Money & Investing - Banks.com

It’s never too early to start preparing for retirement. And even if you think it’s a bit late, you should still do what you can. (There are “catch up” contribution options for IRAs and 401ks that allow you to make extra contributions on top of what is normally the limit.) Depending on your needs, Stock Trading To Go has 10 suggestions for individual equities that might make a good addition to your investment portfolio:

1. GROWTH AND INCOME: Abbott Labs (ABT), Dividend Yield: 3.6%
2. GROWTH AND INCOME: McDonald’s (MCD), Dividend Yield: 3.5%
3. BARGAIN GROWTH: Accenture (ACN), Earnings Growth: 12%
4. BARGAIN GROWTH: Cisco Systems (CSCO), Earnings Growth: 11%
5. DEEP VALUE: Baker Hughes (BHI), Dividend yield: 0.6%
6. DEEP VALUE: Valmont (WMI), Dividend yield: 0.7%
7. SMALL CAP: NutriSystem (NTRI), Return on Assets: 29%
8. SMALL CAP: Aaon (AAON), Return on Assets: 20%
9. FOREIGN VALUE: Petrobras (PBR), Dividend yield: 0.6%
10. FOREIGN VALUE: Unilever (UL), Dividend yield: 3.9%

It’s nice to have dividend stocks in your retirement portfolio, and many of these stocks offer those returns. I would be wary of the stocks with high returns, though. These stocks are often volatile, and high earnings can suddenly turn into something less than that desirable over the long haul.

Index funds for your retirement portfolio

Instead of trying to pick individual stocks, I like the idea of index funds. Solid stock choices may yield higher returns, but in the long haul, index funds often yield more than adequate results — even if they aren’t as flashy. Index funds follow a particular index (stock, bond, commodity, etc.). Since you gain on the performance of the index overall, you are almost certain to enjoy a return on your investment. With individual stocks, that outcome is far less certain.

In the end, though, you need to do what is best for your particular situation. However, no matter your situation, preparing a retirement investment portfolio is vital for your future financial security.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.

The Federal Reserve just released a report outlining the state of household wealth in the U.S. The report looks at the changes in net worth of American households in the first quarter of 2009. The Fed releases these reports quarterly. Not surprisingly, a drop has been seen in household wealth for Quarter 1. This represents the 7th straight quarter that a drop in household wealth has been seen. Leading the drop in household net worth are investments, reports MarketWatch:

Households saw their assets drop by $1.4 trillion in the first quarter, including a loss of $448 billion on their real estate and $1 trillion on their holdings of corporate equities, mutual funds and pension reserves.

With real estate values falling, it is no surprise that this represents a hit to net worth; most Americans have a great deal of their net worth tied up in their homes. Additionally, the loss of $1 trillion in other investments is telling. Pensions and retirement accounts probably account for a large percentage of these investment portfolio losses.

Even though it might be tempting to pull out of your retirement accounts in light of these losses, that would be unwise. Over time, the stock market trends higher. Even though it is struggling right now, you are likely to see gains over a 20 year period. A long time frame should be considered. Now could be a good time to buy, since stocks are on sale, and you can get more for your money. When the market recovers, chance are that you will be in good shape.

This should also be a reminder that real estate can lose value as well as other investments. Additionally, it will recover at a slower pace and its annual returns are likely to be lower than those of stocks. This offers a reminder that diversity is needed in your investments.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.

If you want to learn a little bit (and I mean a little bit) about investing, it might not be a bad idea to watch UN-BROKE: What You Need to Know About Money on ABC tonight. It’s a special, airing at 9 pm Eastern. Here is what the description of Un-Broke on ABC says about the special:

Hobson said: “Financial education is critically important, and UN-BROKE proves that it doesn’t have to be boring. The economic crisis was a harsh wake-up call that we can’t keep doing the same thing in the same way. To me, that meant taking a fresh look at my own approach to financial education. This will make people laugh while they learn.”

Celebrities are expected to make appearances so that they can teach us about money basics, from getting a home mortgage, to the basics of the stock market. The E*Trade Babies and The Jonas Brothers are primarily responsible for teaching the basics of stock market. I expect that information on retirement investment accounts will be included. And, hopefully, a little bit of perspective on the currency economic downcycle. But probably not. I have a feeling the main presentation is going to be all about money basics.

And, really, it’s pretty obvious that we do need some exposure to the money basics. The current state of affairs is due, in part, to a gross disregard for the fundamentals of money, investing and how it all works — from the boardroom execs and the Wall Street “experts” to the consumers with lack of financial literacy (or disregard for it).

Overall, I expect this to be a reasonably positive TV special event. And, if enough people watch it, perhaps it can generate more interest in sound money decisions and a future that is built on unsustainable growth and craaaaazy investments.