I answer questions about mutual funds, and other investment topics, at www.AllExperts.com, something I’ve been doing for years. Sometimes people send me trick questions—dealing with abstruse math, for example—which I blithely ignore. Sometimes people send me their entire Brobdignagian portfolio, and ask me to comment. I suggest they hire a Certified Financial Planner.
But most of the time the questions are reasonable. But, not infrequently, my answer is simply: Consult Morningstar Mutual Funds. (The not-infrequent question: Should I sell XYZ Fund?)
I get a kick out of answering some questions. The other day, for example, someone wrote that much of his 401(k) money was in Dodge & Cox Stock, and it had declined 8% on a single day, and he was suffering horribly. I wrote back within the hour: There had been a distribution of capital gains; the fund had declined only modestly. My good deed for the day. Or maybe for the entire year 2007.
Here are some other questions and answers:
Q. What are your thoughts about the famous “Rich Dad, Poor Dad” author Robert T. Kiyosaki saying that mutual funds are for "losers"? You can check http://en.wikipedia.org/wiki/Robert_Kiyosaki. Its quoted about 3/4 down the page.
A. Kiyosaki ia not only a fool, but a dangerous fool.
Wikipedia does a good job of exposing him, but to suggest that the estimable John Bogle agrees with his views is absurd.
Keep investing in (good) mutual funds and keep investing in your 401(k) plan.
Q. My wife and I are in our mid 40's and maxing out Roth IRA's in a
T. Rowe Price 2035 target fund and a global stock fund. Are these good overall funds for our purposes with regard to costs, etc.? (Retirement in 20-25 years.)
A. I think the T. Rowe target funds are on the aggressive side--I once researched the Depression years, and what happened to the stock market then still scares the heck out of me (stocks fell 80%). So I would keep a bundle in cash, and perhaps put some money into a more conservative target fund, like Vanguard's.
Which global stock fund do you own? Doesn't the T. Rowe fund have an adequate exposure to foreign stocks?
You seem to be doing the sensible thing in general--with a target fund and Roth IRAs--providing you also have adequate insurance, health, especially.
One more thing: Can your wife handle all the family finances if you get disabled? If not, you might investigate having her consult a good financial planner--or start teaching her what you know!
Q . What do you think about MCHFX? I put most of my IRA into it.
A. Most of your IRA? Is it a big IRA? How much of your total assets does that mean?
I wouldn't put the bulk of my assets in a China fund. As it is, authorities recommend that you keep 30-40% of your assets, at most, in foreign funds. I myself own FXI, a China fund, and it's a very small part of my total portfolio. (It has done sensationally.)
Chinese stocks are volatile. Matthews China lost 7.52% in 2002, 6.69% in 2000. You can expect more pullbacks. Are you sophisticated enough to withstand them?
No question, this Matthews fund is a class act. Morningstar likes it a lot:" ...this fund is a superior option for hard-core China fans." Four stars. No-load. But it notes that China funds' gains in recent years are "unsustainable."
So...limit your exposure. And maybe now is a good time to take some chips off the table.
But most of the time the questions are reasonable. But, not infrequently, my answer is simply: Consult Morningstar Mutual Funds. (The not-infrequent question: Should I sell XYZ Fund?)
I get a kick out of answering some questions. The other day, for example, someone wrote that much of his 401(k) money was in Dodge & Cox Stock, and it had declined 8% on a single day, and he was suffering horribly. I wrote back within the hour: There had been a distribution of capital gains; the fund had declined only modestly. My good deed for the day. Or maybe for the entire year 2007.
Here are some other questions and answers:
Q. What are your thoughts about the famous “Rich Dad, Poor Dad” author Robert T. Kiyosaki saying that mutual funds are for "losers"? You can check http://en.wikipedia.org/wiki/Robert_Kiyosaki. Its quoted about 3/4 down the page.
A. Kiyosaki ia not only a fool, but a dangerous fool.
Wikipedia does a good job of exposing him, but to suggest that the estimable John Bogle agrees with his views is absurd.
Keep investing in (good) mutual funds and keep investing in your 401(k) plan.
Q. My wife and I are in our mid 40's and maxing out Roth IRA's in a
T. Rowe Price 2035 target fund and a global stock fund. Are these good overall funds for our purposes with regard to costs, etc.? (Retirement in 20-25 years.)
A. I think the T. Rowe target funds are on the aggressive side--I once researched the Depression years, and what happened to the stock market then still scares the heck out of me (stocks fell 80%). So I would keep a bundle in cash, and perhaps put some money into a more conservative target fund, like Vanguard's.
Which global stock fund do you own? Doesn't the T. Rowe fund have an adequate exposure to foreign stocks?
You seem to be doing the sensible thing in general--with a target fund and Roth IRAs--providing you also have adequate insurance, health, especially.
One more thing: Can your wife handle all the family finances if you get disabled? If not, you might investigate having her consult a good financial planner--or start teaching her what you know!
Q . What do you think about MCHFX? I put most of my IRA into it.
A. Most of your IRA? Is it a big IRA? How much of your total assets does that mean?
I wouldn't put the bulk of my assets in a China fund. As it is, authorities recommend that you keep 30-40% of your assets, at most, in foreign funds. I myself own FXI, a China fund, and it's a very small part of my total portfolio. (It has done sensationally.)
Chinese stocks are volatile. Matthews China lost 7.52% in 2002, 6.69% in 2000. You can expect more pullbacks. Are you sophisticated enough to withstand them?
No question, this Matthews fund is a class act. Morningstar likes it a lot:" ...this fund is a superior option for hard-core China fans." Four stars. No-load. But it notes that China funds' gains in recent years are "unsustainable."
So...limit your exposure. And maybe now is a good time to take some chips off the table.
