What the experts say

A 50-50 strategy isn’t for everyone

Even in today’s risky market, retirement investors should be careful not to play it too safe, said Dan Kadlec in Time.com. A Vanguard study recently showed that since 1926, investors with a 50-50 portfolio—half stocks, half bonds—do about the same during both expansions and recessions, with around 5 percent growth. That’s all well and good today if you are close to retirement and have a big nest egg saved. But if you aren’t yet 50 years old, “a 50-50 mix is so conservative that you risk falling short of your long-term goals.” A 40-year-old with $50,000 in savings who socked away $5,000 a year would have $1.4 million by age 70 with 5 percent growth. But he’d have $2.1 million with a 7 percent return after inflation, which is “reasonable for a stock-heavy portfolio.” A 50-50 strategy may offer peace of mind, but if you aren’t near your golden years, “volatility is an unfortunate but necessary evil.”

Dump your portfolio losers now

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Don’t wait until the end of the year to sell your losing stocks, said Jack Hough in SmartMoney. As Jan. 1 draws near, hordes of other investors will also dump their losers for tax purposes, so you’ll likely get a lower price by “selling with the herd.” And by selling sooner, you’ll break the habit of what’s called loss aversion, in which investors hold on to losers too long “in hopes the stock will turn around.” It’s rarely a winning strategy. The losses you generate have generous tax benefits: They “can be used to offset gains,” and those not used this year can be carried forward. Besides, harvesting your losers offers a great opportunity to “upgrade to better-performing holdings.” Make it a New Year’s resolution to hunt for them.

Crowdfunding your start-up

“Need start-up capital—and fast?” asked Sarah E. Needleman in The Wall Street Journal. An increasing number of start-up entrepreneurs are turning to crowdfunding sites like Kickstarter.com and IndieGoGo.com, which allow contributors to pledge money to developing businesses. The funds are gifts, not loans, and the campaigns must be completed in a set time frame and reach preset goals; otherwise funds won’t be released or the sites will take a bigger commission. But many campaigns bear fruit, says Slava Rubin of IndieGoGo.com. For the best results, he says, “have a good pitch, be proactive, and find an audience that cares.”