Economists Warn Another Financial Crisis Is On the Way

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3/6/2010

Against the backdrop of consumer outrage over huge losses in target date portfolios, a handful of big fund companies are revamping their target date offerings in hopes of limiting risk — and preventing another major blowup.

AllianceBernstein LP, Van Kampen Funds Inc., Invesco Ltd. and Putnam Investments have all announced changes to their target date portfolios that will enable managers to provide more active management.

Despite being months behind, many strapped residents are hanging on to their homes. Pressure on banks to modify loans and a glut of inventory are driving the trend. Throughout the country, people continue to default on their home loans -- but lenders have backed off on forced evictions, allowing many to remain in their homes, essentially rent-free.

Americans, as well as citizens of many other advanced nations, now spend about twice as many years in retirement as they did a generation or two ago. Aggressive saving and adherence to a well-thought-out investment plan are more important today than they have ever been. It is a big mistake for today’s 65-year olds to no longer consider themselves to be “long-term investors.”

For all the benefits exchange traded funds (ETFs) offer, it’s little shock that they’re trouncing mutual funds in nearly every regard. If you’re an investor hanging onto a mutual fund that just isn’t cutting it, take the opportunity to find a similar ETF that might be a better fit.

 

 

 
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