Greece, China = Unstable Market – How to Protect your Portfolio

Greece…China…

Greek Flag

China Flag

 

 

 

 

 

Both countries are causing the market turbulence and stomach aches for queasy investors.  As I’m writing this, Greece, still doesn’t have a solution as their PM flip-flops more than pancakes on a griddle.  China’s stock market has been such a mess, that 25% of stocks stopped trading due to deep losses and heavy fluctuation on Tuesday, 7/7/15.  This isn’t an article on further issues with either country.  It’s to get you thinking about what happens what markets can wildly fluctuate and more importantly, how to protect the investments in your portfolio.  

Looking for a Stable Investment in an Unstable Market?

Risk Averse?

First off, isn’t it great to buy a house these days with such low interest rates?  Our parents paid upwards of 14% back in the 80s for a mortgage and we are paying something like 3-4% nowadays.  Because interest rates are so low, it has downstream effects.  It’s great for home buyers to afford a lower monthly payment without paying too much interest on the loan.  The economy has been stimulated over the past 4 years providing a tremendous bull market leaving stocks at record highs.  How do you think this impacts banks and financial institutions?

What’s the Difference between Mutual Funds and ETFs?

What would you like Sir?  More Diversification?  Coming right up!

Mutual Funds & ETFs offer the same thing for investors…Lots of diversification assets within a single purchase.  Each contain a basket of stocks to spread out risk instead of individuals (you and me) buying hundreds if not thousands of stocks to reduce our risk.  There are distinct differences between the two, however, like the long term costs associated with them.  Let me explain each: