www.orlandosentinel.com/features/consumer/sfl-stock-pul -
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Published on: 9/3/2009
Last Visited: 9/3/2009
"Don't invest everything now," said Mark Salzinger, editor of the No-Load Fund Investor newsletter.
Those coming into stocks should invest a little at a time, but those already invested shouldn't flee, Salzinger said, as long as they have diversified portfolios.
Those who have enjoyed tremendous surges in risky mutual funds that specialize in high-yield bonds, emerging markets and China could reduce exposure a bit, he said.
But despite some excessive enthusiasm over investments in China and Latin America, Salzinger is reluctant to pull away completely because investors could miss the sharp rallies that often come without warning, he said.
On days when stocks are falling, he will add to holdings.
Meanwhile, for investors nervous about the stock market rally fizzling, a conservative way to manage exposure would be through a mutual fund that invests in large companies that pay dividends.
Salzinger recommends the Vanguard Dividend Growth fund.
"It's like ballast," he said, because it invests in companies with strong cash flow, and dividends provide some insulation from falling stock prices.
For retirees, he suggests 10 percent of their portfolio go there, and for 40-year-olds, about 5 percent.
Overall, he suggests 40-year-olds keep 70 percent of their portfolio in a blend of stock funds.
For investors who pulled away completely from the stock market, times are too unsettled to jump in completely, he said.
A sensible approach would be to invest monthly in a fund that has the discretion to hunt for deals across the stock market.
By selecting respected fund managers with latitude to move into small and large companies, the investor doesn't have to figure out where value is in the market.
Salzinger suggests Artisan Opportunity Growth fund.
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For investors nervous about speculative emerging markets, Salzinger suggests the Matthews Asia Pacific Equity.