company’s 401(k) plan. He suggests Helenese use $1,000 of the $2,000 that she received from be for winning the Financial Fitness Contest to begin her retirement savings. The investment will reduce
her taxable 1999 income of $11,000. What should she invest in? Since Helenese is starting her career, Davis says, she can afford to be aggressive and divide her investment in the following manner: 50% in technology-heavy mutual funds and another 50% in large-cap funds.
Construct a growth portfolio with mutual funds. Davis says Helenese should use her remaining winnings to start an investment portfolio geared toward growth. Before investing directly in stocks with a broker, he suggests that she buy mutual funds and then engage in the practice of dollar-cost averaging-setting aside $100 a month to invest in a mix of technology and large-cap mutual funds. Says Davis of the plan: “She should start investing now because even though Sondra may be investing small amounts of money, time is on her side.”
Sondra Helenese
ASSETS
Savings: $1,000
TOTAL $1,000
LIABILITIES
Student loans: $35,000 Credit cards: 1,100
Other loans: 460
TOTAL $36,560
NET WORTH -$35,560
