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I’m in my early 30s and I’m interested in savings vehicles besides the stock market that would yield good returns. I’m leery of the stock market because I don’t want to see all my hard-earned money potentially go down the drain. What would you advise?


I would advise loosening up and just being into stocks – really. Skepticism is good for investors, cynicism is not. Over the very long term – and if you’re in your early 30s that’s the time horizon you should have in mind – stocks are the best performers among all major asset classes, including real estate, gold, bonds and Treasury bills. Why would you want to cut yourself off from such an opportunity?
The crushing bear market of 2007 to 2009 may account for your reluctance. At the bottom the stock market actually had a slightly negative return for the preceding 10 years, or perhaps slightly positive if you factor in dividends. But then stocks took off, as they always have done after reaching deeply oversold levels.
So it’s sensible to own stocks, but you should own them sensibly, as part of a diversified portfolio also containing bonds, cash and, if you have the means and want to get fancy, real estate and commodities. If you want to keep things simple, a mix of 70 percent stocks (domestic and foreign companies and small and large ones) and 30 percent bonds is considered right for someone your age.

If you don’t have the inclination to pick your own stocks or hire someone to do it on your behalf, then open an account at a discount brokerage and go with some low-cost mutual funds or exchange-traded funds that track the performance of broad indexes like the Standard & Poor’s 500 and MSCI Emerging Market. Finally, invest through a dollar-cost averaging strategy. By putting the same amount of money into stocks or funds periodically – quarterly is all right, monthly is better – rather than buying the same number of shares, you accumulate more shares when prices are lower.

-Conrad de Aenlle