETFs generally track major fixed-income indexes that might focus on short-term, intermediate-term, or long-term bonds. They offer some appealing opportunities for the risk-averse.

Mutual Funds Meet Stocks

Like mutual funds, ETFs comprise a portfolio of securities assembled by an investment company. They typically track an index, market sector, or other group of securities and offer investors flexibility in structuring their portfolios to meet specific goals and risk tolerances, as well as a level of diversification that would be cost-prohibitive if the underlying securities were purchased separately. This is especially true of bonds, which typically carry face values of $1,000. Diversification does not guarantee against loss; it is a method used to help manage investment risk.

Unlike mutual funds, whose shares are generally bought from and sold back to the mutual fund and priced once a day at the close of business, shares of ETFs trade like stocks throughout the day. Supply and demand for the shares may cause them to trade at a premium or a discount relative to the value of the underlying shares.

The principal value of ETFs and mutual funds will fluctuate with changes in market conditions. Shares, when sold, may be worth more or less than their original cost. Bond ETFs are subject to the same inflation, interest-rate, and credit risks associated with their underlying bonds. As interest rates rise, bond prices typically fall, which can adversely affect the performance of a bond ETF.

The attraction of ETFs over mutual funds comes from their trading flexibility, generally lower expense ratios, and greater tax efficiency. Be mindful, however, that you must pay a brokerage commission to purchase ETF shares. Given the growing availability of ETFs, there may be several to choose from that could be appropriate for your risk profile.

Exchange-traded funds and mutual funds are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your Naperville Investment Advisor. Be sure to read the prospectus carefully before deciding whether to invest.

1–2) Investment Company Institute, 2011

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2011 Emerald Connect, Inc.

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What Kind of Investor Are You?

  Most Americans seem to understand that to pursue financial gains through investing, they typically must assume some level of risk. For example, one survey of investors with household incomes above $150,000 found that 98% were willing to assume at least some risk in pursuit of investment gains.

When you assume investment risk, it means you should be willing to lose money in pursuit of investment gains. Although losing money is exactly the opposite outcome you hope to achieve through investing, risk is an inherent aspect of investing. Broadly speaking, the more risk you are willing to assume, the greater your potential for investment returns.

Understanding your risk tolerance is an important part of determining what kind of investor you are. At one end of the risk spectrum is the conservative investor, who is usually interested in preserving principal and earning a steady income. At the other end is the aggressive investor, who is typically more concerned with growing principal, even if it means sustaining some investment losses along the way. Not sure where you fit? These factors may help you decide.

Comfort Level
Everyone has a different comfort level when it comes to the potential for losing money on an investment. Although feelings are important and should be taken into consideration, making major decisions based on emotion could cause you to miss opportunities or take on too much risk. Remember that even the most conservative investments can lose value over time if they don’t keep pace with inflation.

Time Horizon
Your proximity to your financial goals can have a significant influence on your risk tolerance. In general, the more time you have to reach your goal, the more risk you may be able to assume. An individual who is 15 to 20 years from a major goal, such as retirement or sending a child to college, is typically in a better position to recover from investment losses than someone who is five years from a major goal. As you approach the date when you will need the money in your portfolio, it may be a good idea to begin shifting assets to more conservative vehicles to help avoid losses from which you may not have time to recover.

Net Worth
The size of your portfolio could also affect your risk tolerance. Consider two hypothetical investors: One has a $5 million portfolio and the other has $100,000 in a retirement account. Each makes a $50,000 investment in the same security. The millionaire is assuming far less risk because $50,000 represents only 1% of his portfolio. The other investor is facing a much larger risk by exposing half of his portfolio to the fate of a single security.

All investments are subject to market fluctuations, risk, and loss of principal. When sold, investments may be worth more or less than their original cost.

Determining how much risk may be appropriate for your portfolio typically requires you to consider more than just your feelings. Examining your overall situation may help you determine how much risk you want to assume to meet your long-term financial goals.




