Looking for ways to boost your wealth? These 3 tips will ensure that you continue to grow that nest egg. Get the suggestions here!
CNN Money?suggests?
(Money magazine) ? Making real money today is a challenge, whether you?re just starting out or already have a strong financial foundation.
This is part of a special report on?101+ ways to build wealth. In this story, readers and experts weigh in with advice for significantly improving the return on your investments.
Shop for discounts.?Value investing (buying beaten-down stocks that are poised to rebound) tends to outperform growth investing (buying firms with rapidly increasing earnings).
From 1928 to 2011, U.S. large value stocks delivered 10.8% average annual returns, vs. 8.7% for their growth counterparts. This strategy requires guts and patience.
?You?re taking the other side of trades made when people can?t wait to get out,? says Wally Weitz, manager of Weitz Partners Value (WPVLX).
And there are long stretches where the category lags, like the past 10 years. Feeling brave? See threestocks Weitz likes.
Buffer against losses.?Covered calls can boost long-term returns up to 20%, University of Utah finance professor Robert Dubil found. You sell an investor the right to buy a stock or an ETF you own should the shares rise above a set price within a set time. The cash you pocket cushions losses if the stock falls. But if it never hits the strike price, you keep the money and the shares.
Be a cheapskate.?The surest way to improve returns? Minimize investing expenses.
Index funds and ETFs are a good way to go: Vanguard Total Stock Market (VTSMX) charges just 0.17% vs. 1.4% for the typical actively managed stock fund.
Growth of $100,000 after 20 years, with 7% annual returns:
- Fund with 1.4% expense ratio: $297,000
- Fund with 0.17% expense ratio: $375,000
Get more information at?CNN Money!
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