Spare Change
Money Tip
The average money-market fund yield recently popped above 4 percent and savers might see 5 percent yields within a year or two — a huge boon to long-suffering savers. A $100,000 money fund investment, for example, now produces $4,010 a year in income, vs. just $500 in August 2003.
Fund Fact
Here’s a fresh idea: a traditional, no-load mutual fund run by hedge-fund managers. Called Alpha Hedged Strategies Fund, it’s subject to the protection of Securities and Exchange Commission rules and is run by a variety of hedge fund managers. It’s not cheap, though; its operating expense is 3.99 percent.
Market Tip
Where would you bet today if you were looking for substantial returns by 2010? One possibility: the Internet sector. Unlike the Internet bubble that burst in 2000, today’s large Net companies are profitable, dominant franchises, one fund manager says.
Survey Says
About 68 percent of American workers said they’re confident they have adequate funds for a comfortable retirement, according to a study by the Employee Benefit Research Institute. But more than half of all workers said they’ve saved less than $25,000 toward retirement. Even among workers 55 and older, more than four in 10 have retirement savings under $25,000, leading the co-author of the study to remark, “Overconfidence is the word that comes to mind.”
Net Nugget
Federal tax rates for capital gains have dropped significantly in recent years, allowing people to save more from the sales of stocks and real estate. If you’d like to find out where capital gains taxes stand or learn more about the rules involved, try one of these Web sites:
www.irs.gov/ taxtopics /tc409.html
www.turbo tax.com/ articles/FAQon CapitalGains.html
www.smartmoney .com/tax/capital/