For example, while the last 12 months was a weak period for stocks, bonds and cash (money market funds) did very well. So a portfolio that was comprised of 50 percent stocks, 45 percent bonds and 5 percent cash would have held up very well during the recent stock market correction.
If the stock portion of our hypothetical portfolio was invested in a well-diversified mutual fund or in several funds, it likely would held up even better than the investments of someone positioned heavily in technology and telecom stocks with the stock portion of his portfolio.
The most efficient way for Sharon to start her portfolio is to use mutual funds. They will save her time and money, and help mitigate some of the unsystematic risk in her portfolio.
Here are some mutual funds worth consideration.
U.S. Equity Funds
TIAA-CREF Growth & Income Fund
Excelsior Value & Restructuring Fund
Artisan Mid-Cap Fund
Thornburg Value Fund
UMB Scout WorldWide Fund
Artisan International Fund
Tweedy Browne Global Value
Strong Short-Term Bond Fund
Harbor Bond Fund
Guest columnist Ronald W. Rogé, MS, CFP, is president of the fee-only Wealth Management firm R. W. Rogé & Co. in Bohemia, N.Y. Worth Magazine named him one of America's Best Financial Advisors and Medical Economics says he is one of the Best Financial Advisors for doctors. On the Web: http://www.rwroge.com.