| Asset allocation can help protect your portfolio
Over time, the value of stocks can go up and down. Bond prices fluctuate with interest rates, as do other types of fixed-income securities such as certificates of deposit and investments in money-market accounts. Predicting which investment vehicles are likely to perform better than others at any given point time is next to impossible. So how do you choose investments for your portfolio? The answer is to follow a risk-reduction strategy called asset allocation. By dividing your dollars among a variety of investments, you can decrease the likelihood that all the investments in your portfolio decline at the same time. Of course, by the same token, it's also unlikely that every investment in your portfolio would go up at the same time. Essentially, asset allocation diversifies your portfolio among several distinct asset classes.
Romanian Central Bank Lifts Key Interest Rate
(RTTNews) - The National Bank of Romania raised its policy rate to 9.5% per annum from 9% on Wednesday. In its meeting, the Board of the central bank decided to continue to pursue a firm management of money market liquidity via open-market operations. It also decided to leave the existing minimum reserve requirement ratios unchanged on both leu- and foreign currency-denominated liabilities of credit institutions. The central bank said in a report that it would closely monitor developments in macroeconomic indicators and would assess their outlook. The bank also said that it stands ready to adjust its instrument settings to counteract inflationary pressures in order to re-enter the announced medium-term disinflation trajectory in a sustainable manner at the earliest.
Market frets, so do consumers
Wall Street finished the week with a decline yesterday as the financial health of the consumer came into focus following a report that showed personal spending at its weakest growth in 17 months and a profit warning from J.C. Penney Co.
Trading was fairly muted after days of volatility that sent stocks sharply higher early in the week and then plunging near the end. Investors were able to set aside concerns about the effects of the credit crisis on the financial sector, but that gave them more time to think about the economy.
"I'm viewing a day like today as sort of a continuation from where we were a month or two ago," said Les Satlow, portfolio manager at Cabot Money Management in Salem, Mass. "The U.S. recession concerns have resurfaced. They never went away but there was the beginning of the sense that this recession was going to be shallow and maybe a bit benign."
The Dow Jones industrial average fell 86.06, or 0.70 percent, to 12,216.40, suffering its third straight decline.
How to Get a Hot Deal in a Cool Market
Birth, death, marriage, divorce. Throw in new careers and lost jobs, and you've got the reasons most of us fail miserably at timing the real estate market. We sell and buy because life -- not market conditions -- drives the decision. It's how you manage the deal that dictates whether you'll give up too much of your profit in a fire sale or forsake future profit by paying too much -- especially now that the housing market has taken a chilly turn. In the fourth quarter of 2007, the median home price in the U.S. fell 5.8% over the same period 12 months prior, according to the National Association of Realtors. And 13% fewer homes were sold last year than the year before. Below, we have tips for both buyers and sellers to help you strengthen your hand in these rough times, no matter what side of the transaction you're on.
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