Allow us to help you meet your financial goals, we are your neighborhood Naperville Investment Advisor.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2011 Emerald Connect, Inc.

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Protect Your Business with a Disaster Readiness Plan

Prepare for Disruptions — Even from Faraway Events

About a year ago, a volcano erupting in Iceland virtually shut down air travel in Europe. Thousands of flights were canceled, stranding travelers and grounding the 11,000 tons of goods that are normally flown daily between Asia and Europe.1 Businesses suddenly faced shortages of goods and materials because of a faraway natural disaster — a reminder of the need to prepare for a range of emergencies.

Your company may have been unaffected by the Icelandic volcano, but the risk of disaster is always looming. Most people think of hurricanes, tornados, and earthquakes, but a fire in the break room or a flood in the warehouse can also cause operations to come to a grinding halt. By one estimate, one-quarter of businesses never reopen after a major calamity.2 Taking some basic steps now could help you avoid a similar fate.

Stay covered. Even though you probably have insurance, it’s important that your coverage keeps pace with company changes. Updating your policy as you add equipment and other capital expenditures may help you reduce uninsured losses.

Image via Wikipedia

Point and shoot. Taking photographs of premises and property may help speed up the claims process and reduce the risk of disputes with the insurer. Backing up the photos online can help protect them from loss, as well.

Back up and protect. In this electronic age, it’s likely that you already have arrangements to back up important files off-site, preferably 50 or more miles away, with the ability to view them online. But what about records that you keep on-site containing sensitive customer and employee information? Take steps to prevent looters from gaining access to these records in the event you must evacuate.

Keep in touch. Even if your company never suffers a disaster, it may still be vulnerable to disruptions in the supply chain. Arranging for back-up suppliers, deliveries, and other important services may help prevent someone else’s bad fortune from becoming your own. It’s also a good idea to prepare a list with contact information for your employees, Naperville accounting advisor,vendors, Naperville Investment advisor and others with whom you do business. Make sure your managers have copies of the list and keep them at home.

1–2) The Wall Street Journal, April 16, 2010; September 11, 2009

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2011 Emerald Connect, Inc.

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Finding Your Balance

As an investor, you hardly need to be reminded about market volatility, having lived it for the past several years. Even though the S&P 500 had an 8.2% average annual return from 1990 to 2009, the index has still seen some remarkable gains and losses.
One way to help manage volatility is through asset allocation. But this process of determining the appropriate proportion of assets based on your financial goals, risk tolerance, and time horizon is not a set-it-and-forget-it strategy. Once you have implemented your preferred asset allocation, it’s time to stick to your strategy.

Over time, the performance of the different investments in your portfolio will invariably cause your allocation to change. Taking time to periodically rebalance — that is, to buy or sell investments to bring your asset mix in line with your target allocation — may help you be in a better position to pursue your long-term goals.

Rebalancing can help you stick to your investment strategy. It may also help you avoid the pitfalls of market timing, chasing performance, and overexposing your portfolio to one asset class.

In the process of rebalancing your portfolio, you may incur commission costs as well as taxes if you sell investments for a profit. Therefore, it may not be a good idea to rebalance too frequently. Generally, once a year should suffice. However, you may also want to rebalance whenever the percentage of an asset class rises above a certain threshold, say 5% to 10% over your preferred asset allocation, or if your risk tolerance changes.

Asset allocation does not guarantee against investment loss. It is a method used to help manage investment risk.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2010 Emerald.

More info? Contact a preferred Naperville Investment Advisor, Platinum Financial at 630-548-9600

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Choosing The Best Naperville Investment Advisor

Looking for an investment adviser is one of the smartest things you can do to secure your financial future, and choosing a good Naperville investment adviser will help get you on the right track. The job of an investment adviser is to ensure your investments are not only profitable and safe, but that your investment strategy meets your long term financial needs.  Investment advisers can help you select a variety of financial products such as mutual funds, stock or bonds to get you where you need to be.

