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10 ways to annihilate your portfolio
Get to know the different ways that you can cheat yourself from getting decent returns.
Investment tuneup

10 top investing blunders

Similar advice applies when you research mutual funds. Sometimes the fund name can be misleading, so you can't judge by that.

Researching funds
What to look for
Type of fund (large-cap growth, small-cap value, etc.).
How long the manager has been there.
How much the fund costs (expense ratio).
Minimum investment required.
Portfolio holdings (list of securities).
Performance information -- remember, past performance does not guarantee future return.
Where to look
Morningstar, an independent investment research and ranking site, offers a wealth of free information about mutual funds. Look beyond the star rating, though.
Ask for the prospectus from the fund company or brokerage firm. This information is often available online.
Get a copy of the most recent semiannual report (again, you'll likely find it online). These reports frequently feature a letter from the portfolio manager. His or her discussion of the past six months will give you an indication of how he or she runs the fund. A good manager discusses both victories and mistakes.

8. Putting it off
Retirement is decades away. You don't need to worry about it, right?

In the world of saving, procrastination is your worst enemy. If you're smart, you'll get started early.

According to MarksJarvis, in order to accumulate $1 million at retirement, you'll need to invest just $20 a week in a simple stock market mutual fund when you're 19, about a $100 a week if you wait until you're 35, and roughly $300 a week if you delay until age 45, assuming a retirement age of 65 and an average annual return of 10 percent. (Of course, while 10 percent is in the ballpark of how the market performed historically over many decades, there's no guarantee that it will continue to do so.)

Here's how it plays out.

Getting to a million bucks

"Of course, you can catch up," MarksJarvis says, "but then you have to dig in deeper and it's actually a little more painful than if you were just saving small amounts to begin with."

But don't ever give up. A person who, at age 45, has accumulated $30,000 can still end up with a nest egg of about $460,000, if they put away $5,000 per year for 20 years, points out MarksJarvis. This assumes an annualized return of 9.6 percent.

Many people delay investing because of debt, says Salmen, but there's no excuse not to take the easy pickings.

-- Updated: June 10, 2009
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