by Wendell Whitman
You may be tempted to focus only on the price of your investments, but that could be a mistake.
For example, you may be tempted to “cut losses” by selling an investment whose price has dropped, even though you might be better off keeping it.
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|Conversely, you could chase after “hot” investments even though they may be about to cool off, and they might be unsuitable to your needs.
Instead of concentrating on price, look at value. One measure of value is the price-to-earnings ratio, or P/E, which can help determine if a stock is considered “expensive” or “cheap.”
Another dimension of an investment’s value is its ability to help you diversify your holdings. While diversification by itself can’t guarantee a profit or protect against a loss, it can help you reduce the effects of volatility on your portfolio.
When evaluating investments, consider their price, but don’t overlook their true value.
Sandwich Generation Needs To Avoid Financial Squeeze
If you need to care for aging parents while still supporting your own children, you’re in the Sandwich Generation. And that means you’ll face some financial challenges, so it’s important to make the right moves.
For starters, you’ll need to prioritize your goals. That means you’ll need to determine how to allocate your financial resources between your own retirement accounts, such as your IRA and 401(k), and any college savings vehicles you’ve established for your children, such as Section 529 plans and Coverdell Education Savings Accounts.
At the same time, you’ll need to be familiar with your parents’ investment situation and estate plans so that, if the occasion arises, you can step in and help them make the proper decisions.
It’s not easy being a Sandwich Generation member, but diligence and proper planning can help you provide support to everyone in your family, in one way or another.
Contact Wendell at Edward Jones www.edwardjones.com.
P.O. Box 61901
Boulder City, Nevada 89006
Phone (702) 294-1392 Fax (702) 294-1392
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