Naperville wealth management is a good idea for people looking to secure their financial future. When choosing an advisor, it is important to ask aout their qualifications and experience in the wealth management field. The main goal of a wealth manager is to select investments that meet his or her clients needs while maintaining appropriate risk levels.

Naperville wealth management can help you assess risks and rewards while moving you closer to your financial goals. With todays current economic climate, wealth management is a critical part of retirement planning and should be done with the aid of a qualified financial planner or CPA. Before you enter into any agreement, make sure your CPA or financial planner is certified and licensed.

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Why do you need a Naperville Investment Advisor?

People in Naperville are known to spend tons of money. In this day and age, with the threats of recession and global crisis, spending your money wisely is very important. Finding the right things to invest on is not always simple. You've worked hard for your earnings, you need to consult with a Naperville Investment Advisor.

Having your own financial investment advisor can be very rewarding. An advisor specializes in finance and investment, you are sure that it not only helps regulate your financial spending but manage your money as well. Together, you and your advisor can work hand in hand in order to reach your financial goals, giving you fiscal stability along the way. Having an advisor will definitely work to your best interest, making sure that your wealth is securely managed.

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Your Naperville Investment Advisor will help you make the right choices on where to invest your money. They should offer scenarios for long and short term investments whether it be real estate, business ventures or Wall Street. Additionally, they should also advise you regarding possible consequences and will even prevent you from encountering financial fraud. Together, lets make certain that every penny that comes out of your pocket is well spent.

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How Can An Investment Advisor Improve Your Current Strategy?

A proper investment strategy is the cornerstone of any financial plan. When people think about making investments, they automatically think of the stock market. The stock market is a great place to invest your resources, but it is not the only one. In fact, in certain circumstances, investing in the stock market may not be the strategy that is best for you. A Naperville investment advisor can paint you a picture of your current financial situation, what the future looks like if you continue with your current strategy, and how all of that could change by developing a comprehensive investment plan.
The first thing that an investment advisor will do is talk to you about your current investment strategies. Once they know the details, they will be able to analyze your plan and help you see the benefits of your current plan, and the places where it could use some improvement. They will educate you on the various types of investment opportunities available to you, as well as the risks involved with each.

When your investment advisor has gone over your current plan in detail with you, they will often times suggest different strategies based on your goals. Before you meet with a financial advisor it is a good idea to have a set of goals in mind. You and your planner will then work together to develop a solid investment strategy that, over time, will help you yield the results you need to reach your goals.

Investing is never an exact science, but it can be much more predictable when you enlist the help of a professional. Structuring an investment strategy that gives you the potential for large gains, and at the same time minimizes your financial risk, is a delicate task requiring expertise and precision. A Naperville investment advisor can offer you the experience and expertise needed to develop a comprehensive investment strategy. Put one to work today, and take some of the guesswork out of your investing.

What’s in your Investment Portfolio?

     A Naperville investment advisor can help you plan to build on your portfolio.  Are you familiar with what an investment advisor does?  Not everyone is qualified to be one.  There are many intelligent individuals that are knowledgeable about the stock market however, are not very successful with their investing.  Most of these individuals have not made it their career of investing.  Some of the best can be a bit “off” in the timing of their investments and seem to buy stocks and investments when they are hot and not cold.  For the greatest financial benefit you should buy cold and rake in the money when it goes hot.

The media is a culprit in this area as well.  They indicate to the community to buy when it’s hot and that in order to ride the gravy train, to buy now, now, now!  This can cause someone to lose considerably. 
The best way possible to end up with more money than you came in with is to use a professional money advisor to assist them in their investing.  You also need to choose a professional that is skilled and dedicated to only investing in stocks, bonds, and mutual funds.

Now, you do not need a million dollars to begin your journey to financial success.  You only need a small amount to get started and your advisor can suggest certain investments to get started.  Thousands of investment advisors are in the United States alone and they do all of the legwork for your success.  Let your local Naperville investment advisor build your successful financial future!