What the experts say

Game plan for emerging markets

Smart investors know that emerging markets “offer growth found nowhere else,” said Scott Cendrowski in Fortune. But most people are playing these fast-growing markets all wrong. The most common strategy is to buy big multinationals, because their broad bases of operations offer stability. But experts say that approach now has a big downside: “When you buy multinationals for emerging markets, you also buy their sagging developed markets businesses.” For example, Yum Brands, which owns KFC and Taco Bell, has grown 20 percent a year in China over the past five years, but it’s also fallen 6 percent annually in the U.S. That leaves growth “too watered down,” says investment adviser Robert Holderith. A smarter bet is to buy funds based directly on emerging markets; their volatility has declined over the past decade while dividends remain high.

Avoid your employer’s stock

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Don’t let the volatile market tempt you into putting more money into your own company’s stock, said Jason Zweig in The Wall Street Journal. In September, jittery retirement investors put 35 percent of the money they pulled out of stock funds into shares of the companies they work for. The move is often a product of confusion, says Pamela Hess of benefits adviser Aon Hewitt. People “feel connected to their own company’s stock, so it feels safe and secure to them,” but that security is usually an illusion. After all, why would you want “your salary and your retirement fund riding on the same risk?” If your company matches your 401(k) contribution in company shares, make sure to regularly move them to more diversified funds. That way you won’t “get locked up too close to home.”

More bucks for your used car

Now is the time to trade in your car for a new model, said Donna Rosato in Money. Used cars are in short supply because cash-conscious drivers are keeping cars longer. As a result, the value of 2- to 5-year-old vehicles has climbed 10 percent over the past year, as opposed to an increase of just 2 percent for new models. The smaller price gap is especially beneficial if you have a fuel-efficient Japanese car to sell. A new Toyota Prius, for example, costs just 24 percent more than a 2-year-old version, down from 48 percent last year. For the best trade-ins, hit up independent used-car dealers, who are “itching for inventory.”