What the experts say

Emerging markets, big returns

Emerging markets have seen some of the biggest stock market gains this year, said Shefali Anand in The Wall Street Journal, but many of these investments are fraught with risk. The MSCI Emerging Markets index has gained about 57 percent since March 9­, more than twice as much as the Dow Jones industrial average. “One reason for the jump in emerging markets is the return of investors who are looking to take higher risk,” in the hope of making up some of last year’s losses. Just remember that instant gains usually go hand in hand with “gut-wrenching volatility.” It makes sense to hold as much as 5 percent of your portfolio in emerging markets, says Judith Shine, a financial advisor in Lone Tree, Colo. But add to this position slowly, she cautions. Don’t chase returns.

Tax-return redo

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If you realized you made a mistake on your tax return, it’s fairly easy to correct, said Bill Bischoff in SmartMoney. In fact, you have three years to file an amended return, though you’ll probably want to send it in as soon as possible. “The sooner you file the amended return, the sooner you’ll get your refund,” assuming you indeed have one coming. If you owe taxes, coming clean quickly will save you from accruing more interest—and possibly penalties—on the unpaid balance. You can rectify minor errors using Form 1040X, which is only two pages long

and available on the IRS website. If you’ve realized you made a significant mistake, don’t open the “can worms” by yourself: Enlist the help of a tax pro before you fess up.

Budgeting with ‘buckets’

You don’t need to use Quicken or another financial software product to get budgeting under control, said Ismat Sarah Mangla in Money. Consider, for instance, the “bucket budget” method, which uses three accounts—two checking, one savings—to divvy up your money for you. Start by automatically depositing a portion of your paycheck into a high-yield savings account and putting the rest in a checking account designated for set costs, such as mortgage payments and utilities. Calculate your monthly surplus after you pay fixed expenses, divide that amount by four, and set up a weekly transfer to the second checking account, which you’ll tap for “variable” expenses, such as groceries or eating out. “The system creates ‘artificial scarcity,’ forcing you to live on less and within hard boundaries.” That’s assuming, of course, that you don’t supplement your spending with credit cards.