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H Never too early to think year-end

- Alan Lavine and Gail Liberman



Here are some year-end mutual fund investment tips to help you ring in a good 2007.

  • Invest regularly in a well-managed stock fund or index fund for at least 10 years. You need that much time to accumulate shares at a lower cost and profit during rising period of the stock market. Historically, there is one bad year for every three good ones, according to Ibbotson Associates, Chicago.

  • Keep investment expenses low. Stick with no-load mutual funds with low expense ratios. The average stock fund has an expense ratio of 1.4 percent. But funds, like the Vanguard Index 500 Fund, sport even lower expenses of .2 percent.

  • Take advantage of break points if you invest in load funds. Invest $50,000 or more, and your front-end commission drops substantially. Or, you can hire a wrap account money manager. The manager pools investors' money together so you can invest commission-free. But you will pay the manager at least 1 percent annually.

  • Invest to beat the taxman. High tax bracket investors should stick with tax-free money funds and bond funds.

  • Keep informed about the economy. Read the daily business news online or in your newspaper. Educate yourself about how investments work. Subscribe to an investment newsletter. Tip: You can write off the cost of the subscription on your income taxes.

  • Avoid chasing after high yields and hot growth stock funds. You can win a lot, but you can also lose your shirt.

  • Keep inflation in mind when you invest. Income from bank CDs and bonds is eroded by inflation. So it's best to invest some of your money in inflation-indexed bond funds, as well as real estate and precious metals mutual funds.

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    Spouses Gail Liberman and Alan Lavine are syndicated columnists. Their latest book is "Rags to Retirement (Alpha Books)." You can e-mail them at MWliblav@aol.com.


    To read more columns, please visit the column archive.




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