7 Investments You Need To Be Properly Diversified In Today’s Market

Posted on June 26, 2008. Filed under: -- Building Wealth, -- For The Investor In YOU, -- Top 10..., -- Uncategorized | Tags: , , , |


By Molly Malone

With a tough market and economy like we’re in currently, the last thing you want to do is complicate your investments; many of you already find your investments too complicated and hard to understand as it is.

Many newbie investors like you, have investments in numerous accounts, hoping that you’re diversified enough to handle market fluctuations like we saw today, with the Dow losing over 350 points. The problem I have, is that you are hoping you’re diversified enough so you don’t lose it all, but you really aren’t certain. Are you?

Dont’ worry, you’re not alone. That’s why I’m writing this post. Unless you’ve called in to Jim Cramer’s Mad Money, you probably have no ideahow to make sure you’re portfolio is properly diversified. I’m sure you’ve been given quick advice like ” You should have 75% stocks and 25% bonds?” Do you ever think “okay, but which stocks, and which bonds?

Take a look at the below. SmartMoney’s June 2008 magazine has an article that tackles the question: Can 7 different asset class investments be enough to have a diversified account? “It can be,”  SmartMoney says, “if it’s the right seven.”

So,  I’ve got the 7 outlined for you here! The good news is that you can even purchase all of them IN JUST ONE FUND if you want to (by owning a target date fund for example).

Here’s what SmartMoney lists as the “7 INVESTMENTS you need”  (In parenthesis is what their FIRST choice pick is..)

1. A Blue-Chip US Stock Fund. ( Fidelity Spartan 500 Index)

2. A Blue-Chip Foreign Stock Fund ( Vanguard Total International Stock Index )

3. A Small-Company Fund ( T. Rowe Price New Horizons )

4. A Value Fund Fund ( Vanguard Value Index )

5. High Quality Bond Fund ( Vanguard Total Bond Market )

6. An Inflation-Protected Bond Fund ( Vanguard Inflation-Protected Securities Bond )

7. A Money Market Fund ( Fidelity Cash Reserves )

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