Investment Planning by the Decade

Whether the market rises or falls, you need to stay the course and invest throughout your lifetime

30 Somethings
While still in the early stages of their careers, those in their 30s are no longer the freshmen of their workplace. With greater incomes and responsibilities than their younger counterparts, those in this age category should:

  • Continue to build upon the financial foundation set in their prior decade
  • Increase their contribution rates to their 401(k)s
  • Consider opening an IRA or other investment vehicle
  • Look to become a homeowner at this point
  • Open college savings plans, if they intend to start a family

Since many begin to get hitched and start families during this period, Danny Freeman, principal of Darda Financial Services L.L.C. (www.dardawealth.com) in Winston-Salem, North Carolina, says young professionals need to be even more focused on investing for their long-term future. A former banker, Freeman counsels thirty-somethings to be aggressive with up to 20% of their portfolio. He suggests they invest in ETFs because they have no minimums.

He particularly likes WisdomTree LargeCap Dividend Fund, an exchange-traded, diversified fund with large holdings in tech, energy, and pharmaceuticals. Nine shares cost less than $500. The one-year return is 9.75%, and the distribution yield is 3.01%. Shares purchased like stock have no minimum, and discount brokers offer the lowest commission fees. He also suggests Blackstone Group L.P. (BX), a private equity firm. He says Blackstone invests in 750 companies, has no minimum as it is traded on the New York Stock Exchange, and is liquid. “I began buying it last fall at $12.50 and it is now $16. It has the potential to grow—its metrics remind me of Apple about 12 years ago,” Freeman says.

Freeman’s long-term investment pick is Hillenbrand Inc. (HI), the parent company of Batesville Casket Co. He likes Hillenbrand’s cash flow, dividends, and sound management, and that it has diversified into medical technology and heavy equipment. “My goal as an adviser is to produce returns that beat the index and are near the stock market returns, at lower risk and expense.”

Continued on next page

Pages: 1 2 3 4 5 6 7
ACROSS THE WEB