Blogs

We covered a lot of ground in our three-part Tonka Beans series on target-date funds. If you read that, you should feel more informed about what they are and why they matter to you, but you might be wondering what to do next so here’s a simple set of steps you can take:

When will you post more videos? They were very interesting & fun to watch.

In the first part of this three-part series we reviewed the fundamentals of target-date funds. Then we talked about why target-date funds are going to be hard to avoid in Part 2 . Here we’ll finally step through some of things you can do to be smart about target-date funds.

In the first part of this three-part series we reviewed the fundamentals of target-date funds. What are they? Why do they exist? How are they different from other mutual funds?

Now we’re going to learn a bit about why it’s becoming almost impossible to avoid target-date funds.

The end-of-the-world blockbuster movie 2012 opened in record-setting style, earning more than $225 million globally in its first weekend in theaters. But despite thousands of web sites that all seem to agree that December 2012 really will be the end of the world, here at Tonka Beans we’re pretty sure it won’t be. Assuming we’re right, then you’ll need to make sure your target-date fund outlasts 2012 and manages to do for you what the movie seemed to do for Sony Pictures: pay a return on investment.

1. Review your portfolio and rebalance, if necessary
Major market swings like the ones we’ve seen in the market recently can cause your investment allocations to shift. By rebalancing, you can restore your target allocation, manage investment risk, and keep your portfolio in good health. For example, say the asset allocation mix for a 30 year-old is 70% stock and 30% bond. But given the great run in stocks this year, that mix has moved to 80%/20%. Well, she should sell 10% of her stocks and use the proceeds to buy bonds. In a way, you’re always selling high and buying low.

The human brain is amazingly complex, flexible and able to process a vast amount of information. Even today’s supercomputers are not up to the task as far as raw processing power. The human brain has them beat…at least for the moment. But past these amazing stats and processing power, the human brain is also subject to some very real, emotional, limitations. We haven’t yet evolved that much past cavemen despite our technological advancement.

If you’ve been following Berit in our videos and blogs, you know that she is making some real strides in bringing her debt under control. I’m happy to report that the few simple, but not-so-obvious steps that Berit took to manage her debt seem to be working. Her most recent credit score increased by 90 points!

In recent years we’ve seen a lot of turmoil on Wall Street and the investing world. Between Bernie Madoff and the financial crisis of ’08 and ’09, many of today’s financial issues are the results of a multitude of conflicts of interest on Wall Street. And a lot of investors are left wondering who can I trust to help me manage my money and hopefully grow my wealth.

I’ve gotten a lot of questions on what’s going on with Berit, the young women I documented in my Someone Like You video series, and how she’s managing the close to $100,000 in debt she accrued while at undergrad and graduate school. So I thought I’d blog about the whole story and the continuing progress she is making in an effort to inspire other women who may be in a similar boat.