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SMART MONEY STRATEGIES FOR EVERY AGE AND SITUATION
Your 40s and 50’s—The Peak Earning Years

Section 2 of 11:
INVESTING:
What Should You Be Doing to Increase Your Wealth?
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If you’ve never invested in stocks or have only limited experience
with them, you might be harboring a common misperception of the
stock market: It’s a dangerous, volatile place where thousands of
sophisticated professional traders and brokers lurk to steal your
hard-earned money.

The reality is there are millions of small investors like you who have
been able to finance their dreams by successfully buying and
holding for years shares of profitable companies and of mutual
funds that buy such shares.

This report will help you learn how to micro-manage your funds so
that your money multiplies itself. Each section contains useful tips,
techniques and action strategies you can implement right away.

Read on and reap the financial rewards!

Jordan E. Goodman
America’s Money Answers Man
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INVESTING:
What Should You Be Doing to Increase Your Wealth?

If you have already established a substantial portfolio of stocks and equity
mutual funds, you might begin to scale back the risk level of your holdings as
you move through your 40s and 50s. If 70 percent of your portfolio consisted of
aggressive growth or growth stocks when you were in your 20s and 30s, 30 to 50
percent is more appropriate now. You can allocate the rest of your capital to
more conservative growth and income investments, such as equity-income,
balanced, and convertible mutual funds.

Also, increase your bond holdings to about 50 to 70 percent of your portfolio over time, and reinvest the dividends if you don’t need the income the bonds generate. If you are in the top tax bracket, consider investing your money in municipal bonds rather than taxable
Treasuries or corporates. If you have excess risk capital that you can afford to lose, you might dabble in more speculative arenas, such as options, futures, gold, collectibles, and limited partnerships, but move cautiously.

If you have not saved or invested over the years, do so immediately. Aim to set
aside at least 10 percent of your after-tax income—as much as 15 percent, if
possible. If your employer offers a salary reduction plan and you have not yet
enrolled, do so to the maximum extent possible, particularly if the company
matches your contribution. By not saving over the past 20 or more years, you
have forgone a tremendous opportunity for which you must now compensate.

Your goal is to create a large enough pool of capital to generate the income you
need to live well in retirement, which is now only 10 to 25 years away. If you
can amass $100,000,that will create an income stream of $5,000 a year if you
earn a 5 percent return and $10,000 a year if you manage 10 percent.

Your banking relationships should be well established by now, and you should be
maintaining checking, savings, and certificate of deposit (CD) balances high
enough to avoid account fees and per-check charges. If you keep money in
several banks, consolidate it in one institution to minimize fees. Make sure
that your account is insured by the Federal Deposit Insurance Corporation
(FDIC).

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Everyone’s Money Book on Stocks, Bonds and Mutual Funds
by Jordan E. Goodman

Understanding the vehicles for investment and changing markets can give you the edge when choosing smart strategies in changing times. Everyone’s Money Book on Stocks, Bonds and Mutual Funds will help you make sound decisions regardless of market movement…..

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