What the experts say

Investing on autopilot

If there’s one “sure way” to steer clear of volatile market bubbles, it’s to shun what others are buying and to buy what others are shunning, said Knight Kiplinger in Kiplinger’s Personal Finance. Following such a strategy doesn’t require inside information or “market-timing clairvoyance.” In fact, you can do so simply by putting your portfolio on “autopilot”: Find the appropriate asset allocation for your age, wealth, and risk tolerance, then periodically rebalance your portfolio to ensure that your “predetermined percentages” don’t get out of whack. “The beauty of it is: You are forced to do what most investors find very difficult—taking their gains and buying out-of-favor assets.” Such discipline will pay dividends when the current crop of oversubscribed assets—“in my opinion, U.S. Treasury bonds and gold”—inevitably lose their luster.

Fast-tracking your mortgage

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Retiring your mortgage early by making more than the required monthly payment isn’t a new idea, said Bill Bischoff in SmartMoney. But these days it can be a particularly good one, as it’s among the rare investment strategies that offer “guaranteed, risk-free returns”: Once your mortgage is paid off, you can live in your home free of charge and invest your earnings elsewhere. Still, this strategy isn’t for everyone. If you have bigger financial fish to fry, such as paying back high-interest debt, stick with the minimum payment. Likewise, “if you think you can earn 8 percent to 10 percent on your cash elsewhere,” by all means do so—but there aren’t many high-return investments like that to be found.

Betting on Bordeaux

In retrospect, investors who bought stock over the past decade should have loaded up on wine instead, said William Lyons in The Wall Street Journal. Since 2001, the Fine Wine 100 Index has increased more than 200 percent. What’s behind this “remarkably resilient performance during a period of such economic uncertainty?” Most fine-wine investing still concentrates on the top estates in France’s Bordeaux region, so supply is extremely limited. What’s more, the 2009 Bordeaux vintage is shaping up to be the “most hyped” on record, even though the wine is still maturing. The 2010 grapes, just being harvested, aren’t quite as promising, due to less-than-ideal weather.