Make Your Money Grow
Whether you have $1,000, $10,000 or even $100,000 to invest in 2017, the editors at Kiplinger’s Personal Finance, have ideas that should pay off handsomely.
Get instant diversification. For $1,000, you can own a little bit of everything with Vanguard Star Fund (VGSTX), a collection of 11 actively managed, low-expense Vanguard funds. Star has roughly 60 percent of its assets in stocks and the rest in bonds. Within the eight stock funds, you'll find large- and small-company U.S. stocks; fast-growing companies and slower growers that trade at bargain prices; and nearly 20 percent in foreign stocks. Star also holds funds that invest in short-term, medium-term and long-term bonds. Star beat similar funds in nine of the past 10 calendar years.
Buy the Dogs of the Dow. The success of the Dogs of the Dow strategy – buying equal dollar amounts of the 10 highest-yielding stocks in the Dow Jones industrial average – waxes and wanes with broad stock market trends. Lately, it has paid to chow down with the canines. The Dogs that made the list at the start of 2016 gained 15 percent on average in the subsequent 11 months, and that doesn't include an average dividend yield of nearly 4 percent.
Here's how you could have assembled a $10,000 portfolio of the current Dogs in early December: Verizon Communications (VZ, $50, yield 4.6%, 20 shares); Chevron (CVX, $112, 3.9%, nine shares); Pfizer (PFE, $32, 3.7%, 31 shares); Cisco Systems (CSCO, $30, 3.5%, 33 shares); Coca-Cola (KO, $40, 3.5%, 25 shares); IBM (IBM, $162, 3.5%, six shares); ExxonMobil (XOM, $87, 3.4%, 12 shares); Procter & Gamble (PG, $82, 3.3%, 12 shares); Caterpillar (CAT, $96, 3.2%, 10 shares); and McDonald's (MCD, $119, 3.2%, eight shares). The portfolio's average yield: 3.6%. Of course, you'll have to pay brokerage commissions, too.
Open a high-yield savings account. With $100,000, you'll qualify for accounts with top yields and no fees, yet stay under the $250,000 individual limit per bank for Federal Deposit Insurance Corp. coverage. At a 1.15 percent yield for a $100,000 deposit, the online Popular Direct Savings account pays the most of any nationally available savings account.
Editor’s Note: For more on this and similar money topics, visit www.Kiplinger.com.
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