What the experts say

Don’t go with the flow

Just because most mutual fund investors have been loading up on emerging markets and eschewing large-company buys doesn’t mean you should too, said Stan Luxenberg in TheStreet.com. A Morningstar study shows that “it pays to buy the least-popular equity fund categories and shun the sectors attracting crowds.” One strategy: Focus on funds in the three equity categories that have seen the biggest fund outflows over the past year and hold those funds for three years. From 1994 to 2009, investors who followed that prescription would have earned 8.1 percent annually, versus 4.8 percent for investors who picked the most popular funds. “Even if you don’t buy all the least-popular categories, it is still worth monitoring flows.”

When to ‘cash in’

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During the housing market’s heyday, “cash-out” refinancing was all the rage, said Ismat Sarah Mangla in Money. But homeowners have largely stopped using their houses as ATMs and many are now putting extra cash into their homes’ equity in order to snag better mortgage deals. The tactic could work for you, provided you plan to keep your home at least five years. Most homeowners who choose “cash-in” refinancing do so because the best rates are available only to owners holding at least 20 percent equity. It’s also worth exploring if you’re carrying a jumbo loan that only barely exceeds the limit for a cheaper conventional home loan.

Piggybacking off the rich

Instead of getting angry about tax breaks for the rich, consider investing in the companies that profit from them, said James Stewart in SmartMoney.com. Should the Bush tax cuts be extended for a few years, as I expect, the well-off are sure to drop more “discretionary” money on items like Louis Vuitton handbags. But excessive displays of wealth are likely to remain unfashionable, so “choose quality over bling.” LVMH Moët Hennessy Louis Vuitton, which owns everything from luxury luggage to fine wine, should benefit from a surge in “relatively inconspicuous” spending. The same is true of Richemont, which owns Cartier, and Swatch Group, which owns Breguet and Blancpain. And while only a privileged few can afford to spend millions on artwork, any of us can “get a slice of the action” via Sotheby’s stock.