What the experts say
Health care poised to recover
Health-care stocks have languished, but their prognosis may soon improve, said David Landis in Kiplinger’s Personal Finance. True, “health-care companies have no shortage of concerns hanging over their heads”—product recalls, expiring patents, and health-care reform among them. But investors may have overreacted. “Operating earnings for Standard & Poor’s health-care sector have grown close to 12 percent annually over the past three years, yet the stocks on average have climbed only 10 percent a year.” If you’re considering adding any drug makers to your portfolio, look for companies with “diversified sources of revenue so a setback in a single drug won’t bring down the house.” Abbott Laboratories and Wyeth both have a healthy mix of products. By the same token, “tread carefully” when considering biotechnology stocks, whose fortunes are often tied to finding a single silver-bullet treatment.
This winter, invest in cold air
If your house lacks central air conditioning, or your system’s on its last legs, plan to add it this winter, said Josh Garskof in Money. “Not only will it automatically raise the value of your property, but you’ll snag an iceberg-size seasonal discount.” If the contractor can use your existing ducts, you can expect to pay anywhere from $6,000 to $10,000 for your system—but some contractors will shave 10 percent to 20 percent off their winter bids. Plan to spend another $2,500 to $4,500 if you have to install new ducts. When shopping for a system, make sure you buy one that’s right for the size of your house. Keep in mind, too, that after 2010, manufacturers will stop selling systems with the “ozone-depleting refrigerant R22.” Buy an eco-friendly system now to avoid paying more for repairs and service down the road.
Mutual funds in their stocking
Several mutual fund companies have “gift of shares” programs for those who want to buy investments for loved ones, said Chuck Jaffe in Marketwatch.com. Most firms don’t advertise these programs, so ask yours whether it offers one. Just “don’t get your hopes too high.” Most will simply provide a card you can give, showing your promise to make an investment in the recipient’s name. “Unless you are acting as custodian for a minor child—or have that responsible person in cahoots with you on the gift—you can’t actually ‘buy’ the fund shares.” You’ll give them the money, and they’ll invest it. Don’t bother picking an investment company for it’s well-packaged gift program. Look for what really matters in a mutual fund—proven management and reasonable expenses. You can always handle the paperwork yourself.