Fix Your Finances Now

After three of the worst years for investors, we offer guidance from top financial advisors

When picking mutual funds, tax efficiency and the tenure of the fund manager are very important to keeping costs as low as possible. Look at the type of stocks a manager has picked, and decide if you are comfortable with them.

SMITH: Look at the size of the funds. The smaller the fund, the higher the expenses you are probably going to incur. The larger the fund, the overall expense ratio may be lower. And if you are investing for growth and choose a growth fund, understand that the fund will follow a growth philosophy.

WILLIAMS: Investors should have an investment policy statement that says they will only deal with funds that have three-, five-, or ten-year returns, which will keep them from jumping into a new fund with a 100% return in one year and then tomorrow it’s gone.

B.E.: What do you tell investors, when talking about the war, to earn their trust so they will keep investing?

CLARK: If we go to war, the fact is that it has already been discounted into the market, and the anxiety investors have will be relieved. If we don’t go to war, I think that’s going to be an overwhelming relief factor that will cause the markets to do better because it has been discounted so much into the picture.

Just as the Persian Gulf War helped corporate America retrench and cut layers of fat by laying off workers, cost-cutting, and refinancing the tremendous amount of debt, this war is going to help firms better their bottom line. I think what is going to happen with the war for the long-term will have a positive effect.

CREUZOT: I try to get our clients not to focus on the short-term issues. Despite the wars and the turmoil this country has been through, there has been a steady incline in the market. I think you have to keep people focused on the long-term.

WILLIAMS:

I think the war has to be very quick. If it’s a short war and we get it over with, I think the economy will benefit, and it will be positive for the stock market. If it’s long and drags on, however, I think it will have somewhat of a devastating effect.

B.E.: One of the biggest trends over the last 20 years is the individual taking more responsibility for what happens to his or her retirement money. Our readers have to be more responsible with their finances. Lay down some rules so they can get their houses in order.

SMITH: I have a lot of clients who have gotten laid off. When my clients come to me, and they think that a pink slip is coming down the road, I tell them to go get a line of credit because no one will lend you money without a job.

CREUZOT: The first thing we have clients do is organize themselves. We do that by gathering data to help us solidify what their assets and liabilities look like, and then we have them do a budget to see

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