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Question:


What do I do with my Franklin Templeton mutual funds? I'm ready to monitor the market, so what do I need to look for and avoid as I trade and sell?
-NewToInvesting


Answer:


Some blanks need to be filled in before a proper answer can be given, but let’s take a shot. You say you’re new to investing, yet you have these shares in Franklin Templeton funds. If you received them as a gift, then you could be liable for tax on capital gains that have accrued not just since the date of the gift but since the giver first acquired the shares. Due to a quirk in the tax code, the same applies if you inherited the shares in 2010 but not before.
 
If you’re a novice investor, monitoring stock and bond markets may get you into more trouble than remaining blissfully ignorant. Investors, and not just neophytes, are renowned for making decisions at the worst times, selling in a panic at market bottoms and getting greedy and buying just as the rollercoaster is starting its long, frightening descent.
 
You might be better off ignoring the markets and focusing on portfolio diversification. A typical balanced portfolio includes 60 percent in stocks and 40 percent in bonds. That’s a very rough guideline, though, and the right allocations depend on your personal financial circumstances, tolerance for risk and other factors. If you’d like to be a do-it-yourself investor, you could go to the Franklin Templeton website, franklintempleton.com, see what each of your funds focuses on, figure out how your holdings conform to the 60/40 split and then make decisions on what to keep and what to cut loose.
 
A simpler and possibly safer option is to consult a fee-based financial advisor who can get to know you and your financial wants and needs and then look over the funds you have and make recommendations. There’s probably no need to rush into anything, though. Franklin Templeton is an excellent fund provider, and you could do a lot worse than to entrust your money to their managers.
-Conrad de Aenlle



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