Where to Plow your hard Earned Dollars for 2007

Well I am back and ready for the New Year. When we left off last we were discussing where to out your money for 2007. Let's recap before we start to invest. By the way you can email me with any questions!

First, no debt before you invest! Only the house mortgage is acceptable debt and let's hope that mortgage is not and exotic loan... Next, do your homework. Find out what parts of the market interest you. Do your research. Be like Warren Buffet and never invest in anything that you do not understand. Last, make sure you have 3 full months of living expenses in your money market or savings account before you invest one red penny.

OK now that you have met all these requirements let's invest. Remember do it yourself and you will save thousands of dollars in worthless fees to so called money managers. What you want to do first is invest in your 401k (if you have this option). If you have a 401k offered by your company take full advantage of the program. Invest the maximum amount you can! Remember this is your only chance to prepare for your future so take full advantage.

If you have a 401k program you will want to make 2 investments into the plan. Make sure you always invest in two funds to mitigate your risk in the event the market goes up or down. Trust me, it will do both. The 2 areas I suggest that you invest in will be the International Market and Dividend Index or Mutual Funds. If you are able to invest in the International Market stick with a Total Index Fund or International Value Mutual Fund. Stay away from International Growth Funds or International Small Cap Funds. These are just to risky to invest in. Put 50% of your available money in the International sector.

Next place 50% of your funds in Dividend Index or Dividend Mutual Funds. There are lots of names for these funds. Just make sure you read the fund definition and make sure the fund or index you are investing in states Dividend Fund. The reason you want to be in Dividend funds or index's is because you will continue to get dividends paid to you for the basket of companies you own with the fund. Plus and this is a big one, in the event inflation continues to grow your investments will grow to and hopefully beat inflation. So you ask what is inflation? Follow this link to a great website on inflation www.inflation.com

If you do not have a 401k plan available you will want to go to Vanguard or Fidelity to set up a personal account or IRA plan with them. I only suggest Vanguard , www.Vanguard.com, or Fidelity, www.Fidelity.com, because they have the lowest fees and best investment options available. Don't be scared to set up your own account! It is very simple and only take a few minutes to do.

Here are my personal investment selections for 2007 from both my Vanguard and Fidelity accounts. Please note that I have selected 2 REIT funds. I am a firm believer that REIT funds will continue move up in value.

Fidelity:

1. Fidelity Dividend Growth (FDGFX) - 25%
   
2. Fidelity International Discovery (FIGRX) -40%
   
3. Fidelity Real Estate Investment (FRESX) - 15%
   
4. Fidelity Select Defense & Aerospace (FSDAX) - 10%
   
5. Fidelity Select Brokerage & Investment Management (FSLBX) - 10%
   

Vanguard:

1. Vanguard Dividend Growth (VDIGX) - 30%
   
2. Vanguard REIT Index Fund Investor Shares (VGSIX) - 40%
   
3. Vanguard High Dividend Yield Index Fund Investor Shares (VHDYX) -30%
   

These will be my core investment for 2007. Feel free to email me with any questions. I will be back next week with other ideas for you! Happy New Year!!