How to invest at every stage

  @FortuneMagazine June 13, 2013: 7:17 AM ET
STG01 investing at every stage
(Fortune)

Plotting your path to investing success might seem like a relatively stress-free exercise when you've got a raging bull market at your back. But not these days. There's a growing fear that the sharp rally in stocks -- the S&P 500 index has nearly doubled over the past four years and gained 15% during the first five months of 2013 alone -- is unsustainable. Asset prices across the board, say skeptics, have been propped up by the easy-money policies of the Federal Reserve and other central banks around the world, and when those unprecedented stimulus efforts come to an end, it won't be pretty. Indeed, those fears prompted long-term Treasury bond prices to drop by more than 7% in May, rattling investors.

Still, there's reason for tempered optimism. The economy continues to show signs of solid improvement: Job growth is picking up, housing has rebounded, consumer confidence is higher, and corporate earnings are growing. And despite the run-up in prices, the S&P 500 is now trading at about 14.4 times next year's estimated earnings, nowhere remotely close to the P/E ratio of 25 recorded back in 2000, when the dotcom bubble burst.

Of course, short-term market predictions are usually a crapshoot. What you can certainly foresee, though, is where you are on your own investing continuum. With that knowledge you can make better decisions about when it makes sense to take risk, when it makes sense not to -- or whether your portfolio is in need of a significant overhaul. Naturally, it always pays to adhere to the basics: Save diligently, keep your fees low, rebalance regularly. But keeping your mind open to some nontraditional thinking can help too.

With that in mind, here are some customized strategies aimed at helping you navigate the path to investing success -- whether you're in the early, middle, or late stage of your career. We also asked five investors with outstanding track records to give us their top stock picks for investors of any age. And we also lay out for you the pluses and minuses of moving your residency to shelter income from taxes.

Join the Conversation
Markets
Sponsored by
Index Last Change % Change
Dow 16,262.56 89.32 0.55%
Nasdaq 4,034.16 11.47 0.29%
S&P 500 1,842.98 12.37 0.68%
Treasuries 2.63 -0.01 -0.42%
Data as of 5:28am ET
Company Price Change % Change
Bank of America Corp... 16.39 0.00 0.00%
Facebook Inc 59.09 0.20 0.34%
Yahoo! Inc 34.21 0.76 2.29%
The Coca-Cola Co 40.18 1.45 3.74%
Intel Corp 26.77 0.21 0.79%
Data as of Apr 15
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.26%4.48%
15 yr fixed3.30%3.31%
5/1 ARM3.30%3.35%
30 yr refi4.25%4.45%
15 yr refi3.29%3.34%
View rates in your area
 
Find personalized rates:
Rate data provided
by Bankrate.com
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.