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What the experts say

Storm-proofing your portfolio; When to insure your vacation; Limiting 401(k) loans

Storm-proofing your portfolioA “3-D hurricane” is coming, said Steven Goldberg in Kiplinger’s Personal Finance. Are you and your portfolio prepared? Debt, deficits, and the demographics of an aging population could combine, Pimco fund manager Rob Arnott contends, to account for “wretched” returns in coming years. He believes Pimco’s All Asset D mutual fund will shield investors from the worst of the storm. Arnott’s defensive posture includes emerging-market assets, real estate securities, commodities, and mutual funds that both buy and short securities. The fund, which carries annual fees of 1.27 percent, is about a third less volatile than the Standard & Poor’s 500-stock index, and has returned 7.6 percent from 2003 through mid-May, 0.7 percent a year better than the S&P.

When to insure your vacationHeadlines dominated by wars, civil unrest, and natural and man-made disasters are leading many travelers to consider vacation insurance, said Scott McCartney in The Wall Street Journal. But “you better look very closely” before you buy. Most travel-insurance policies come loaded with exclusions for pregnancy and pre-existing conditions. Terrorism protections often don’t kick in unless an attack happens in your destination city less than 30 days before your scheduled trip. And if a hurricane hits your hotel, your insurance might not reimburse you unless the hotel has been rendered uninhabitable. Read the fine print even on “cancel for any reason” policies, which cover most contingencies for a higher premium. They often require travelers, for instance, to cancel at least 48 hours before their scheduled departures.

Limiting 401(k) loansOutgoing Wisconsin Democratic Sen. Herb Kohl and his GOP colleague, Wyoming’s Mike Enzi, want to protect retirement savers from themselves, said Margaret Collins in Bloomberg.com. Concerned that a record-high 28 percent of 401(k) holders had outstanding loans from their 401(k) plans at the end of 2010, the senators have introduced legislation that would limit the number of loans that savers can take out, but also “give participants more time to repay after losing a job.” Currently most 401(k) plans require loans to be fully paid off within 60 days after a participant leaves a job, and 70 percent of such cases end in default. The bill would also bar the use of debit cards linked to the accounts and permit plan participants to continue to contribute to their accounts after taking out a loan.

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