A personal finance and investing blog
In reponse to protect your base, here are some guaranteed investments. They are savings accounts that are high-yielding and liquid.
EmigrantDirect 4.25%
GMAC 4.60%
Virtual Bank eMoney Market 4.60%
IngDirect 4.75%
HSBC Bank 4.80%
Surprisingly, EmigrantDirect is the lowest of the bunch. HSBS has become really competitive these days.
I asked my boss, an investment banker for ten years, a simple question. “What is the fastest way to get rich?” He answered “Pay yourself first.” It’s a historical and proven method that is written in many books and websites. Paying yourself first means setting aside a portion of your paycheck and save it up.
He also said, “Protect your base.” Protect the principal investment. You want to protect yourself from losing the principal; losing your principal makes it more difficult to catch up. So, you must guard your base. After you generate enough interest from your principal you could use that extra money to take more risk. If you lose the principal, you would not be able to take much risk. Therefore, protecting your base is crucial. Once you have guarded your base you’ll be on your way to getting rich.
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I usually file my own taxes because it’s pretty simple. I just take my W-2 and 1099-INTs and entered them in tax software and submit my 1040 electronically. However, in 2005, I purchased an investment property and I believe it’s better to have a professional handle my tax return this year. I’ve been asking around for a referral to a good tax account that can not just help me file but one that can also answer questions and help me plan out taxes for the year.
I got a referral from one of my friends who told me about his accountant. His accountant seems to handle his tax return very well so I contacted his accountant. I got a quote for $250. I thought it was a little high even for my kind of tax return. It may be an investment property but it’s relatively easy. But my friend said he’s worth the price, so I’m planning to go with his accountant.
How much do you pay to file your taxes? If any of you have an accountant that you want to refer in the NYC area, please let me know soon.
I have only three funds in the account: a S&P500 Index fund, an Utilities fund, and an Emerging Markets fund. My returns for year to date is 8.6%, and for the past twelve months is 27%. Those numbers are pretty impressive.
Zooming in to the one-month performance, the emerging markets and utilities fund returns is negative. Both of the funds has had a stellar 12-month run. The utilities fund had a 18% return and the emerging market fund had a whopping 41% return. I’m afraid this year, both of the funds may slow down or even turn around. To protect my profits, I’m going to reallocate my portfolio.
After going through a list of funds and their fund facts I’ve found two new funds I like. They are the Fidelity Advisor High Income Advantage and the T. Rowe Price Growth Stock Fund.
I like the story of the T. Rowe Price Growth Stock Fund and I’m going to move all of my S&P 500 Index fund money to it. The Growth fund long term track record is better than the S&P 500′s. Also, I’m betting that the large cap growth companies are going to do well in the near future. The Fidelity Advisor High Income Advantage is a very nice bonds fund and should be a good protection against down markets.
This how my 401k portfolio will look:
Current Allocation
Emerging Markets 53%
Utilities 38%
S&P 500 9%
New Allocation
Emerging Markets 35%
Utilities 35%
Growth 21%
High Yield Bonds 9%
The market is doing well today. It looks like spending is back up according to Yahoo News, Consumer Spending Gives Economy a Lift.
Cisco (CSCO) is having a great day. It’s at $21 as I’m writing this. It has paid well for those shareholders who have been patient. Sometimes it takes time for a company to be discovered by big institutions or time to recover from a crisis.
Apparently, Seagate (STX) is also having a great day. It’s up 70 cents to $27.27. Seagate is getting much more notice now and they should. They are the top hard drive manufacturer and have great storage technology. Their new perpendicular drive technology is being covered in PC magazines and will receive more attention. The stock price is highly underpriced at a P/E of 12.8. There should be plenty of room for stock growth.
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