Q: Hi, I was referred to CIA. I have two 403b’s with different companies. One valued at approx. 80,000 I no longer contribute to. It is a stock portfolio (pretty aggressive mix) and is just sitting there, going up and down with the market. I am 53 and will retire within 10 years. What are my options for making that money work for me?
CIA believes that one way to “make your money work for you” as you alluded is to focus on investments that actually pay you an income stream while you wait for them to rise in value. For example, dividend stocks that pay a 3 or 4% yield and will also rise and fall with the stock market. At least, while the market stays flat like in 2011, you will earn some return because of the dividend that was thrown off throughout the year. You can invest in a wide mix of dividend paying investments from bonds to stocks to real estate, etc.
There are also index funds that you could look to that could provide you wide diversification across a number of dividend stocks. Vanguard’s dividend appreciation index is one example. Visit www.vanguard.com for details and inquiries.
Also, you could look to a professional to help you manage these investments on your behalf. We believe that firms such as ours which are fee-only are the way to get investment advice. For a list of advisors in your area, you can visit www.napfa.org. We would be happy to sit down with you as well if you wanted an opinion from one of our team members.
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