Investing in the frontier
If emerging market funds are too tame for you, says Money’s Penelope Wang in CNNMoney.com, then how about “emerging emerging market funds”? As emerging markets lose their “gunslinging appeal,” and growth potential, Wall Street is coming out with “frontier funds.” And why not? “Côte d’Ivoire’s market spiked 122 percent in 2007,” after all. Well, here are a few considerations. Frontier markets, with no subprime exposure, say, provide diversification—but with $191 billion in market value, any sizable investment is a “bullish wager.” Also, if you’re invested in commodities, you’re already invested in the frontier. Finally, these are as risky as investments get—do you really “have the stomach” for steep losses?
Grading your 401(k)
The Labor Department is working on some good news for your 401(k) plan, says Robert Powell in MarketWatch, including proposals to make fiduciaries list fees, expenses, and other costs in dollar terms. In the meantime, how can you tell if your 401(k) plan “is living up to the best standards”? The best plans, benefit specialists say, give employees a “total view of their retirement savings,” including profit sharing and other benefits; provide a “gap analysis” to show workers where they are in reaching retirement goals; match contributions; have low institutional fees; and automatically enroll employees and up their contributions over time. Good plans don’t offer a 401(k) credit card.