Anything that relates to the capital markets will be discussed here.
Wednesday, July 06, 2005
5 quick steps in preserving your net worth
Raise cash in your 401K. You should start trimming any funds that are investing in reits and growth stocks.
If you want to keep some stock in your portfolio, invest only 50% of your cash at this cycle. Personally I would go as low as 20% only and I'd be very selective in what I own. I'd consider only deep value funds and would inspect closely what the fund own in its perspectus.
If you are over 55, you shouldn't invest more than 50% of your cash in stock at any time. Keep some cash handy as there will be more opportunity to invest in higher yielding instrument.
Start paying off your debt, starting with credit cards, car loans and then mortgage.
Raise your emergency funds from 3 months to 6 months at the minimum.