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.

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