Assessing Your Portfolio’s Risk Ain’t Easy

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MarketWatch

June 3, 2010 Thursday 3:44 PM EST

SECTION: PERSONAL FINANCE; Personal Finance Daily

LENGTH: 765 words

HEADLINE: Assessing your portfolio’s risk ain’t easy
BYLINE: MarketWatch

Don’t miss these top stories:

Investors are heading to the exits in ever-greater numbers, with U.S.-focused mutual funds watching more than $13 billion walk out the door, and international funds almost $4 billion, in the week ending May 26 — the largest outflows for each category in more than a year. Read Sam Mamudi’s FundWatch today for more on what anxious investors are doing with their money (for one, they’re moving it into money-market funds).

How nervous are you right now? As MarketWatch Columnist Robert Powell writes in his Your Portfolio column, with volatility in overdrive, now is the time to take a good hard look at risk.

Just how risky are your investments? The problem with that question, of course, is that it’s getting harder all the time to assess investment risk. Didn’t most people think money-market funds were safe until the longest-running such fund broke the buck in 2008, prompting a veritable run on such funds? And what about bonds? A lot of investors consider those a safe, or safer, haven but experts are increasingly pointing to trouble ahead in that realm.

Since we can’t beat risk, maybe we have to embrace it with open arms. Either that, or find an adviser we can really trust with our money — read Chuck Jaffe’s column today for more on finding someone like that.

— , Personal Finance editor

Focus on risk before worrying about return

No place to run, no place to hide — that’s what it feels like at the moment. Everything appears risky and the burden to investigate all that could be wrong with any investment makes the mattress seem like the best place for your portfolio.

HEALTH CARE

Heartburn drugs come with risks

Popular heartburn medications carry a risk of bone fractures if taken for too long or in too high a dose. In this week’s Health Minute, MarketWatch’s Kristen Gerencher discusses what to do if you take proton pump inhibitors.

THE JOB MARKET

Few lifelines left when you run out of jobless benefits

About 1.2 million people will lose access to their unemployment benefits by the end of June unless Congress acts soon. MarketWatch’s Andrea Coombes goes over the options that exist for folks after their benefits run out.

Private sector adds 55,000 jobs in May, ADP says

U.S. companies hired 55,000 additional workers in May, the fourth straight monthly increase in private-sector jobs, payroll giant ADP said Thursday.

Weekly jobless claims fall

The number of people applying for state unemployment benefits fell by 10,000 to 453,000 in the latest week, the U.S. government reported, but claims are still well above levels that usually reflect strong hiring trends.

 

REAL ESTATE

A fresh look at rent versus buy

Why on Earth would you buy down here when you can rent?” asked a friend of mine in Miami Beach not long ago. “Buying is so over.” He promptly moved to Manhattan for work reasons-and bought a $1 million loft on the Upper West Side.

Mortgage rates hold steady

Mortgage rates were little changed last week, holding steady for the most part at or near recent lows, Freddie Mac said Thursday.

INVESTING

Anxious investors flee stock funds

Individual investors’ comfort with stock investing seems to have been short-lived. After registering steady inflows in March and April for the first time in nearly a year, market turbulence in May led to large outflows for stock mutual funds.

Making sense of the selloff

There are some types of selling that are better than others. The stock market’s volatility during the first half of May was the result of investors scrambling for cover on the back of the European debt crisis, China overheating fears and regulatory and legislative uncertainties. Since then, there seems to be a method developing out of all the selling madness.

Give your investment adviser a checkup

People often invest “with stars in their eyes,” taken in by big names, fancy offices and splashy portfolio returns.

How much should financial markets really fear Spain?

If you’d suggested to traders two years ago that news flow from Spain had the power to make or break a day on Wall Street, you would have been met with stares of disbelief and even perhaps a few smirks.

Preferred shares shine in volatile market

With banks paying next to nothing on money market accounts, this a good time for income-oriented investors to consider preferred stocks.

ECONOMY & POLITICS

Drumbeat for Fed rate hike grows louder

The drumbeat from some Federal Reserve officials for the central bank to hike interest rates grew louder on Thursday.

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