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Published on: 5/25/2007
Last Visited: 5/28/2007
Research economist Anthony Webb saw a lot to like about Nelson's situation.
"She doesn't have any student loans, has avoided taking on credit-card debt, has health insurance and is managing to live within her means, even though she doesn't have a full-time job," he said.
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Webb and Stevens both thought that the $3,000 in Nelson's checking account is not enough to serve as an emergency fund.
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Webb noted that investment allocation is about trying to get the best possible trade-off between risk and return.
"One way of doing this is by diversification, and I am concerned that she has put a lot of her eggs in a China basket," he said.
International exposure is fine, but she might be better off with a broad-based international fund, he said.
And he had one final word of advice based on her concerns about aircraft emissions.She might want to think about funds that invest with environmental considerations in mind.Webb said there is no evidence that "ethical" funds do worse than regular funds.
"This is one situation where doing the right thing won't cost her anything," he said.
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